IN THE era of Covid-19, e-commerce is a certainty, if not an inevitability. The pandemic has certainly driven businesses – especially smaller ones – into digital commerce. Last year, e-commerce platform Lazada recorded a 300% increase in SMEs who onboarded on the platform.
On the other hand, its competitor Shopee said that it has generated about US$242 million (RM1 billion) of sales for the Malaysian economy via partnerships with various ministries, governmental agencies, associations and state governments. They also saw the digitalisation of over 100,000 local micro, small and medium enterprises (MSMEs).
The question, then, isn’t so much why businesses need to embrace e-commerce, but how. What are the key ingredients to driving growth via e-commerce?
For Eddy Han, country general manager of Shopback Malaysia, the answer has changed over the course of the pandemic. Speaking as a panelist in the recent Top in Tech talk titled “E-commerce: Driving Growth via Digital”, Han says that, prior to the pandemic, he would probably say something along the lines of “try everything” and “don’t be afraid to fail.”
“Right now, after the pandemic, everyone is suffering from crunch. I think it’s very important for us to be deliberate with what we want to achieve. We need to be very specific – to go into it with our best efforts and try not the fail.”
This specificity is important, because the e-commerce funnel – as Han says – is no longer about attracting users to purchase items and wait for the delivery. The e-commerce process has, instead, gotten more complicated, with multiple checkpoints that needs to be focused on.
“Whichever lever to push, at every checkpoint, the goal here is to drive a bigger funnel with the highest conversion rate,” Han elaborates.
The end-to-end perspective
Being specific means understanding your business first, something fellow panelist Jane Teh, the managing director of Lalamove Malaysia, says is a key ingredient. For Teh, this means first understanding your audience, and then your product.
From there on, Teh believes that you’ll be able to find the right partner for your business. From the perspective of logistics, she says it’s good for businesses to try out different services before settling – it allows them to figure out their market and customers. “You need to know what’s out there for your market, as consumer behavior differs from business to business.”
For Jason Wong, general manager of Hoolah Malaysia, it all boils down to the end-to-end perspective, and how important it is for that flow – for both the customer and merchant experience – to be frictionless.
“Streamlining and having an automated integrated seamless process will accelerate you, not just putting a website and hoping it will sell by itself. In the end, you want to provide a frictionless experience to the end user.”
There is certainly hesitation when heading into e-commerce, especially when there are concerns about cannibalising one’s own physical business. But there are no fool proof ways to avoid this, though it certainly helps to think beyond cannibalisation concerns and focus on the opportunities e-commerce offers outside one’s location, Han advises.
He observes that successful e-commerce companies which Shopback has worked with tend to look through three top metrics – what type of customers the channel can bring, how they can cross the user to a higher margin category, and how they make sure the customers are repeating their orders.
“To be honest, a lot of times, some companies only think about sales. What’s important is understanding the key actions that drive the proper metrics that will eventually result in sales,” he explains.
Teh says that it’s important for businesses to think about scale when starting their business. For this, business owners need be focused and know their direction. “Down the road in a few years, when your users increased by 10x, will you still be able to use the current infrastructure that you have? If not, how can you move closer to what you need?”
Infrastructure, then, becomes an important aspect to consider when embracing e-commerce. Thankfully, as Han adds, payments services like Hoolah and logistics services like Lalamove have made the infrastructures needed to enable e-commerce much easier and cheaper. Which is good, because – as Wong concludes – finding the right partner is one way to embrace e-commerce efficiently.
“My advice is to look into the right partner. We all have different strengths and leverages that you can adopt in your business,” he says, adding that for business that want to grow, leveraging on the strengths of partners is a much better experience, as their expertise in different areas can ensure a more frictionless flow.
Catch the full webinar here including panellists answering various questions posed by the audience.