The global e-commerce market is exploding and is estimated to increase to $4.5 trillion in 2021.
With this boom comes an opportunity for Australian exporters to grow their businesses across borders.
There are some powerful businesses that barely existed a decade ago that act as testaments to the extraordinary opportunities ahead of us.
Mobile has become a primary touch point with customers and they expect the kind of customer experience and convenience that we take for granted today, from ordering a ride to paying for online purchases.
Whether it’s secure payment, returns, last mile, cross-border – or a multitude of others such as fulfilment, tracking, transport, even shopping cart management, each element is part of a highly complex ecosystem supported by logistics, which is the engine of global e-commerce.
While we’re not going to be able to predict exactly how e-commerce is going to evolve, there are a few areas that we believe are important considerations for Australian businesses to reach international markets.
- Investment in infrastructure
A virtual buying and selling world must be rooted in the physical, and there is not enough focus on what happens from the mobile phone onward. This is equally important for retailers – there is an incredible opportunity for retailers to leverage their infrastructure in combination with the kind of services FedEx provides.
- Distinguishing between local and global needs
What China needs and wants is very different from Singapore or Japan. Exporters have to focus on the markets they are targeting to determine consumer demand, and then look to how e-commerce can enhance this.
For instance, our research shows that consumers in China value Australian-made products, with country-of-origin playing an important role in their purchasing decision.
Whereas, Australian consumers value price point and access to information about the product as key in helping to push their purchases over the line. Exporters may benefit from remembering that to go global, they must think of the local. This may assist them in successfully reaching customers in new markets.
We also need to separate out what are essentially local delivery challenges – what we call “last mile” challenges – as opposed to global challenges. Our research also found that delivery time was the most prominent barrier preventing Chinese online shoppers from purchasing Australian products. Businesses need to be aware of the delivery challenges consumers are facing in the local market, this will help them to give customers the e-commerce experience they expect.
- Increasing efficiency and convenience in delivery
Residential e-commerce is the fastest growing market and requires innovation to make delivery to consumers more efficient. As more consumers shop online, we have to expand alternative delivery options from having a package shipped directly to their doorstep to self-collection solutions like 7/11 and locker boxes, to more flexible and convenient customised home deliveries.Increasing efficiency and convenience in delivery
We also need to gear more services to small and medium-sized businesses. These businesses need access to a logistics network that helps them achieve profitable and scalable global growth, to ship seamlessly to international locations.
Another area is returns, which may not sound glamorous but is an increasingly important part of the picture for global e-commerce.
E-commerce has a much higher rate of returns than brick and mortar purchases – it ranges from 15% to as high as 30%, and we must increase confidence in ease and methods for return if cross-border commerce is to grow.
While 90% of logistics is happening behind the mobile phone, there are no apps or innovations that can replace the aircraft, trucks, or other infrastructure that enables the physical transportation and delivery of goods around the world every day.
We must keep evolving to meet the changing needs that digital and e-commerce is bringing.
FedEx believes the future for e-commerce must be viewed within a wider framework as a complex ecosystem.
Karen Reddington is Regional President, Asia Pacific, FedEx Express