Internet opens the world to SMEs

With physical and virtual networks now more converged and ubiquitous than ever before, it is easier than ever for small and medium-sized enterprises to tap into the huge business opportunity of cross-border e-commerce.

Once the exclusive preserve of large multinational corporations, global trade is now available to anybody with a smartphone and a dream. Global logistics providers know this, because these entrepreneurs are our customers. We recently profiled one inspiring example - a small-business owner named Llewellyn Clarke from the tiny Caribbean island of Nevis, who manufactures hot pepper sauce.

Anybody, anywhere with an Internet connection can order the sauce and have it delivered to their doorstep. For thousands of e-tailers like Llewellyn around the world, this represents tremendous business opportunities.

Connectivity can be seen as the great leveler. Savvy SMEs are using this opportunity to break into new markets, triggering explosive growth in the e-commerce sector. By some estimates, global business-to-consumer e-commerce sales will total $2 trillion in 2015, up from $1.5 trillion last year. In the retail sector as a whole, e-commerce is driving the majority of all new growth

Clearly, this explosive growth is something that no global express logistics player serving SME e-tailers can afford to ignore. To better understand global consumer behavior around cross-border e-commerce, as well as that of SME e-tailers, Federal Express Corp commissioned Forrester Consulting to evaluate what is accelerating and slowing these buying and selling behaviors.

More than 9,000 online shoppers were surveyed in 17 markets.

The study revealed that both the challenges and opportunities of cross-border e-commerce are particularly pronounced in the Asia-Pacific region. These consumers report shopping online more frequently than the global average.

They also spend more. Annually, Asia-Pacific region online shoppers buy an average of almost $350 worth of goods, significantly higher than the global average of $300.

Another key finding was that online shopping behavior around the world is remarkably similar. Going global does not necessarily require a unique approach for each market. This finding, in tandem with Asian consumers' healthy appetite for online shopping, makes the region fertile ground for SME e-tailers.

However, there are also hurdles to overcome. The first of these relates to the reputation and trustworthiness of the vendor. Many of the others stem from a bad customer experience particularly related to the shipping process.

The author is president of FedEx Express Asia Pacific.