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Anchanto, a Singapore-based automation and logistics platform, projects that cross-border e-commerce in the Asia-Pacific region will grow to US$ 1.5 trillion by 2023. The Southeast Asian market—which has the highest number of young people with Internet access—is expected to account for 40% of this trajectory.
Vaibhav Dabhade, founder and CEO of Anchanto, tells BusinessWorld reporter Patricia B. Mirasol how local micro, small, and medium enterprises or (MSMEs) can compete against established brands in the online marketplace.
“You are one product out of millions,” Mr. Dabhade said. “Unless and until you optimize your catalog, unless and until you create specific marketing campaigns, your chances of getting visible without effort is almost zero.”
TAKEAWAYS
Cross-border sellers have to adopt local payment methods.
Cross-border e-commerce has been here for more than 15 years, with Alibaba being the pioneer. Buyers used to pay for their purchases upfront before Lazada pioneered the cash-on-delivery (COD) model. COD has propelled acceptance of cross-border e-commerce in Southeast Asia.
Marketplaces are creating models to minimize the impact of last-mile delivery costs.
Business has been challenged with the heavy cost of last-mile delivery amid the pandemic. According to Mr. Dabhade, limited flights have tripled the cost of shipping from the UK to Malaysia as of October 2020. To minimize the impact of such costs, companies and marketplaces are delivering products via the postal system, which is slower but cheaper.
MSMEs need structural support.
Mr. Dabhade cited Singapore and South Korea as countries that can be used as models: Singapore provides access to consultants in content, marketing, and pricing while South Korea identifies organizations with global infrastructure that can help MSMEs sell their products overseas.
This level of support is vital because MSMEs get excited about the prospect of e-commerce only to get demotivated after months without sales. “You are one product out of millions,” said Mr. Dabhade. “Unless and until you optimize your catalog, unless and until you create specific marketing campaigns, your chances of getting visible without effort is almost zero.”
Philippine import and export guidelines remain unclear.
“The Philippine market is very similar to India,” Mr. Dabhade said. “Import and export is difficult… cargo is stuck at customs so sellers get despondent.”
The Filipino diaspora is a market just waiting to be tapped.
Wherever there are Filipinos, there are stores selling Philippine-made products. These products can be optimized, but there is no structure for this as of yet, said Mr. Dabhade.
Study the market you’re planning to serve.
Entrepreneurs need to spend time to understand the main commerce restrictions of each country they plan to serve.
Anchanto had a client whose skincare product description included the line: “Tested on Asian skin.” The product, which was shipped to Canada, got stuck in customs because the language was deemed borderline discriminatory. Knowing what’s acceptable and what’s not per region will prevent your products from getting flagged at the outset, said Mr. Dabhade.
Other tips he offered are: choosing a strong payment gateway; and making the fulfillment terms and conditions clear to minimize fraudulent transactions.
Recorded remotely on October 14. Produced by Nina M. Diaz, Paolo L. Lopez, and Sam L. Marcelo.
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