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E-Commerce evolution provides enhanced opportunities for SMEs

The e-commerce environment in the Asia-Pacific region continues to experience growth and dynamism. According to a recent FedEx e-commerce trend report, both small and medium enterprises (SMEs) and consumers are confident that this positive e-commerce momentum will continue.

Eight in ten Australian SMEs surveyed believe e-commerce will become more important for their business in the next three years. Regionally, 80% of consumers surveyed reported that e-commerce had taken a greater share of their total purchases over the past three years, while 71% see further increases ahead. 

While this current and expected growth in the e-commerce sector has given Australian SMEs and e-tailers the opportunity to grow their businesses and drive sales overseas, it has also brought about some challenges around expectation mismatch.

These include the accelerating demands from consumers for day definite delivery along with increased volumes of orders. This growth means businesses increasingly need reliable logistics and transportation partners ready to connect their goods to the end-consumers efficiently.  

The logistics and transportation industries are responding by introducing new and enhanced solutions that support established operator consolidation, as well as provide greater infrastructure and technological investment to enable the growth of cross-border e-commerce. 

Australian and Regional E-commerce growth and cross border trade opportunities

Australia is the eleventh largest e-commerce market in the world with US$31.3 billion in revenue in 2021.

Between now and 2025, e-commerce in Australia is expected to increase at a 5% annual rate, contributing to the APAC region’s annual growth rate of 8.2%.

E-Commerce sales are expected to increase over the coming years as new markets emerge and global growth continues, and this development is propelled by East and Southeast Asia with their growing middle class and lagging offline infrastructure found the recent FedEx ‘What’s Next in E-Commerce’ survey.

Asia Pacific, which includes the world’s biggest e-commerce markets like India, Mainland China, Japan and South Korea, will see revenue from e-commerce sales reaching US$2.09 trillion this year as 57% of the region’s population shops online. 

Additionally, Asia Pacific and Australasia will account for more than 45% of the global growth in e-commerce value during 2020-2025. Both SMEs and consumers are maturing in their use of e-commerce and both groups agree that the pandemic-driven utilisation of e-commerce is here to stay.

The increased e-commerce links between Australia and its regional trading partners like Japan, South Korea and the ASEAN region means Australian SMEs have access to a larger market than ever to drive revenue.

In response to increasing expectations, more omnichannel services have emerged giving e-tailer’s customers an assortment of choices for how and when they receive deliveries with the choice of home delivery.

Technological innovations make it easier for SMEs to operate and grow 

The logistics and transportation industries, including FedEx, are innovating through technological advancements as consumer demand rises along with service expectations.

Digital self-service technologies are an important area of technology acceleration. The FedEx Delivery Manager International (FDMi) solution is one such example that enables recipients to plan deliveries and to request changes to their delivery date and or location, whilst the recent introduction of Picture Proof of Delivery (PPOD) express residential deliveries provides reassurance that packages have been delivered.

To meet our customers’ growing need for efficiency, streamlining the e-commerce ecosystem is another important way for the industry to evolve. Making programs compatible with e-platforms is a fast-growing trend, as logistics companies strive to integrate their products as seamlessly as possible with their customers’ programs.

At FedEx Express Australia and New Zealand, we recently announced a collaboration with a leading e-commerce platform, Starshipit, which will allow e-tailers to automatically generate their own ‘personalised’ FedEx Express shipping labels without leaving the e-commerce marketplace platforms, reducing the management burden, greatly reducing delays, and increasing customer satisfaction.

Developments like these could be gamechangers. And not just for online entrepreneurs. The biggest winners could be the legions of offline merchants, who are now more determined than ever to leverage their brand power on the digital frontier by creating the best possible customer experience.

Logistics and transportation players are here to support

At FedEx Express, we’re here to support businesses as they expand, tap new markets and grow customers. As e-commerce trends emerge, providing a clear roadmap for where the industry is headed can help businesses grow.

Companies of all sizes can quickly grow their cross-border businesses if they’re able to connect to more online shoppers in Australia and beyond. For e-commerce merchants looking to stay ahead of the curve when expanding services overseas, the more convenience they can offer customers, the better.

Need more tips and solutions for your small business or want to learn more about how the logistics industry is responding to consumer demands and making it easier for businesses to expand globally, visit FedEx Business Insights  

Data Source: FedEx Express’ What’s Next in E-Commerce survey 2022.

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Peter Langley

Peter Langley

Peter Langley is the Vice President at FedEx Express Australasia

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