The Covid-19 pandemic has revealed the alternatives that lie in Singapore’s e-commerce sector. Most retailers have realised that going digital is among the greatest methods to succeed in their buyer base, and have developed an e-commerce technique.
Singapore and the world has seen an e-commerce growth, with shoppers buying all the pieces from groceries to family home equipment on-line. In accordance with Statista, income within the e-commerce market is projected to succeed in US$2,793 million (S$3762.67 million) in 2021.
Moreover, Singapore is among the prime 5 Southeast Asian markets main the cost relating to e-commerce market progress.
Because of the e-commerce growth, it’s cheap for a lot of to imagine that e-commerce sellers are raking in huge bucks however Atsell co-founder and CEO Jacob Chee deems this as a mere false impression.
The Singapore-based firm presents end-to-end companies, consulting, and automation options to corporations that need to supercharge their e-commerce gross sales.
When working in an e-commerce startup previous to beginning Atsell, Jacob witnessed firsthand the challenges sellers face when transiting their companies on-line.
For instance, to maneuver their whole catalogue on-line, enterprise house owners have to take skilled product images, create search-optimised listings, deal with enquiries, orders, supply and critiques.
However, the rise of on-line “e-commerce gurus” who preach the misunderstanding that working an e-commerce enterprise is straightforward has solely deepened the misunderstanding.
He went on to start out up e-commerce enabler Atsell, which mainly helps to make a distinction in serving to companies promote higher.
It presently operates in two nations, however plans to broaden to the Philippines this 12 months.
The challenges of working an e-commerce retailer are aplenty
In accordance with Jacob, the revenue margins of many e-commerce sellers in Singapore are squeezed, and plenty of native corporations can solely “simply get by” from e-commerce.
Right here is the breakdown of a few of the charges and prices incurred by e-commerce sellers:
- Platform transaction charges of two to 12 per cent, relying on which platform
- Advertising and marketing charges of 5 per cent of gross sales or extra, relying on sellers’ price range
- Delivery charges of S$1.50 to S$8, relying on weight
- Warehouse charges of S$500 to S$1000
- S$5,000 to S$8,000 for headcount, if there’s a devoted e-commerce workforce
Another intangible prices embody resolving buyer complaints, attending to buyer enquiries across the clock, coping with fraudulent actions, and fulfilling orders seven days per week.
Though Singapore leads the pack relating to e-commerce market progress, the home market is small. Sellers due to this fact have to transcend Singapore’s shores and discover cross-border e-commerce to nations like Malaysia, Indonesia, the Philippines and Vietnam with the intention to really flourish.
Moreover, competitors from abroad sellers is rampant. Globalisation presents comfort and selection for shoppers, nevertheless it additionally hinders the expansion of native sellers who’ve to search out methods to distinguish.
When was the final time you bear in mind the title of the shop or vendor you obtain from on Shopee or Lazada? Hundreds of latest shops are arrange on marketplaces day by day. It’s troublesome to create model differentiation and recall on these platforms.
Jacob Chee, Atsell CEO and co-founder
Therefore, Jacob shared that a few greatest practices that every one sellers ought to perform embody having clear, related product itemizing titles, displaying prime quality photos, and having well-written product descriptions.
He added that performing properly on e-commerce requires a snowball impact — gaining momentum and steady gross sales is extraordinarily vital to doing properly over an prolonged time frame.
Are e-commerce sellers actually thriving?
The e-commerce growth has led to elevated site visitors, on-line footfall, and a larger quantity of gross sales. Particular person sellers thus expertise an increase in income, even when they solely have a small share of the e-commerce pie.
On e-commerce platforms, clients are seller-agnostic and are introduced in by way of the advertising and marketing efforts of the platform, not the sellers themselves. Nonetheless, Jacob tells Vulcan Submit that marketplaces will “at all times favour shoppers over sellers, and it’s evident within the platform insurance policies.”
For instance, platforms interact third-party logistics companions to offer fulfilment to sellers. After sellers hand off their gadgets to 3rd events, they haven’t any management over supply points failed supply, misplaced parcels, or broken items.
In such circumstances, the sellers will likely be left to face the brunt of the shoppers’ complaints, and will face damaging rankings as a consequence of no fault of their very own.
Whereas there’s a evaluation decision system in place, it’s tedious to submit proof and have it resolved. Normally, sellers nonetheless have to soak up the price of broken merchandise and returned gadgets. Whereas
Though platforms have invested closely to detect copyright infringements, it isn’t unusual to see duplicate listings by abroad sellers. In excessive circumstances, there are even whole shops being duplicated.
Lastly, though earnings statements can be found to sellers, they don’t seem to be at all times intuitive. Sellers need to account for platform charges, rebates and costs, and it’s troublesome to determine the revenue margin at occasions, stated Jacob.
This then raises the query: how a lot are e-commerce sellers really incomes?
Usually, e-commerce marketplaces profit sellers with lean operations. Smaller retailers even have the power to function extra flexibly throughout the marketplaces pointers, particularly in areas like delivery and returns.
However, it’s evident that though e-commerce has boomed enormously up to now 12 months, particular person sellers nonetheless face an entire host of challenges, and the spike in e-commerce gross sales might not essentially translate to income for retailers.
Featured Picture Credit score: SBR