FedEx Research: e-commerce For SMEs To Grow Under ‘New Normal’

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.

FedEx Research: e-commerce For SMEs To Grow Under ‘New Normal’
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Kuala Lumpur, September 30, 2022 – The latest e-commerce trends from 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 SMEs and consumers in the Asia Pacific, Middle East and Africa region (AMEA) agree that there’s room for further growth in the already booming e-commerce sector.

In Malaysia, nearly 90% of SMEs acknowledge the increased importance of e-commerce to their business over the past 3 years while 89% of SMEs believe it will continue to become even more important in future.

The What’s Next in E-Commerce: 6 Trends Shaping the Future survey polled SMEs and consumers in 11 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.

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The survey reveals that consumers in AMEA 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.

SMEs and e-merchants

“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 spend.” says 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 the continuation of e-commerce growth.”

e-commerce Sector Matures

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

Both SMEs and consumers 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 in AMEA 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.

Of the 11 markets in the Asia Pacific, 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. Looking ahead, for Malaysian SMEs, China is seen as the key market, within AMEA, that Malaysian SMEs will target for export growth, followed by India and Japan.

While the latest e-commerce trends from this research shows that both SMEs and consumers in AMEA agree that there’s room for further growth in the already booming e-commerce sector, there are still challenges ahead. Many e-tailers are struggling to cope with the increasing demand and cannot recruit fast enough. This has a knock-on impact on service levels. E-tailers believe they are providing a higher level of service than consumers perceive.

Mismatch on Service Experience

As more consumers participate in the on-demand economy and increasing shipment volumes put pressure on e-tailers, maintaining customer service quality is critical.

In Malaysia, the survey data reveals that the biggest pain point in service gaps is that deliveries are taking too long, which is cited by 71% of consumers within the study, as the majority (79%) of online orders typically take 3 days. The second pain point cited by consumers in Malaysia is having to return products (42%), following by the difficulty in finding products online (33%) as the third pain point.

The service experience mismatch varies widely across the 11 Asia Pacific markets ranging, with Malaysia seeing the widest gap, followed by the Philippines and Singapore.

Too Few Experienced People

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.

A further 73% had experienced extremely high levels of resignations over the past 12 months as the global Great Resignation phenomenon has impacted the AMEA region. 62% believed there were too few people for too many jobs with e-commerce marketing and sales experience being most in demand. SMEs are adopting a dual approach in response, recruiting talent from outside their business and upskilling current staff through training to meet demand in a tight employment market.

Logistics Providers Are Here To Support

“E-commerce is gaining more importance in people’s life, as consumer needs continue to evolve.

“We are well positioned to support businesses take advantage of future growth of e-commerce in Malaysia, with a dual focus on meeting the needs of e-tailers and their end-consumers. For e-tailers we provide simple, streamlined solutions which make order fulfillment easier.

“While for the end-consumer the priority is to provide speedy, reliable, trackable delivery, that enhances overall service experience,” says SC Chong, Managing Director Operations, FedEx Express Malaysia.

FedEx is integrating its services with e-commerce marketplaces so e-tailers can generate FedEx shipping labels and use additional FedEx features, such as Express Shipping Services and International Shipping Documentation Service, without leaving the platforms. Easy to use, friction free services like these make it easy to onboard new staff and help improve the work experience.

In addition, FedEx® International Connect Plus (FICP), launched last year was recently expanded to benefit e-tailers across fourteen markets in AMEA. This value-for-money international shipping solution delivers most shipments between 1 to 3 business days within the AMEA region, which meets consumer expectations for speed of delivery according to our survey.

And, delivery customization solutions like FedEx® Delivery Manager allows e-tailers to offer their customers the personalized service, and freedom to manage and control their shipping preferences, which today’s consumer demands.