There may be some points in time when we have never thought about something called “online shopping”, but with the birth of e-commerce and its influence, there is no doubt that these platforms are booming. To think that we can buy and sell endless products and services just with the help of the internet in the comforts of our homes, e-commerce has become a key for an increasing number of businesses. A little history of how e-commerce came about, is closely related to the history of the internet. When online shopping became a thing, Amazon was one of the pioneering sites for the face of e-commerce. Since then, hundreds and thousands of businesses have started to digitalize and sell their products online.
What made e-commerce so important these years?
Even though e-commerce sites have existed for quite some time, what made them so important for businesses – especially in recent years? According to MDEC (Malaysia Digital Economy Corporation), e-commerce sales in Malaysia alone recorded a whopping USD2.4 billion in the year 2017. One of the factors that drove e-commerce from a nice-to-have to a must-have would be the COVID-19 pandemic. With strict lockdown restrictions and “work from home” policies, businesses had to either migrate online or close down for good. However, businesses that already had an online presence had the upper hand as it was not something entirely new to them. Platforms like Shopee and Lazada in Malaysia or South East Asia have become most consumers’ one-stop shopping sites. So if you are planning on starting a business, consider building it online with these benefits that will surely pay off in the long run.
How the MDEC helps in encouraging the rise of e-commerce:
According to MDEC’s CEO Ts Mahadhir Aziz, The Malaysia Digital initiative is aiming to improve e-commerce platforms in Malaysia in the aspects of logistics and marketing. These improvements will be catalysts to help the nation meet the RM1.65 trillion demand in e-commerce sectors by the next 3 years which is proposed in the National E-Commerce Strategy Roadmap (NESR). Besides, Digital Trade can also be realized as MDEC is putting in various efforts to capitalize on business opportunities that are on the journey to digital transformation and have been accelerated due to the COVID-19 pandemic. In recent years, MDEC has also set up e-commerce campaigns that encourage businesses to participate in and drive focus into e-commerce such as Go E-Commerce and DE Dagang.
Benefits of eCommerce
1. Low Cost
One key benefit of e-commerce is that online stores do not require the same costs as physical stores. You are able to save on costs like rental, store furnishing, and utility bills and channel them into different alternatives like marketing. Advertising and marketing campaigns are also inexpensive because they are easy to scale and monitor. You can make use of platforms like social media to share it among friends and family, gaining traction through an online presence. Besides, having an e-commerce store helps you save the cost of hiring an intermediary to manage your business activities, which reduces labor costs.
2. 24/7 Availability
Another benefit of running your business online is the 24-hour availability of your store. As the internet never sleeps, there is no such thing as “closing” the store because the online platform remains open for consumers to browse your products. Although customer service may be unavailable at some hours, your consumers will still get to view your store and make potential purchases at all times. Besides, you can always create customized software for your e-commerce platform with automated replies that will help guide your consumers throughout the shopping experience.
3. Customer Data Insights
Unlike purchasing from a physical store, customers are often required to sign up, register, or fill in their details in the e-commerce platform before being able to purchase a product online. These customer data insights are valuable to your business to be collected, analyzed, and acted upon to cater to a better customer experience. Insights regarding factors such as age and gender can be used to understand your customer’s preferences, trends, or shopping behavior. E-commerce platforms also include customers’ feedback and reviews which can offer you tips and hints on what aspects to improve on your business, or brainstorm a marketing strategy that will increase conversion rate.
4. Increased chance of scalability
Think about having a physical store and how you will scale it up – it might require new space, employees, and maybe even a new building when you’re doing well! However, all of these will take a lot more time, effort, and costs compared to scaling an online store. An online store is much simpler to scale as you focus more on increasing the capacity to cater to the business in a digital way. This may include bumping up your inventory, revamping your e-commerce platform, or expanding the diversity of your marketing strategy to fit more global consumers. So instead of opening a new store in a new location, you can channel the finances and efforts into a stronger marketing campaign.
