Article: E-commerce set to boost SME growth, but talent still a challenge

Talent Management

E-commerce set to boost SME growth, but talent still a challenge

While the future looks bright, e-tailers in AMEA region say talent and recruitment has proven challenging for SMEs amid surging demand.
E-commerce set to boost SME growth, but talent still a challenge

Both SMEs and consumers in Asia Pacific, Middle East and Africa region (AMEA) are maturing in their use of e-commerce and both groups agree that the pandemic-driven utilisation 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, shows a recent research commissioned by FedEx Express, a subsidiary of FedEx Corp and one of the world's largest express transportation companies.

Further 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. 

The What’s Next in E-Commerce survey polled SMEs and consumers in July 2022 across 11 markets including India, Australia, Hong Kong, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam 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 personalisation, 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 spend,” said Kawal Preet, president of 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 capitalise 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.”

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 US$2.09 trillion this year as 57% of the region’s population shops online. 

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. 

In India, 80% of SMEs agree that consumer buying behaviour 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 capitalise 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.

“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,” said Kami Viswanathan, senior vice president of FedEx Express Middle East, Indian Subcontinent and Africa Operations.

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 tools.

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Topics: Talent Management, Technology

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