Discuss about the Global e-commerce strategies for small businesses.
Ecommerce can be defined as the act of purchasing and selling goods as well as services online on the internet medium available. The electronic medium commerce is based on technologies which range from electronic funds transfer, mobile commerce, and supply chain management , marketing on the internet, online transactions, and electronic exchange of data. managementof inventory and the data collection systems (Laudon & Traver, 2013). The primary medium used by the ecommerce data is the World Wide Web and other mediums like the email. E-commerce industry has formed a hub for the sellers and the buyers where they can meet through the electronic medium in any part of the globe and exchange the goods through shipping. E-commerce business has also boosted the logistics business to a great extent.
South East Asia is often considered to be a developing country but has one of the largest markets in the globe with countries like Indonesia, China, Singapore and India under its umbrella. The e-commerce trade in the South –East Asian countries emerged in the year 1990 with the Dot Com era and has reached soaring heights since then (Huang & Benyoucef, 2013). Earlier only international brands provided e-commerce services in this region, but now almost every country in this region has a specialized business offering all ecommerce services.
To throw light on the state of ecommerce industry in South-east Asian countries through the application of theoretical concepts and practical examples using various statistics and data sourced from secondary sources.
The year 2017, has been one of the most critical years for South East Asia as the Gross Merchandise Value of the goods that were transferred were more than $10 million dollars with a spectacular growth rate of 41% over the last few years (Andam, 2014). Various events took place during the year and some of them are listed as follows:
The given section will shed some light onto the most critical E-commerce metrics gathered from various websites thereby stating the similarities as well as differences between different markets (Barnes & Hunt, 2013). The section concentrates on the performance of six major countries like that of Malaysia, Indonesia, Thailand, Philippines, Singapore and Vietnam
The South East Asian region countries are mobile oriented e-commerce economy and it has been able to surpass all other economies with reference to this aspect. The use of the mobile phones in the given countries has lead to a revolution like never before and therefore, the mobile phone traffic has increased considerably by 12% since the last year, out of which 75% accounts for the use of e-commerce websites.
This has urged the various companies to form online applications which are mobile friendly to reach out to the consumers. This is because the present age is the age of millennials and for this purpose, the use of mobile phones have considerably increased which has lead to an increase in online shopping and exchange of services through mobiles.
The leading country in terms of mobile traffic is Indonesia where around 87% of the traffic is towards ecommerce websites and in each of the countries the desktop use is less than 30%.
The conversion rate is considered to be one of the most important metrics for any e-commerce business (Sila, 2013). The conversion rate of a company is a reflection of both the effectiveness of the website to satisfy the customers and the quality of products and services which are being offered in the given website.
Conversion rate can be described as the percentage of those customers who visit the website and the visit actually instigates a purchase in the given organization. Many businesses aim to improve this conversion rate to achieve more success. In terms of conversion rate, if an average is taken to be x. Vietnam has been leading with respect to the conversion rate, the rate being 30% higher than the average. . Singapore and Indonesia also have a considerable conversion rate in terms of purchase.
The basket size can be described as the total amount of purchases made by each customer on every order with respect to a given period of time. This metric is one of the key metrics of e-commerce operator and tends to have a huge impact on the profitability of the business enterprise (Laudon & Traver, 2013).
The basket size can be quite different among the market positioning of each merchant and the verticals.
The time of purchase is an important aspect of any business. It helps the e-commerce business owners to understand at what time do shoppers make the maximum purchases and hence, for that period of time they can make the maximum profits and sales by unit by putting up attractive offers.
According to Hannak et al., (2015), the highest number of orders from the South-east Asian countries is received between 9am to 5pm when people are either attending school or are at their office. However, in the particular metrics, Singapore has a different outlook and it makes the maximum purchases after at 10pm. The trend suggests that there exists a drop in terms of the number of purchases between 5pm to 7pm as most people are travelling at this time and returning to the comfort of their homes. The peak then starts picking up at around 11 pm.
If a business wants to figure out the best day of the week from the point of view of the customers then it can be stated that the best day for the shopping websites is on Wednesday where the activity is comparatively higher than the other days of the week (Cavusgil et al., 2014). This percentage ranges from 4% to 15% more than the average days.
The mode of payment also plays a key role in determining the amount of sales that is made by the e-commerce websites. Hence, this metric determines the mode of payments offered by the different companies to its customers and which is the most preferred mode.
The trend observed in the South East Asian countries reflected that there exists a low credit card penetration in the countries except that in Singapore (Ahmed & Ridzuan, 2013). This trend is quite different from the trends observed in the Western markets. Hence, due to this fact, diverse payment options have emerged. It could be analyzed that the merchants are facing a huge amount of problem, with respect to the varied trends in terms of payment options in different countries.
From the given trend it can be observed that cash on delivery is the most used payment mode and accounts for more than 80% of cases in Vietnam and Philippines as well. The second most popular method is the Bank transfer method and more than 80% of the merchants offer this in Thailand and Vietnam.
The payment through installment is also a popular method both in Vietnam and Indonesia with around 40% of the population opting for these methods.
Conclusion
Therefore from the given analysis it can be stated that the future of e-commerce industry in South East Asia is much brought and the markets generate a huge amount of sales for the companies and merchants. It could be observed that the trend of the given market is quite different from that of the Western markets with respect to the payment methods adopted by the majority of the population and the peak hours and days in a weak. Hence, the merchants need to be observant of these trends and make considerable strategies to penetrate deep into the market and to combat the competition with the local competitors. The given report highlighted a brief scenario of the state of e-commerce in South East Asia and highlighted the information available though different data and charts for better understanding.
References
Ahmed, E. M., & Ridzuan, R. (2013). The impact of ICT on East Asian economic growth: panel estimation approach. Journal of the knowledge economy, 4(4), 540-555.
Andam, Z. R. (2014). e-Commerce and e-Business.
Barnes, S., & Hunt, B. (Eds.). (2013). E-commerce and v-business. management .
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.
Da Costa, E. (2016). Global e-commerce strategies for small businesses. Mit Press.
Hannak, A., Soeller, G., Lazer, D., Mislove, A., & Wilson, C. (2014, November). Measuring price management and steering on e-commerce web sites. In Proceedings of the 2014 conference on internet measurement conference (pp. 305-318). ACM.
Huang, Z., & Benyoucef, M. (2013). From e-commerce to social commerce: A close look at design features. Electronic Commerce Research and Applications, 12(4), 246-259.
Laudon, K. C., & Traver, C. G. (2013). E-commerce 2012: Business. Technology, Society, 12.
Laudon, K. C., & Traver, C. G. (2013). E-commerce. Pearson.
Li, Y. M., Wu, C. T., & Lai, C. Y. (2013). A social recommender mechanism for e-commerce: Combining similarity, trust, and relationship. Decision Support Systems, 55(3), 740-752.
Sila, I. (2013). Factors affecting the adoption of B2B e-commerce technologies. Electronic commerce research, 13(2), 199-236.
The Startup(2018). The State of eCommerce in Southeast Asia in 2017 – The Startup – Medium. Medium. Retrieved 17 March 2018, from https://medium.com/swlh/the-state-of-ecommerce-in-southeast-asia-in-2017-5a779f962623
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