Retail in Asia

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Technology-enabled commerce presents more opportunities for Asia-Pacific

Technology-enabled commerce is creating more opportunities and helping break down barriers for small business trade in Asia-Pacific.

In a report released recently by eBay entitled "Commerce 3.0: Creating more opportunity in Asia-Pacific," 82 percent of Asia-Pacific eBay sellers sell to buyers outside of their countries while nearly 60 percent sell to five or more foreign countries.

The report noted that the Asia-Pacific region will surpass North America this year to become the world’s No. 1 market for business to consumer e-commerce sales, according to research firm eMarketer.

As small and mid-sized businesses (SMEs) make up approximately 90 percent of businesses and employ up to 60 percent of the regional workforce, eBay said there is a tremendous potential for Asia-Pacific SMEs in the years to come.

Currently, it said worldwide e-commerce sales exceeded USD1 trillion in 2012, a 21 percent over the previous year. It is expected this year that sales will grow another 18 percent to end 2013 at USD1.3 trillion in worldwide sales.

Platforms such as eBay show that exporting can be an important a source of growth and job creation for very small and mid-sized businesses as it is for large businesses.

Technology-enabled commerce, by instantly providing SMEs with global reach, is an area through which SMEs in the region can expand into international markets.

The report noted that in some countries such as Indonesia, SMEs employ around 99 percent of the workforce. These SMEs also contribute significantly to national GDP. In Southeast Asian countries, the contribution of SMEs to GDP ranges from 30 percent to 53 percent.

"International trade has traditionally been an arena for only the largest players. Similarly, most efforts to dismantle trade barriers have focused on large-scale international business. But eBay’s experience is markedly different. from our earliest days, international trade has been one of the most appealing features of our global marketplace. Today, it represents a significant and growing opportunity for small and large merchants alike," said Jay Lee, Managing Director, eBay Asia-Pacific, said.

The study’s findings have applicability far beyond eBay, the report noted. Lower trade barriers online, for example, allow more sellers to reach more international markets.

On eBay, exporting is made easier and also makes cross-border selling equally as simple for small sellers as it is for large sellers. Ninety-four percent of the smallest 10 percent of “commercial sellers” on eBay engage in exporting, not far behind the largest 10 percent (99 percent). Moreover, only 5 percent of commercial sellers are single-country exporters, with a remarkable 81 percent selling to five or more countries.

Another point emphasized by the report is that distance matters for trade in the offline world. However, it is less important for e-commerce or online trade.

The report noted that when distance increases by 1 percent for offline trade, a 1 percent increase in geographic distance reduces trade by  1.4 percent, while it reduces eBay trade by only 0.6 percent.

"Distance, thus, matters 2.33 times more for offline than online  transactions. This suggests that, compared to offline trade, there is more trade among distant countries on eBay," the report said.