Trade expert calls on SMEs to intensify online presence

CEBU, Philippines - Although businesses in the Philippines have already recognized the importance of technology and eCommerce to get ahead with global competition, an international trade expert called on Filipino SMEs to intensify its presence in the online highway.

United Nations Conference on Trade and Development (UNCTAD) urged businesses in the Philippines, especially SMEs, to take time and understand how to leverage eCommerce in order to sustain competitiveness.

Mukhisa Kituyi, UNCTAD secretary general said that there is a need for businesses to exploit the opportunities offerred by digital economy, where tapping global trade is no longer a difficulty.

In a statement, Kituyi said that global trade is undergoing a revolution, driven by new information and communications technology (ICT). 

Against a background of sluggish global growth, the value of online trade accelerated from US$16 trillion in 2013 to $22 trillion.

According to Kituyi the Internet connects goods and markets, reduces overheads, and boosts productivity, thus it is a great enabler to unbottle a lot of the energies that exist in different economic sectors.

He suggested that SMEs can use marketplaces to sell, in control with their set price and terms.

Recently, Southeast Asian companies, including those operating in the Philippines are warned to catch up with its growth in eCommerce platform as recent study showed that online retail is lagging behind over other continents.

Management consulting firm Bain & Company's in conjunction with Google warned that e-commerce in the region is proving to be a tough nut to crack due to constraints in Southeast Asia’s logistics and payments infrastructure.

Online retail represents a US$6B market in Southeast Asia, but with online sales below is only below four percent of total retail.

"The region still lags well behind developed markets and even other developing markets," revealed the study.

According to the Bain-Google report, which includes a survey of more than 6,000 Southeast Asian consumers across the Philippines and five other markets (Singapore, Malaysia, Thailand, Indonesia, Vietnam), digital influences just 20 percent of consumer purchases, particularly mobile phones, clothing and laptops. 

Locally, the percentage is slightly higher at 34 percent, but the country is poised for further growth as large parts of the region – mainly those outside Tier-1 cities – become ‘mobile first’ and leapfrog older technologies.

However, while 250 million consumers are now connected via smartphone and 100 million engage in online transactions, eCommerce related activities are moving a slow pace.

Online retail sales across Southeast Asia could hit US$70 billion by 2020.  While this does not yet match the pace of China ( now a more than $500 billion market)– multinational retailers are finding it harder to ignore the region’s emerging influence.

Digital media connectivity in Southeast Asia on the other hand, now rivals that of China, as more than 150 million consumers in the region are digitally active, with high levels of product search and engagement. (FREEMAN)