New FedEx study identifies new-normal e-commerce prospects for SMEs

(Press Release)

The latest e-commerce trends from research commissioned by FedEx Express, a subsidiary of FedEx Corp., and one of the world’s largest express transportation companies, show that both Small and Medium-sized Enterprises (SMEs) and consumers predict future growth and are positive about the next innovations in digital technology.

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 in the region and identify the trends that could fuel their 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 on 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, FedEx Express President (AMEA). “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 US$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 10 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, the 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.

This trend is most pronounced in Malaysia, the Philippines, and Singapore signifying that SMEs in these three markets need to up their game considerably to begin to live up to Consumer expectations.


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

“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.

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 1 to 3 business days within the AMEA region, which meets consumer expectations for speed of delivery according to the survey. And, 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.