Kasun Illankoon spoke to Renzo Bravo, Head of Strategy and Marketing for Indian subcontinent, Middle East and Africa (ISMEA), UPS, regarding UPS’s recent SMB survey findings.
UPS announced the findings of a survey which captures current shipping behaviors and trends among small and medium businesses in the UAE and across the GCC.
The survey also demonstrates the current opportunities and challenges within the logistics sector for SMBs amidst the e-commerce landscape, the increasing digitalization and the preferences of customers.
We talked to Renzo Bravo, Head of Strategy and Marketing for Indian subcontinent, Middle East and Africa (ISMEA), UPS to find out what these results mean for SMB’s in the region.
- Tell us what was the purpose of this survey?
When you consider that SMBs now generate over half of the UAE’s gross domestic product, you quickly understand UPS’s goals in gaining insight on how to better serve their growth needs with a smart global logistics network that moves 3% of the world’s GDP daily. UPS commissioned UAE-based SME10X to conduct a survey evaluating the current shipping behaviours among SMBs in the UAE and across the GCC. The survey was conducted to gain deeper insights into the shipping and logistics needs of these businesses given the evolving ecommerce landscape, increase in digitalization, and growing customer demands.
We covered a large sample of more than 5,000 SMBs in the GCC across key sectors including manufacturing, services and trading, and analysed the results based on the participation of 1,153 respondents.
- Based on the results, what were the opportunities and challenges identified?
Our survey reiterates that technology and digital transformation will continue to play a critical role in the future of e-commerce and trade. As SMBs seek more services from their logistics partners to fulfil orders from e-commerce customers, it is apparent that there is an opportunity to tap into this growing marketplace.
Consequently, given their often limited resources compared to larger competitors, small businesses must work smart by using data and technology to understand their customers’ needs, expand their services and select the right partners to meet the requirements of the demanding online shopper.
The results also reflect an opportunity to provide an enhanced customer experience. In the survey, 50% of the SMBs say their customers prefer the option of free returns, giving them the freedom to choose whether they like the product or not. This echoes a global sentiment of online shoppers looking to make purchases from companies that offer value-added services.
- What are the positive e-commerce trends that were identified?
Some key findings from the survey include the expectation from SMBs that their provider offers capabilities such as same-day delivery (69%), a time-definite delivery option (77%) and a digital application to track deliveries in real-time (62%).
This suggests that a majority of small businesses understand that the capabilities of their logistics partners are as important as their own in shaping their e-commerce strategy, and can help them become or remain competitive in the global marketplace.
And, with a growing number of small businesses offering online sales, there is a greater need to work with logistics providers who are able to keep pace with the technological requirements and demands of a fast-changing online world. Companies also increasingly expect their logistics partners to not only offer a variety of shipping options, but also customs brokerage and reliable visibility.
- What is the potential growth for the e-Commerce market here in the GCC and Middle East/Africa region?
The e-commerce market in MENA has the potential to grow 3.5 times by 2022, reaching a total market size of $28.5 billion. Governments in the Middle East have also taken great efforts to support this crucial segment of the market. Dubai, for instance, has set ambitious development goals in the 50 Year Charter including the establishment of the world’s first virtual trade zone targeting 100,000 companies. Such initiatives offer exceptional opportunities for businesses, and especially SMBs, to thrive in the e-commerce market.
With a growing number of full-service providers and technology solutions to facilitate the online journey, it is becoming easier for companies to get started in e-commerce. To enable the further growth of the e-commerce market in the region, businesses must be aware of the changing customer expectations that are driving global e-commerce trends, how they apply to the business, and what can be done to successfully adapt.
- Based on the survey 64% of SMBs currently do not offer online sales: Why is that and do you see that changing in the near future?
SMBs might perceive the world of e-commerce as fragmented and complex, with multiple risks and as yet, undefined rewards, and this uncertainty could explain why an astounding 64% of SMBs surveyed do not currently offer online sales. Additionally, SMBs may feel that they do not have the necessary tools and support to meet increasing customer demands, requiring businesses to fulfil same-day delivery, offer an easy return policy and provide the ability to track deliveries in real-time.
We are confident that SMBs will adapt and incorporate online sales into their business strategy in the near future. This is because in today’s highly competitive market, businesses must meet consumer demand by making products available through an increasingly seamless online and brick-and-mortar retail experience.
The success of small businesses in offering online sales and entering the e-commerce space lies in the strength of their logistics providers. To facilitate the growth of this crucial sector, and enable the adoption of e-commerce on a larger scale, logistics providers must support SMBs with the tools to operate across different online marketplaces, manage and control product returns according to their own customized policies, while offering their customers day definite delivery information and detailed tracking status updates.
- For UPS, what lessons were learned from this survey and how will it help you to improve your services?
At UPS we create tools, technologies, and solutions designed to help SMBs improve their customer experience, enabling them to operate more efficiently and compete in the global marketplace. We are committed to the success of SMBs in the Middle East and are helping them grow and scale their operations to meet customer needs. We help our small business customers improve their customer service and streamline existing business processes so they can focus on what they do best: manufacturing and selling their products. Small businesses are the backbone and the future of the Middle East economy, and UPS will help ensure that it’s a very bright future.
