Why Is E-commerce Important for Your Export Business?
Intro to E-commerce
E-commerce refers to the activity of buying and selling products or services on the internet. It is a relatively new, emerging and constantly changing area of business management and information technology. E-commerce draws on comprehensive technologies such as mobile commerce, electronic fund transfer, supply chain management, internet management, online transaction processing, electronic data processing (EDI), inventory management systems, and automated data collection systems.
E-commerce is drastically changing the way we do business. Its most evident change is the ease of starting a business. Today, anyone with access to the internet can start their e-commerce business and sell products from anywhere in the world. By doing so, e-commerce has opened its doors for anyone to sell their product directly to the customer. Since e-commerce allows customers to choose products or services from anywhere in the world, online store owners have the unique opportunity to market a wider spectrum of choices than brick-and-mortar store owners.
After all, without the need for a brick-and-mortar location, e-commerce platforms offer greater flexibility, affordability, and opportunity for many export-oriented businesses. So how exactly is e-commerce important for your export business? This guide is here to help.
Advantages of E-commerce and the Benefits of Selling Online
The Current Economic Situation
As the Sri Lankan economy continued to recover following the COVID-19 shock, the tropical island nation was also hit by its biggest economic crisis leading to recessionary pressures.
The current economic situation in Sri Lanka isn’t looking good for either the country or its citizens. There is a major slowdown in industrial production and manufacturing, and a slump in consumer spending. Some major sectors of the economy such as the tourism industry, exports, fisheries and aquatic resources have been particularly hard hit. Furthermore, Sri Lanka also allowed its currencies to weaken substantially in the face of market pressures, gradually falling into a multifaceted financial and political crisis. Across the country, capital inflows and growth have slowed down relatively sharply. Food and fuel shortages are rampant while unemployment is surging. It is yet to be known whether the situation will be a temporary blip or turn into a full-scale recession.
The crisis has exposed various structural weaknesses which require numerous policy reforms and the strengthening of weak financial systems. It is also important to improve the competitiveness and flexibility of the national economy to support growth.
Problems Faced by Businesses Due to the Situation
The economic crisis has affected all kinds of local and Sri Lanka based international businesses – both small and large. Smaller businesses lack access to financial resources and the marketplace and are less likely to recover easily. As revenues and profits are in constant decline, employers have resorted to cutting back on hiring new employees and freezing hiring entirely.
In addition, manufacturers have stopped buying new equipment to cut costs, stop new product rollouts and improve the bottom line. These key factors have declined the growth of revenue and market share. Expenditures for marketing and advertising have also been reduced. This is due to tightening credit conditions, slower demand, and general fear and uncertainty. These cost-cutting efforts have impacted businesses, both big and small businesses, that provide the goods and services used by prominent manufacturers.
There’s no denying that businesses will continue to be disrupted for the next several years due to the economic crisis. We are officially in a severe economic downturn.
But here’s the thing…
As the inability to access necessities and important services loom over the heads of customers, businesses need to gear up and take the necessary steps to supply amidst the current crisis. They could do this by using these difficult times of economic decline to their advantage. In simple terms, business owners should learn to 'change the winds of the tide in their favour'.
As the recent economic disruption continues to negatively impact businesses across the country, it was noticed that consumers adjusted to the changes by buying everything online. This points out a considerable shift in consumer shopping habits. Put simply, to thrive during any sort of downturn, businesses need to be able to reduce costs and increase profits.
So, what is the best response to this crisis?
In the current context, e-commerce is an alternative strategy for businesses to recover from the unprecedented challenges instigated by the economic crisis. Plus, e-commerce has consistently proven to be a successful export marketing strategy. E-commerce platforms such as ShopOnCloud can play a critical role in economic revival during the current economic downturn.
It allows every business to participate in export opportunities and cater to international audiences. With ShopOnCloud, shop owners can leverage their business to reach customers in multiple countries and ship products without any disruption to ease the burden of shipping products abroad. It’s the perfect tool for businesses seeking to expand into international markets.
Export for Revenue Growth
Benefits of Export
- Creates Jobs in the Market
It's no secret that export growth creates more jobs. Increased exports results in the recruitment of both low-skilled and high-skilled to fill in various positions with greater wages and benefits, including more formal-sector jobs for women. By creating jobs, exports also raise the standards of living. Without imports, a large portion of jobs that exist today would most likely disappear.
Liquidity refers to the ability to convert an asset into cash easily and without losing money against the market price. It is highly crucial to learn how easily a company can pay off its short term liabilities and debts.
Liquidity and exports have an interesting connection with one another. Research suggests that higher exports lead to an abundance of the availability of liquidity in the market.
- Increased Investment
An increase in exports creates revenue for businesses which then increases capital investment via the accelerator effect. Exports are a form of international investment in local talent. This investment from overseas helps stimulate our economy's growth, creates local jobs and drives our modernisation.
How to Start a Cross Border E-commerce Business
Let’s start with the basics. What’s a cross border e-commerce business?
A cross border e-commerce business is a business that sells products or services across a border using e-commerce. In simpler terms, it means buying and selling products from overseas. It’s very different from domestic e-commerce transactions. Much like starting any business, setting up, launching and maintaining cross border businesses of all sorts is more attainable now than ever. However, cross border e-commerce businesses aren’t a new phenomenon. They have been around for quite some time now.
Today, cross-border e-commerce is becoming an essential element in growing and scaling an e-commerce business. Venturing into cross border e-commerce is an exciting prospect. If done right, you stand to not only increase your online sales but also expand your presence across the world. However, if you are planning to set up one for your export business, cross border e-commerce may be the key to unlocking exponential growth that’s unparalleled. First, you need to select the right e-commerce platform. This would perhaps be your most significant decision. Regardless of whether you’re looking for an all-in-one software or an open-source platform, your e-commerce platform will be the base you use to build and develop your online store.
To help you out, we developed a few markers that’ll help you think things through.
- Check whether your e-commerce platform supports higher volumes of traffic as you market it to a larger audience.
- Is it equipped to handle cross border e-commerce-related logistics?
- Shipping -How will you get your products into your customers’ hands? Look for a platform that will enable your products to your target countries directly.
- Does the platform allow you to custom tailor your business for the global market?
- How can you provide outstanding customer service? Does the e-commerce platform you chose facilitates this requirement?
Finding Potential Products and Markets
People all over the world have different tastes and preferences, so you’ll want to make sure that there is demand for your products in your target overseas markets.
You may be surprised to learn that many online businesses don’t do any e-commerce market research before they break into a certain market. Although it could turn out to be well, it could also prove to be costly if it turns out to be incorrect.
Begin by searching for emerging or established markets abroad that fit your products and audience. It reduces the risk of launching your cross border e-commerce business to the wrong international and helps build a lasting brand that is well-loved by global audiences for generations to come. Therefore, always do your research on the potential overseas demand for your products. Reaping global e-commerce success starts with proper research and planning!
Global E-commerce - Points to Ponder
The lines between geographic borders in e-commerce are slowly becoming blurry. Now that customers can have their pick of sellers across the globe, it’s becoming a necessity for brands and online retailers to showcase their products to a global market.
If you are thinking about making e-commerce a bigger part of your export business, you have all the information you need to get your online business up and running in no time. It’s as easy as that.
With ShopOnCloud, we’ve made it even easier. Not only does ShopOnCloud allow you to create and launch your online store, but you can also customise your design, add your domain, manage inventory, take and ship orders, receive payment, and more.
So why wait? Get started with us now. Hop right in!