By Percy Hung
As the bustling online shopping season approaches, evaluating past performance and identifying growth opportunities will be crucial for a successful Q4 and beyond. The summer months, often marked by slower sales, present a prime opportunity for business owners to both literally and figuratively take stock and strategically plan for the months ahead.
Here are three areas to consider:
1. Inventory Management: The Backbone of E-Commerce
Effective inventory management remains a persistent hurdle for e-commerce businesses. Tracking stock across multiple warehouses, including marketplaces like Shopee, Lazada and Amazon and avoiding overstocking or overselling can be complex, especially for growing businesses.
Real-time data analytics are essential for maintaining optimal stock levels and reducing customer frustration. Notably, 43% of online shoppers report avoiding businesses due to out-of-stock items, showcasing the importance of reliable inventory systems.
2. Adapting to Shoppers’ Demands
The rise of ‘Buy Now, Pay Later,’ mobile wallets, and evolving digital payments means shoppers now seek more payment flexibility. A recent study in Hong Kong reveals that alternative payments are becoming the preferred method for e-commerce purchases. As Chinese e-commerce platforms gain prominence, solutions like Alipay and WeChat Pay are becoming household names.
Online retailers must adapt to these preferences to remain competitive. It is estimated that 70% of online shopping carts are abandoned before purchases are finalised, and according to a study, 13% say they do so because of the lack of payment options. Simply put, a lack of payment methods leads to a loss of revenue.
3. Financial Solutions for Sustained Growth
Maintaining growth momentum in a competitive market poses financial challenges, particularly for e-commerce owners facing cash flow constraints despite increasing revenues. According to The Xero State of Lending report, 20% of small owners cite access to capital as their primary obstacle to long-term growth. Alarmingly, 22% of these businesses report having no cash reserves with 18% relying on less than a month’s worth of expenses.
Traditional bank loans, though offering substantial capital at low-interest rates, are often out of reach for e-commerce ventures due to stringent collateral requirements and rigid repayment terms, exacerbating financial strain during uncertain times.
Revenue-based financing (RBF) offers a promising alternative, providing upfront capital in exchange for a percentage of future revenues, capped at a predetermined amount. RBF’s flexibility is ideal for businesses with variable incomes, allowing repayments to align with cash flow and easing financial pressures. This approach enables businesses to fund growth initiatives with more adaptable repayment terms compared to traditional loans.
Despite predictions of digital growth, Asia’s in-store retail segment is experiencing a resurgence, reflecting the enduring appeal of physical shopping. Retailers should temper growth expectations and ensure their strategies align with current market conditions. Balancing online and offline initiatives will be key to sustaining momentum.
As consumers prepare their shopping lists for the upcoming season, e-commerce retailers must gear up to meet the surge in demand. Mastering inventory management, adapting to evolving payment methods, and exploring flexible financing options are essential steps for a successful Q4.
To help businesses navigate these challenges and position themselves for success, Choco Up is offering a complimentary growth consultation throughout August. This initiative is designed to provide valuable insights and strategies tailored to your business needs. Find out more and sign up at https://choco-up.com/growyoursales.
Percy Hung is CEO and Co-Founder of Choco-Up
