New FedEx research shows e-commerce opportunities set to grow for SMEs under 'new normal'
Asia Pacific to see revenue from e-commerce sales touch $2.09 trillion this year as 57% of region's population shops online
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, show 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.
The What's Next in E-Commerce survey polled small and medium-sized enterprises (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 and identify the trends that could fuel 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-19 has accelerated our lifestyles to a pivot point where shopping online has been normalised across all demographics, and there's no going back. With that, e-commerce is set to take a growing proportion of total consumer spend," 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."
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 Korea, will see revenue from e-commerce sales reach $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 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. SMEs and consumers in Japan and South Korea see the least potential for significant future growth.
Expectation mismatch on service experience touchpoints
As more consumers participate in the on-demand economy and increasing shipment volumes put 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%).
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 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 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
FedEx is supporting the future growth of e-commerce across AMEA with a dual focus on meeting the needs of e-tailers, and their end consumers. For e-tailers, FedEx provides simple, streamlined solutions which make order fulfilment easier. While for the end-consumer, the priority is to provide speedy, reliable, trackable delivery, that enhances the overall service experience.
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 one to three business days within the AMEA region, which meets consumer expectations for speed of delivery according to our survey. Delivery customization solutions like FedEx Delivery Manager allows e-tailers to offer their customers personalized service, and freedom to manage and control their shipping preferences, which today's consumer demands.
About the What's Next in E-Commerce Survey
The online survey was conducted by Harris Interactive in July 2022 across 11 markets including Australia, Hong Kong, India, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. 300 small and medium businesses with less than 250 employees engaged in e-commerce were polled in each market alongside 500 consumers (1,000 in India) over the age of 18.