Opinion | The road to recovery: How e-commerce businesses in the region can gear up to recapture growth
- Customers are the lifeblood of any e-commerce business so any customer relationship challenges must be urgently addressed
- Although the convenience of shopping online has been a boon to many consumers during the pandemic, e-commerce businesses still reported tough challenges
With all the talk about the hit Hong Kong’s high street shops have taken during Covid-19, it is easy to believe that online merchants must have had a bonanza during the pandemic. However, this is not necessarily the case according to our survey: PayPal Hong Kong Merchant Survey: From New Normal to New Growth.
The survey interviewed senior executives of mid to large-cap, Hong Kong-based e-commerce merchants in the physical goods space. While it has been reported that the largest e-commerce “mega-retailers” have had bumper results, we found that the next tier down has faced a number of challenges beneath the surface.
Although the convenience of shopping online has been a boon to many consumers, e-commerce businesses still reported tough challenges, with 64 per cent of those surveyed expressing concern over the sustainability of their business. Among the areas of impact, logistics and supply chains were of paramount concern.
It is not hard to understand why – a delay in logistics and supply chains, for example, cancellation of cargo flights, or a factory temporarily closing down due to local anti-pandemic measures, creates a domino effect of more issues such as rising customer complaints, falling sales and even damage to a company’s reputation. Nearly two-thirds (64 per cent) of the businesses surveyed admitted to experiencing issues with deteriorating customer relationships.
This is not unique to Hong Kong either. A recent study looked at consumer sentiment in Singapore and unsurprisingly, over a third of Singaporean consumers (39 per cent) said they were less than satisfied with their digital commerce experience, citing delivery costs, product prices, and the delivery time as their top three concerns. These impacts have been felt across the sector, with both businesses and consumers having to deal with issues.
The good news is that many businesses feel they are on the road to recovery. Or at least that is what many respondents to our Hong Kong survey think about the economic prospects for the last quarter of the year, with 61 per cent anticipating an end-of-year recovery. To set themselves up for success, businesses are already seeking to improve their online shopping experience and boost their competitiveness.