5. Increased profit margin
Following the low costs of setting up and operating your e-commerce store, your business will potentially show an increased profit margin. Take this as an example: an online store that is open 24/7 has a high chance of making potential sales all around the clock. E-commerce platform functionalities such as a dashboard and a payment gateway allow for quicker and more efficient transactions, without involving much labor cost within the process where you might need a salesperson or a cashier. With increased revenue and low costs, this allows for an increase in the profit margin, proving that having an e-commerce platform can benefit your business in the long run.
6. Broader customer reach
With the existence of online shopping almost any product or service, regardless of where they are manufactured, is at our fingertips. An e-commerce platform can help your business reach customers globally as long as it remains accessible. One thing for sure is that online shopping does not limit your shoppers to their geographical location. Besides, the internet is capable of opening up customers beyond a single niche. You can also utilize various online touchpoints such as social media and blogs to tap into new customers. This will allow your business to gain better online visibility and exposure so that your customer base can grow.
7. Wide range of products
The ability of an e-commerce platform to showcase a wide range of products is almost limitless. Physical stores are usually unable to display too many products all in one place as compared to an online store. With the use of an e-commerce platform, there are many ways to display all your products without having to worry about how big your shelf is or how to place them so they look pleasing. These include displaying according to categories, price range, trending items, and best-sellers. Apart from merely showing how the products look, you can also include product descriptions, sizes, and reviews to help your customers make a better choice. However, it is important not to overwhelm your customers with too much information on one page and implement good designs that will fit your brand identity.
8. Affordable marketing and advertising
One of the best things about having an e-commerce platform is that you don’t have to worry too much about marketing costs. Most e-commerce platforms offer a wide range of tools that can help you optimize your marketing efforts. For instance, the product description function allows you to get creative with describing an item to convince buyers. You can include keywords related to your product to help customers better discover your product link or even attractive images that can grab their attention and interest. Besides, with the booming of social media, such as Instagram and TikTok, it is much easier to market your product through these channels as there are millions of users using them every day. You can do this in various ways such as influencer marketing, live video promotions, and giveaways to get your potential customers excited and not want to miss out on the latest trends.
9. Better chance of virality
As compared to traditional stores, e-commerce stores have the upper hand in potentially going viral amongst a community. Again, with the rise of social media marketing, having an online store will most likely get the online attention that your business needs. All you have to do is set up your platform nicely so it appeals to customers, and spread the word as far as you can starting from your friends, family, and followers. With the help of word of mouth and good reviews online, starting with an e-commerce platform already gives you the possibility to go viral no matter what the rate is.
10. Customer reviews
Did you know that customer reviews hold the secret to the success of your business? Most e-commerce platforms allow customers to voice their feedback and opinions on the product or service sold. The same goes for any business from a restaurant to a software development company. It all comes down to whether you as a business owner can satisfy your customers’ needs in the best possible way. Accepting feedback and taking constructive actions give you direction on how to improve your business and increase customer satisfaction as you target them according to their personas.
What does the future have in store for eCommerce?
One thing that is certain is that e-commerce will continue to boom in the coming years. According to Insider Intelligence, e-commerce sales are to reach USD5 trillion in 2022 and USD6 trillion by 2024 worldwide. It has been evident that merely a physical store is unable to withstand the uncertainties that may come, just like the COVID-19 pandemic. The good news is that it’s never too late to build your very own e-commerce business! Whether you are looking to digitally transform your business or start from scratch, it will be worth it down the road.
Looking to digitalize or build your own e-commerce store? Lizard Global can help you!
Are you looking to digitalize your business or build your own e-commerce store? We’re always open to listening to your ideas and thinking along with you in creating your dream business, online. Whether you’re ready to dive into an online business or just want to get inspired, get a glimpse of what’s in store for you with the great partners that we’ve worked with. Whenever you’re ready for a talk, drop us a line on our website, and let’s get started!