By Vidmay Naini, GM, eBay’s global emerging markets
Southeast Asia’s digital economy is poised to exceed US$300 billion in Gross Merchandise Value (GMV) by 2025 and potentially reach US$1 trillion in 2030. Ecommerce is one of the biggest growth drivers – the sector’s GMV is expected to reach US$211 billion by 2025. Singapore’s SMEs are well-positioned to capitalize on this potential to generate new sources of revenue. Many SMEs, supported by government initiatives, are already digitally-ready.
Ecommerce levels the playing field for businesses by granting economic opportunity to sellers regardless of their size. A business can go further and wider without heavy investment or overheads, and oftentimes within the comfort of their home. With ecommerce, businesses can continue reaping the benefits of cross-border trade, growing in sales despite any local or regional economic uncertainties that may arise. Of all the benefits that ecommerce brings, its biggest potential is that it allows SMEs to make a truly global impact and succeed beyond borders.
Reaping the benefits of diverse, global markets
Ecommerce allows SMEs to accelerate business growth through cross-border trade. SMEs have access to a wide range of markets that traditional brick-and-mortar businesses do not, without being limited by in-market economic uncertainties. The potential to reach markets beyond Singapore and the region is immense. A research published by eBay in 2022 found that less than 20% of traditional businesses in six Southeast Asian markets, including Singapore, export.
SMEs selling on eBay, however, served customers in an average of 25 different international markets on an annual basis. These SMEs exporting on eBay have the reach of giant businesses – 86% of Singapore SMEs exported to 10 or more international markets, including valuable consumer markets such as Australia, Canada, Germany, Italy, and the United Kingdom. As a collective, the eBay-enabled small business community in the region made sales in 214 international markets in 2020.
Take SCC Consignments for example. SCC is a Singapore-based business that has seen global success by taking its business online. The sellers’ personal interest in collectible cards led to them wanting to serve a broader community, and they turned to ecommerce platforms like eBay in their search for an online marketplace that supports niche markets. Specializing in consignments and grading services, the company now serves customers across more than 30 countries, with a large pool of its buyers coming from United States (US). Had SCC not decided to venture into cross-border sales in 2020, the company would have stayed limited to selling to a single market. Today, its business has seen a 138% year-on-year growth.
The rise of recommerce in the digital world
As one of the first online marketplace players to create a community for selling previously owned goods, eBay has seen the power of sustainable commerce since 1995. Sellers are increasingly seeing economic opportunity in recommerce, with a growing demand from eco-conscious consumers. 90% of eBay’s buyers across eight markets engaged in recommerce, with more than half of buyers citing financial savings as a reason for participating in the circular economy.
The growing demand for buying secondhand sees the extended life of items saved from being sent to landfills. The recommerce market in the US alone grew to over US$160 billion in 2021 compared to US$140 billion in 2020 and is expected to grow close to US$245 billion by 2025.
Prepare to succeed
Starting ecommerce can pose a few challenges for SMEs, especially with heavy competition and a slew of digital tools to utilize in online marketplaces. 25% of SMEs and mid-sized companies in Singapore consider digitalization and the adoption of digital infrastructure their biggest challenge. Sellers with limited resources could face a steep learning curve in trying to familiarize themselves with technology and marketing. Equipping themselves with ecommerce training will allow businesses to address these challenges as they embark on setting up an online store.
Online resources and courses can better orientate sellers to maximize the functionality of their selling platform of choice and equip them with digital marketing skills. Platforms like eBay equip businesses with this knowledge through a seller centre which offers sellers resources to help them kickstart and optimize their online selling journey.
Sellers can learn best practices like how to craft unique product listings. Approaching ecommerce with a willingness to learn and understand its landscape can set businesses up for success in competing globally online, with opportunities available in diverse consumer markets that are not normally prime export territory for Southeast Asia’s traditional businesses.
In Southeast Asia, ecommerce is not just a consumer phenomenon, but is increasingly becoming a key business strategy, particularly important for SMEs. Being the epicentre for manufacturing of several sectors, the region has the necessary capabilities to scale and meet global demand.
Ecommerce provides a modern channel to access the export economy by reducing barriers to entry, increasing reach and scale at lower cost – allowing small businesses using digital tools to grow faster and new entrepreneurs to easily start their own businesses. This is the window for SMEs to differentiate and bring their businesses to scale by exploring more global markets.
