Sylvie Van Den Kerkhof, Vice President of Marketing, UPS Asia Pacific
According to the Asia Development Bank, 96% of businesses in the Asia Pacific are small or medium-sized, and they employ some 60% of the workforce. However, with the coronavirus pandemic bringing foot traffic at retail establishments to a virtual standstill in many parts of Asia, it’s these SMEs that are among the hardest hit. Often operating on tight margins, these businesses are particularly susceptible to market shocks, and the coronavirus, no doubt, qualifies as the biggest shock in recent memory.
Life, invariably, finds a way to go on, even if behind closed doors and under lockdown. This year has seen more people going online to obtain their daily needs, like groceries and meals, as well as clothing and other lifestyle purchases. Even prior to the pandemic, e-commerce had an ever-increasing share of the retail pie, but the crisis has further accelerated that shift and has driven changes in buyer behaviour that are likely to be with us for the long term. While the jury is still out on how long the pandemic is set to persist amid subsequent waves of infection, several governments in the region are in the process of cautiously reopening. It’s possible that a new normal for retail and life as we know it may emerge from the lockdown.
If your business isn’t yet online by now, or only has a minimal presence without online retail capabilities, now is an opportune time to change this—whether you’re looking to reconfigure your business to recapture patronage from customers in your local area, or you’re thinking about branching out into other markets around the world to diversify revenue streams, or you’re using the downtime to take stock and restructure your business for the post-pandemic retail reality.
Go local, regional, or global?
For many businesses, e-commerce offers an unprecedented level of reach; where they once would have only had a stall at a night market, business owners are now reaching customers on the other side of the world thanks to online shopping. Grocers and food and beverage businesses might still be restricted to customers in their immediate locales due to the nature of their product; however, many of these businesses will have expanded into online food delivery during the lockdowns, and will likely to continue to harness this infrastructure even as restrictions are eased. But if you’re not selling perishables, it could be a good time to look beyond your regular customer base; if your products have broad appeal, perhaps they could be sold across your country, or even across borders? Regardless of where you cast your net, business owners looking to leverage digital technology and step into the brave new world of e-commerce should consider these following insights.
It’s not a decision to make trivially and one of the first steps you’ll want to take is to do some market research, seeing whether there are other businesses offering similar products in particular markets, and what their price points are like. You shouldn’t be intimidated at this prospect: according to UPS’s Pulse of the Online Shopper study, which tracks online consumer purchasing trends and preferences, the most common reason that shoppers buy from non-domestic merchants is that particular products can only be found internationally, so there are plenty of e-shoppers who are looking further afield to make purchases.
Once you’ve established viability and a potential niche market for your product, you’ll need to take into consideration some of the logistical aspects of getting your items into the hands of your customers. It may sound deceptively simple: mail your order and move on from your happy customer to the next. However, the devil is in the details, and all of the steps in between can complicate the process — in particular, the cost of shipping, whether your destination market has tariffs on certain imported goods, and whether some classes of goods are restricted. A seasoned logistics provider can assist you to make informed choices here, and these choices may lead you to focus on particular markets with lower costs and barriers to entry.
Optimising your online presence
Establishing an online retail presence may sound daunting and complicated, but rest assured, HTML or coding knowledge is entirely optional, and building your own online shopping mall from scratch isn’t necessary. Marketplaces such as Amazon, Lazada, and Alibaba are widely used in many countries in the region and offer a cost-effective solution to get your products (digitally) in front of consumers. These platforms present a great opportunity for businesses to quickly replace lost revenue in a relatively short span of time.
Developing a dedicated site is another possibility open to ambitious businesses. Offering greater room for customisation, creativity is the limit for business owners to build customer-focused online offerings. One thing to note: optimising your page for mobile commerce can mean make or break for your business. According to our research, over a quarter of online purchases, today are made on a mobile device. Their purchase journey is also non-linear and can involve combinations of browsing on mobile devices and completing the purchase on a desktop, or vice versa, so you should aim to offer a consistent, seamless browsing and buying experience across these mediums.
Our study also offers further insights into ensuring the customer journey runs smoothly through to the point of purchase. Credit and debit cards and digital payment services like Paypal or Alipay are the most commonly used payment methods at checkout, but other payment services from Apple or Android are also used, as well as some local operators. While it would be difficult to cater to the multitude of options out there, it’s important to provide the prevailing market standard as an unfamiliar payment option can be enough for shoppers to abandon their carts. Another consideration, particularly if your business sells some big-ticket items, is to partner with banks and financial institutions that can allow you to offer instalment payments to customers—which can be an appealing option during leaner times such as these.
Delivering customer satisfaction
Having sealed the deal with your customer, the final, crucial stages of the online shopping experience lie in product delivery and visibility of it. According to our study, nearly 94% of online shoppers indicated that having a guaranteed delivery date for their shipment is important. When you consider that many consumers are now spending more time at home, sometimes literally waiting on their order to arrive, this requirement becomes exponentially more important.
While having visibility and assurance in the delivery process is important, it doesn’t necessarily mean that all customers are going to want their shipment ASAP; some customers may prioritise both urgency and definite timelines and are willing to pay a premium for it, but others may be willing to wait, and simply want a clear delivery date in times like these. Further to this point, online stores can offer a variety of delivery options spanning a range of budgets and needs for delivery. Having easy-to-use, self-service tracking options is also a good way to help manage customer expectations, as this allows people to plan accordingly if there’s any change to the delivery date.
Finally, having paved the way to purchase and delivery for your customer, if the product somehow isn’t the right fit for them, or they may have simply changed their mind. This is where product returns come in, and this can make all the difference in keeping a loyal customer. We found that 70% of consumers in the Asia Pacific region agree that the returns experience impacts their overall perception of a business. Additionally, 40% of Asia Pacific online shoppers make sure to read return policies before purchasing an item, so catering for reverse logistics through a simple and convenient returns solution is a vital part of the process.
Looking back at the bigger picture, one of the other major make-or-break factors that businesses need to consider is supply chain reliability. With many suppliers currently overextended, understaffed, or experiencing issues with their own upstream suppliers, it’s important to look at contingency plans to avoid disruption to your sales cycle just because of a missing key component.
Trying a different approach in trying times
The coronavirus pandemic has hit the reset button on many aspects of daily life as we know it, forcing us to rethink about how we live, play, and conduct business. It does also present an opportunity for business owners to reconfigure their operations for the recovery and guard against future shocks.
At UPS, we have been running webinars for SMEs across the region to help them better understand what they can do to shore up their business during this time, and while there’s a great deal of concern among many of the participants, we also see a lot of optimism and enthusiasm for dealing with this as proactively and decisively as possible. We have helped businesses of all sizes to both enter the e-commerce market and expand their presence online during this unprecedented period of change; our experience with e-commerce points to the fact that these investments often pay off in the long term. And right now, growing your digital presence will go far to future proof your business and allow you to reap returns when the recovery comes around.