Ecommerce Opportunities Set To Grow For SMEs: Report

Both SMEs and consumers in AMEA are maturing in their use of e-commerce and both groups agree that the pandemic-driven utilization of e-commerce is here to stay. Eight in ten SMEs believe e-commerce will become more important in their business in the next three years

The latest e-commerce trends from a research commissioned by FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX), and one of the world's largest express transportation companies, shows that both Small and Medium sized Enterprises (SMEs) and consumers agree that there’s room for further growth in the already booming e-commerce sector. 83% of Indian consumers have purchased more from e-commerce platforms in the last three years and this momentum is likely to continue.

The What’s Next in E-Commerce survey polled Small and Medium sized Enterprises (SMEs) and consumers in India, and 10 other markets in the Asia Pacific, Middle East and Africa region (AMEA) in July 2022 to explore the continuing evolution of e-commerce in the region and identify the trends that could fuel their future growth.

The survey reveals that consumers are looking for innovations in personalization, shoppertainment and payment options that enhance their experience and at the same time, make it easier to discover new brands and make purchasing convenient. And with plenty of shopping festivals already in the calendar, consumers are looking for even more seasonal offers. Taken together, the research shows there is plenty of fertile ground for e-tailers to experiment with new approaches that can help build their customer base.

“COVID has accelerated our lifestyles to a pivot point where shopping online has been normalized across all demographics, and there’s no going back. With that, e-commerce is set to take a growing proportion of total consumer spend1.” said Kawal Preet, president of the Asia Pacific, Middle East and Africa (AMEA) at FedEx Express. “With more people shopping online consumer preferences are becoming increasingly sophisticated. As SMEs and e-merchants evolve their online sales platforms, our research uncovers opportunities for businesses to capitalize on what consumers want. Customer experience is the driving force behind how e-tailers engage with their customers and how we are innovating our shipping solutions. With an expanded portfolio specially developed for e-commerce businesses, FedEx is well positioned to support the changing expectations of consumers and continuation of e-commerce growth.”

The pandemic has hot-housed e-commerce growth across the AMEA region, and India is no exception. Consumers in India are much more likely than those in other

AMEA markets to forecast future growth in e-commerce, with Marketplaces becoming increasingly influential. Majority of Indian SMEs believe that they are well positioned to reap benefits.

“SMEs are the growth engines of the Indian economy. During the pandemic the e-commerce sector provided many SMEs with an opportunity to recover and expand their business. Today, cross border trade has emerged as a key business priority for SMEs in India and a major opportunity to bolster growth. FedEx enables SMEs to reach their full potential by connecting them to a world of possibilities through the strength of our global network, tailored solutions, and valued-added services,” said Kami Viswanathan, senior vice president of FedEx Express Middle East, Indian Subcontinent and Africa Operations.

E-commerce sector matures but further growth ahead

Asia Pacific which includes the world’s biggest e-commerce markets like India, Mainland China, Japan, and Korea2, will see revenue from e-commerce sales reach US$2.09 trillion this year as 57% of the region’s population shops online.3

Both SMEs and consumers in AMEA are maturing in their use of e-commerce and both groups agree that the pandemic-driven utilization of e-commerce is here to stay. Eight in ten SMEs believe e-commerce will become more important in their business in the next three years and nine in ten believe they are well prepared for the challenge. 80% of consumers reported that e-commerce had taken a greater share of their total purchases over the past three years while 71% see further increases ahead.

SMEs in India, Malaysia, Philippines, and Vietnam were among the most optimistic about their future e-commerce growth in the next three years, a sentiment shared by consumers in these same markets. E-commerce currently represents less than 6% of total retail sales in each of these markets.4

In India, 80% of SMEs agree that consumer buying behavior has fundamentally changed due to COVID and most of them predict e-commerce will continue to boom, and be integral to their business growth over the next three years. 93% of SMEs are excited by this, and believe they are well positioned to capitalize on this growth.

Indian SMEs and consumers both agree on the importance of Marketplaces in the overall context of e-commerce right now, and in future. In fact, two-thirds of Indian consumers purchase items exclusively through Marketplaces. However, interestingly, whilst the importance of Marketplaces is clear, it’s worth noting that 58% of SMEs currently sell directly to customers through their own e-commerce platforms.

Expectation mismatch on service experience touchpoints

As more consumers participate in the on-demand economy and increasing shipment volumes puts pressure on e-tailers, maintaining customer service quality is critical. The survey data reveals a significant 10% gap between how SMEs rate their

own e-commerce customer experience and how consumers view it. The biggest gaps appeared in having an efficient returns service (13%) and access to customer support (11%) in the AMEA region.

Deliveries taking too long is the number one pain consumer point (53%) followed by handling returns (42%). Consumers typically expect delivery within three days to one week, but clearly there is a desire for delivery to be at least more reliable if not faster.

Too few experienced people for too many jobs

While the future looks bright, 65% of e-tailers in AMEA reported they were struggling to handle the growing number of orders they were receiving. Amid surging demand talent and recruitment has proven challenging for SMEs.

In India, 80% of SMEs had experienced extremely high levels of resignations over the past 12 months as the global Great Resignation phenomenon has impacted the region. 71% believed there were too few people for too many jobs with e-commerce marketing and sales experience being most in demand, followed by logistics roles.

Apart from India, SMEs in Thailand, Vietnam have been most affected by the talent challenge and therefore SMEs in these three markets are most likely to be receptive to support from logistics providers, to make day-to-day, repetitive shipping tasks simpler with easy-to-use tool

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