SME

By Eric Tan | May 30, 2023

The pandemic has fueled the e-commerce revolution. Here’s how Singapore SMEs can stay ahead of shifting consumer behaviors.

There was a time when the only way to purchase fresh produce was to make a trip to the market. Global developments in the past three years have accelerated e-commerce adoption and significantly impacted consumers’ buying behavior. Consumers, particularly the older generation, were introduced to the benefits of online shopping during the pandemic and there’s no going back.

According to McKinsey, the pandemic squeezed ten years of digital sales penetration into just three months. The changes brought about by the pandemic are expected to persist and continue to evolve over time.

According to our e-commerce research, several trends are shaping the future of e-commerce in Singapore. It’s more important than ever for retailers to embrace these trends to stay ahead of the competition.

The rise of marketplace selling

Around 57% of Singapore e-commerce revenue of SMEs is generated through online marketplaces, which are great for attracting more customers and increasing traffic. They’re also easy to set up, cost less, and carry fewer financial risks.

81% of e-commerce spend by consumers is now through marketplaces, compared to 67% three years ago. What’s more – over half of consumers shop exclusively from marketplaces. The results illustrate the importance of catering to consumers’ desire for a convenient and one-stop-shop shopping experience.

In addition, with the rise of live stream selling, a responsive logistics service would be extremely important for e-tailers when they need to handle unexpected increase in orders, while reducing abandoned carts and maximizing conversion rates at the same time.

Competitive shipping rates, time-definite deliveries, order tracking capabilities and customer-friendly returns policies are just a few examples that can help prevent abandoned carts and ultimately improve the overall customer experience. And very often, these can be accessed by e-tailers relatively easily and conveniently within an online marketplace.

Shoppertainment is set to grow significantly

The industry has seen a rise of shoppertainment over the past year. From homemade snacks to luxury goods, many businesses are actively using live stream platforms and influencers to engage and interact with customers real-time. One of the noticeable impacts of the pandemic was the absence of face-to-face interaction with brands and products. Digital advancements stepped in to fill this gap as live streaming provides an opportunity to connect with consumers and make your brand more approachable.

Efficient delivery is key to customer satisfaction

Beyond achieving record sales, businesses should also implement measures in their supply chains to meet the influx in consumer demand. Consumers expect increasingly accurate parcel tracking and delivery service that can be managed easily via a smartphone. These features have now become a must-have in the e-commerce industry.

To meet the evolving demands of modern consumers, businesses need to prioritize a seamless delivery experience. Delayed or damaged deliveries upon arrival, and the inconvenience of adhering to a specific delivery time and location are just a few common gripes among consumers nowadays. That’s why working with a logistics service provider which can provide reliable and flexible delivery options is a game-changer to customer satisfaction. This is especially true in markets such as Singapore, Malaysia, and the Philippines, where businesses need to up their game considerably to meet consumer expectations.

At FedEx, for instance, we provide customers with a convenient option to pick up their packages anytime 24/7 at a nearby locker station in the Pick Network.

More than one way to pay

Southeast Asia’s evolving payment ecosystem presents SMEs in the region an excellent opportunity to reach more customers, particularly the younger generation, who are more tech-savvy with mobile payments and digital wallets. In Singapore, 63% of consumers prefer to buy from companies that offer newer payment methods, which helps them differentiate from other e-commerce companies.

To remain competitive in this fast-paced industry, SMEs should consider payment methods that offer speed and convenience, such as QR code payments. Other alternatives include ‘buy now, pay later’ (BNPL), where Gen Z and millennial consumers are the top users of these services.

Whether SMEs will be able to leverage the e-commerce wave largely depends on their ability to adapt, innovate, and take advantage of these opportunities.

To find out more tips and insights for your e-commerce business, click here.