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News Asean MSMEs ride on e-commerce rise to enter global markets–study

Asean MSMEs ride on e-commerce rise to enter global markets–study



GLOBAL online commerce platform eBay is becoming the most preferred “go-to” marketplace for Filipino micro, small and medium enterprises (MSMEs) and some of their counterparts in Southeast Asia to successfully ply their trades overseas.

More than three-fourths, or 79 percent of its small-scale business users in the Philippines, exported to 10 or more international markets in 2020, while the number of global market destinations for them averaged at 32, based on the results of the “Southeast Asia Small Online Business Trade Report 2022” released by the company last July 14.

Jewelry and watches, cell phones and accessories, sporting goods, collectibles and business, as well as office and industrial items were the top five product categories they shipped abroad.

The e-commerce provider’s popularity and effective usage for local online businesses hold true as well to their peers in Indonesia, Malaysia, Singapore, Thailand, and Vietnam.

Across the six markets in the region, an astounding 68 percent of eBay-enabled small enterprises exported to 10 or more markets abroad and, collectively, they finalized sales in 214 international markets two years ago, per the study.

While the research shows that less than 20 percent or one-fifth of traditional businesses in each of these markets export, all small eBay players in Indonesia, Thailand, and Vietnam are exporters, and more than 95 percent of their contemporaries in Malaysia, the Philippines, and Singapore use this e-commerce channel to reach global consumers.

E-commerce enabler

MSMEs form the backbone of the region’s economy as they account for 89 percent to 99 percent of total registered establishments, and generate between 52 percent and 97 percent of overall employment across all the 10 member-states of Asean. What’s more, they contribute 30 percent to 53 percent to gross domestic product of each Asean member, not to mention their estimated export shares of 10 percent to 30 percent.

In the Philippines alone, MSMEs comprise more than 99 percent of all businesses in the country, over 60 percent of total employment, and more than 20 percent of the nation’s aggregate exports.

Given their pivotal roles in achieving broader economic growth and prosperity, the report underscores how eBay has created a vibrant ecosystem, consisting of payment and shipping solutions, marketing tools, market intelligence and dedicated local teams to help them succeed on the international stage through export opportunities.

The survey results, likewise, indicate that eBay is indeed an enabler for Asean MSMEs to become international retailers already from day one. Its marketplace offers them an extended growth runway that is both diversified and resilient.

“eBay’s primary focus in Southeast Asia (SEA) is to enable SMEs (small and medium enterprises) to sell to the world—its marketplace offers 142 million active buyers across 3,000-plus product categories with market access to 190 countries,” said Vidmay Naini, country manager for Southeast Asia and India at eBay.

For him, the region’s MSME community has a wealth of inventory that consumers worldwide want. This calls for small business players to differentiate themselves among the competition and upscale by exploring e-commerce export options, he noted.

“With this goal in mind, eBay is building a robust ecosystem, with its deep technology expertise and partnerships with key government stakeholders as well as logistics service providers, to enable SMEs to do just that,” shared Naini.

Harnessing Asean’s export potential

TO cater to international markets and globalize their operations, Asean businesses, especially small players, must learn how to navigate complex tax laws, manage sophisticated logistics arrangements, identify customized methods of last-mile delivery, and more importantly, create insights on markets and categories that are dynamically changing.

“eBay is capitalizing on the combined depth of our in-market teams and the global scale of eBay’s marketplace to help SMEs grow their business and meet the increasingly complex demands of global markets and consumers. We are very happy to play an instrumental role in empowering and enabling our Southeast Asian SMEs to expand their international reach—and help SEA SMEs bring the region’s diverse retail offering to the world,” he pointed out.

The potential of Asean as an economic powerhouse is well-recognized the world over on the back of its tech innovations and start-ups from health to fintech to education, according to Cheryl Chung, programme director of Executive Education Singapore Futures at Lee Kuan Yew School of Public Policy.

“However, the potential of retail exports has not been tapped into. That’s why we organized a joint programme entitled ‘Empowering SMEs: E-commerce Exports in Southeast Asia’ to help increase awareness and bring together industry experts and government partners,” she emphasized.

Looking forward, she sees that small enterprises in the region “will become a rising tier of global retailers with broad international market access” in the next 10 years due to the “tremendous advances in e-commerce and the increasing integration of end-to-end solutions, bringing job and economic opportunity to the region.”

The academic institution recently tied up with eBay to offer an executive education program for industry experts and government stakeholders across the region about emerging e-commerce export trends, leveraging insights from such report.

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