By Song Hock Koon, Director E-Commerce, MDEC
Despite global interruptions to supply chains brought about by the Covid-19 pandemic, daily essential and groceries including fresh food and bread nevertheless made it to supermarket shelves. Behind the stocked shelves however, the logistics sector adapted quickly, enhanced or reworked its processes and capabilities to power this crucially important aspect of the economy and lives, despite the significant challenges.
While businesses deemed as essential were able to continue their operations during the Movement Control Order (MCO), many other companies were not so lucky. The MCO has been devastating to most SMEs, many of whom have business models that are still deeply rooted in the brick-and-mortar realm.
‘Digital’ to many Malaysian SMEs is a website, a simple online shop, and some social media marketing. This pandemic, however, has forced many business owners to embrace ‘going digital’ in a very real way. Similarly, logistics players are stepping up to digitalise their operations to better facilitate and serve social sellers in the e-commerce space.
Going digital as economy reopens
In early May 2020, the government relaxed the operational restrictions for most businesses in a bid to allow the economic engine to restart itself.
– Businesses need to understand that using online channels during the MCO was not, ‘just an MCO thing’. –
To make sure that their businesses are prepared for these types of black swan events in the future, SMEs must fundamentally transform themselves using e-commerce. This would include digitally overhauling major business functions such as sales, distribution, operations, marketing, and support. More importantly, embracing e-commerce can be a key competitive advantage as local businesses expand into international markets, enjoy lower barriers to customer acquisition, and unlock the power of big data.
Despite years of being exposed to the benefits of e-commerce, many businesses have yet to adopt e-commerce in a significant way. Most are not aware of what e-commerce entails and the slew of benefits it can bring. While many entrepreneurs know that online means global, they remain wary. They worry about the investment needed and potentially high fees.
The recent e-Dagang Expo (eDX), hosted by the Malaysian Digital Economy Corporation (MDEC), addressed common barriers to long-term digitisation. Drawing a crowd of more than 50,000 SMEs and micro-entrepreneurs, the five-day expo saw them engaged in a series of webinars and panel discussions to kickstart and propel their digitisation journey.
These business owners are now equipped with strategic knowledge on how to select the right digital tools, establish and optimise specialist partnerships such as logistics, that, when combined with the right go-to-market strategy and online marketing capabilities, drive results in the coveted space of customer brand loyalty.
Digitising air cargo for cross-border e-commerce
Logistics powers businesses, consumers, and everyone in between by creating commerce, opening opportunities, and enabling entrepreneurs—evolving in the last 60 days to adapt to the changing environment. For businesses that embark on an e-commerce-led transformation, even as they plan the digital element of their e-commerce strategy, the logistics component is often underestimated and overlooked.
Done properly, logistics can be a competitive advantage by creating a fantastic customer experience and encourage referrals. It can even increase basket size and reduce complaints and returns. On the back end, strong logistics can create operational efficiencies and increase operating margins.
Getting logistics right can increase purchase frequency and create brand stickiness.
During the MCO, companies like Grab, StoreHub, FoodPanda, and Lalamove, moved immediately to enable food and parcel deliveries, striving to solve the lastmile challenge for retailers. These logistics players played an important role during the MCO, but their fulfilment was predominantly on an intracity basis.
Intending to help SMEs expand their geographic reach both for supply and demand, as well as help strengthen their business with operational efficiencies, companies like AirAsia together with its e-commerce platform OURSHOP and logistics arm Teleport, launched a campaign called Save Our Shops (SOS) to help local businesses affected by the MCO. More than 500 merchants successfully registered to the campaign including an organic fresh produce farmer, a soy wax candle maker, and a company that turns roasted crickets into a sustainably sourced superfood.
By leveraging on a massive air cargo network and robust infrastructure, Teleport is an example of how a one-stop platform can handle payments and same-day delivery in Southeast Asia, catapulting businesses to e-commerce success.
Keeping fulfillment at the forefront of the value chain
Regardless of how businesses opt to fulfill their e-commerce orders, brick-and-mortar businesses that are making the move to integrate e-commerce into their value chain should consider certain do’s and don’t’s.
Customers love transparency so merchants should provide as much detail as possible on the price of shipping and make parcel tracking as easy as possible. There should always be a link between inventory management and ordering, to ensure that item availability does not become a negative issue with the customer.
In this day of social media and mobile devices, it is crucial to have as many channels as possible for sales whether it be a website, Instagram or Facebook. For smaller businesses or merchants, it is always wiser to work with a logistics partner that has a robust and regionally scalable infrastructure layer with a simple plug-and-play interface to make onboarding easier.
E-commerce, the way of life in the new normal
It may be tempting for many SMEs to think that once the MCO is fully lifted, life will return to the way things were and they can abandon the e-commerce elements that they may have adopted. This global phenomenon has fundamentally changed consumer behaviour and after months of getting into the habit of shopping online, more and more consumers will eventually choose the businesses that can continue to offer an e-commerce option.
E-commerce adoption for SMEs is a strategic game-changer and the next evolution of business. Multi-stakeholder collaboration between the government, public and private sectors, industry leaders, and e-commerce partners are unlocking inclusive growth opportunities—and MDEC’s Go-eCommerce programmes are kickstarting the digitisation journey for Malaysian SMEs.
For post-eDX initiatives, access to recorded webinars, digitisation success stories and to stay plugged into various business growth programmes, visit www.goecommerce.my for more information.