SMEs weathering the economic storm, thanks to e-commerce: eBay
By Benjamin Cher June 27, 2016
- SMEs can now go global at the fraction of the cost
- US the top destination for Singapore-based businesses retail exports
THE economic slowdown seems to be fast becoming the default setting, and in South-East Asia, the one silver lining – e-commerce – appears to be in the latter phase of the boom-and-bust cycle, at least in terms of investments.
But we shouldn’t be too quick to discount the region’s e-commerce revolution, says one industry executive, who believes that South-East Asian small and medium enterprises (SMEs) can still use e-commerce as a lever to level up.
Indeed, according to eBay Singapore country manager Teri Canayon (pic above), the region’s SMEs have been not too shabby in harnessing the technology and accessibility that comes with e-commerce to help them weather financial instability.
“E-commerce has opened doors for SMEs to venture into international markets while staying cost-effective,” she tells Digital News Asia (DNA) via email.
“Because of the convenience and reach it offers, the platform has proved valuable for weathering the financial instability of recent years,” she adds.
In Singapore for example, the export of goods is on the rise, and Canayon argues that this is a sign that e-commerce is helping SMEs deliver products and services beyond their usual borders.
“In Singapore, we have seen a continued rise in goods exports from approximately S$479 billion in 2010 to S$519 billion in 2014 (US$352 billion to US$381 billion),” says Canayon, citing the 2014/2015 annual report by IE Singapore, the government agency tasked with driving the country’s external economy.
“E-commerce has enabled a wider group of SMEs to deliver their products and services beyond our shores, even crossing continents – our internal data show that there are thousands of Singapore-based SMEs which are actively exporting goods to other countries in the past year,” she adds.
Not smooth sailing yet
But to maintain this momentum, there are three key trends that SMEs need to be cognisant of: The demand for mobile-first or mobile-centric experiences; the always-on mentality; and the non-stop consumer.
“As a new generation of consumers, competitors and technology platforms emerge, SMEs will need to cultivate a mindset for innovation and create a customer-centric strategy for where to play, and how to win,” says Canayon.
Today’s consumers expect brands to be accessible to them at all times, and the burgeoning mobile population means that SMEs have to adapt, and formulate a mobile strategy,
“With an estimated 3.4 billion people around the world now using a smartphone to connect, engage and shop, SMEs will need to ensure they deploy an integrated mobile-centric strategy that would allow them to directly connect with these tech-savvy consumers, 24/7,” says Canayon.
“For small business owners, this may be difficult to do from the ground up – hence, they need to work with partners or platforms that allow them to create a mobile presence without needing to develop anything from scratch,” she adds.
As for the always-on mentality, consumers today tend to shop or sign up for services wherever and whenever they want, and expect the same accessibility from businesses.
“As such, SMEs need to ensure that they offer a seamless and consistent experience across their sales channels – whether it’s having real-time updates of their offline inventory to their online stores, or having an always-on customer service channel,” says Canayon.
Governments on board
Traditional cross-border trade has never been smooth. There is a lot of red tape, especially around import duties and taxes, and customs inspections.
The e-commerce boom has helped smoothen these processes, and we have actually have governments to thank for that, according to Canayon.
“Luckily for SMEs which want to venture into e-commerce, governments today recognise the potential of the platform and the opportunities it brings for economies across the globe.
“To further promote cross-border trade, some organisations in the public sector have implemented incentive programmes.
“For example, earlier this year, the United States revised the De Minimis Threshold – the amount at which US import duties apply.
“This means that SMEs looking to expand sales in the United States no longer need to pay the US import duties when the prices of their products are under de minimis.
“Effectively, the cost to the American consumer is lowered and more American consumers will be encouraged to buy more from overseas as it’s easier and more affordable,” she adds.
In jurisprudence, de minimis is the Latin term for something so minor as to merit disregard – in this context, not worth taxing.
“The revised de minimis threshold also means that SMEs can now sell higher-value products directly to US consumers with much lower barriers (such as additional duty charges, hold-ups in customs, and paperwork),” says Canayon.
It appears that Singapore-based SMEs are making full use of this revised threshold: The United States is the top retail export destination on eBay for these companies. Other leading destinations include Australia, Canada, Germany and the United Kingdom.
Infinite competition, finite resources
But with everyone getting into the e-commerce action, SMEs need to move fast to get the resources they need to compete.
“The competition is intense, and this pressure isn’t just coming from the big names in the industry, it’s also coming from the traditional retailers that are investing in online platforms – and more recently, from social media players that are migrating into e-commerce,” says Canayon.
“To strengthen their e-commerce presence, SMEs will need to ensure they deploy a strong, cohesive and seamless omnichannel strategy to meet the demands of today’s always-on consumers.
“They need to be smart with how they approach this, particularly around the decision between building something from the ground up or making strategic partnerships with established platforms that would give them the infrastructure, technical support and reach they need,” she adds.
Huge opportunities for SMEs in cross-border e-commerce: PayPal
SEA Internet economy set to boom: Google-Temasek report
In SEA, e-commerce is largely going to be mobile: Criteo
Digital trends will kill off lone wolves: INSEAD prof
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