SMEs optimistic about e-commerce growth

MANILA, Philippines — Small and medium enterprises (SMEs) in the Philippines are among the most optimistic about the growth of e-commerce use in their businesses in the next three years amid the growing preference from consumers, according to a research commissioned by FedEx Express.

In its What’s Next in E-Commerce survey, FedEx Express asked SMEs and consumers in 11 markets in the Asia Pacific, Middle East and Africa region (AMEA) to explore the continuing evolution of e-commerce in the region and identify the trends that could fuel their future growth.

Results of the survey showed that 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 10 SMEs believe e-commerce will become more important in their business in the next three years and nine in 10 believe they are well prepared for the challenge,”FedEx Express said.

It said 80 percent of consumers reported that e-commerce had taken a greater share of their total purchases over the past three years while 71 percent saw 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,”FedEx Express said, adding that e-commerce currently represents less than six percent of the total retail sales in each of these markets.

In contrast, SMEs and consumers in Japan and South Korea see the least potential for significant future growth.

“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 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,” Preet said.

Meanwhile, FedEx Express said 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 percent gap between how SMEs rate their own ecommerce customer experience and how consumers view it,”FedEx Express said.

It said the biggest gaps appeared in having an efficient returns service (13 percent) and access to customer support (11 percent).

Survey results showed that deliveries taking too long is the number one pain consumer point (53 percent) followed by handling returns (42 percent).

FedEx Express said 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.

It said  this trend is most pronounced in Malaysia, Singapore, and the Philippines, signifying that SMEs in these three markets need to up their game  to begin to live up to consumer expectations.

“The research reveals the evolving needs and expectations of consumers and FedEx is well positioned to support SMEs to take advantage of new opportunities. We continue to bring new solutions that empower entrepreneurs to focus on their businesses and cater to their customers more efficiently, and recently launched day-definite e-commerce delivery service in the Philippines, enabling e-commerce growth,” said Maribeth Espinosa, acting managing director at FedEx Express Philippines.