The burgeoning e-commerce industry
As late as January 2020, establishing a robust online presence was something small businesses looking to grow bigger needed to start getting a handle on to prosper in the global marketplace. It presented a huge opportunity to enter new markets and online retail sales were gradually creeping up on brick-and-mortar sales the world over.
Fast forward nine months later and the shift towards e-commerce has accelerated in a way that could never have been expected, outstripping all previous growth projections.
Customer expectations were already changing, but now anytime, anywhere online shopping has become the standard, with convenience and transparency driving purchasing decisions. With people spending more time at home, consumer buying behaviours are changing irrevocably, and consequently the global retail industry is experiencing a pivotal shift.
So, what is the impact of this exponential growth on online sales for businesses?
Although it’s still early in terms of knowing actual numbers, a recent study by e-marketer estimated that U.S. e-commerce sales will jump 18 percent in 2020, an unprecedented rise they put down to certain e-commerce behaviours having been ‘catapulted three or four years into the future in just three or four months’.
Similarly, Adobe’s recent Digital Economy Index showed that e-commerce expenditure in the Middle East exceeded expectations by more than $52 billion since the lockdown began in March. Total online spending hit $82.5 billion in May alone; up 77 percent year-on-year. The UAE, in particular, witnessed an incredible 300 percent rise in consumer demand recorded for e-commerce services in the first five months of the year. E-commerce went from a nice-to-have to a must-have seemingly overnight.
In contrast, research by SME10X for UPS last year found that only 36 percent of UAE small businesses surveyed were currently offering online sales, and only four percent were actively considering e-commerce as a sales channel in the future. For companies not already online, the future is upon us and for most small businesses e-commerce is no longer a choice, but a key ingredient for remaining viable.
That said, there is some good news on the horizon for local businesses looking to join the online revolution. The barrier to entry is dramatically lower, and consumers’ appetite for independent internet retailers is at an all-time high. For the most part, small businesses are more agile than larger ones to adapt and implement an e-commerce strategy relatively quickly.
A study by McKinsey outlines three distinct routes to market for those looking to build an online presence. By far the fastest way to enter the online sales sphere is through social media, which can be leveraged to create new touch points with existing customers and attract new customers. Also, effective and requiring minimal investment is taking advantage of existing virtual online marketplaces. Although the commissions are to be taken into account, the customer reach is vast and can provide a relatively quick and simple way to get started without the initial outlay for a full-blown e-commerce platform. Finally, the study estimate that a company could be fully set up for online sales with an integrated e-commerce solution, end-to-end operations, standardized product-assortment processes, and multichannel marketing within three months. A bigger commercial investment, but one that guarantees a sustainable platform for growth in the future.
One reason it might make sense for local small businesses to invest in an integrated solution is that the local e-commerce eco-system is well established and supported by international logistics companies that can manage most aspects of the process, from international shipping to last mile delivery.
Since its early days, global logistics provider UPS has helped countless small businesses adapt and grow via tailored shipping and delivery solutions, operational expertise, order management tools and more. Entrepreneurs can focus on perfecting their product and raising capital, while UPS prioritizes getting their product delivered on time with its tailored logistics services.
And in the current market, where every decision counts, this really could be the difference between sinking and swimming. For small businesses that are dipping their toes into e-commerce for the first time, finding a partner with the capabilities to meet customers’ heightened expectations of immediacy and convenience will be crucial.
Enterprises of every size can partner with UPS to put the power of logistics to work for a sustainable and successful e-commerce strategy, which is the need of the hour.