New research commissioned by FedEx Express, one of the world’s largest express transportation companies, shows that small- and medium-enterprises (SMEs) that embraced e-commerce during the COVID pandemic are underestimating the importance consumers now place on sustainability in their purchase decision-making.
90% of SMEs surveyed in the Philippines said their customers are more interested in receiving their goods as quickly as possible than in sustainable shopping. While 85%, thought that receiving goods as cheaply as possible is more important to customers. The research shows that the reality is different.
While the majority of consumers agree that delivery speed matters, they also value sustainability as an important consideration. According to the same survey results, 90% of Filipino consumers expect sustainable e-commerce from companies they buy from. Concurrently, SMEs with ESG policy in place is a clear differentiator in e-commerce with 4 in 10 consumers indicating it as an important purchasing factor.
“As more Filipino businesses begin to expand their footprint to the global market, FedEx continues to innovate and offer sustainable logistics solutions and technologies to empower their growth while minimizing their ecological impact. Sustainability is everybody’s business and FedEx is leveraging its worldwide network to make positive change wherever we go,” said Maribeth Espinosa, acting managing director at FedEx Express Philippines.
The What’s Next in E-Commerce survey polled SMEs and consumers in 11 markets in the Asia Pacific, Middle East, and Africa region (AMEA) in July 2022. The poll explored the continuing evolution of e-commerce in the region and identified trends that could fuel their future growth.
Key Finding: Consumers want both sustainability and speed
The accelerated growth of e-commerce during the COVID-19 pandemic occurred as consumer concerns over the environment continued to grow. For a significant number of consumers, the future of the planet is top of mind, and they do not want to compromise – they want both sustainability and speedy delivery. Across the region, 67% of those surveyed expressed as much interest in receiving their goods quickly as they did in the sustainability of the online shopping process.
Consumers in Vietnam, Thailand, and South Korea placed the greatest priority on sustainability over delivery speed. Conversely, consumers in Taiwan, Hong Kong, and Malaysia are more likely to focus on delivery lead time.
The research shows that eight out of 10 consumers in AMEA expect the e-commerce companies they buy from to pursue sustainable business models. Seven out of 10 prefer to buy from companies with an effective environmental, social and governance (ESG) strategy in place – but only 29% of SMEs actually have one. SMEs acknowledge that consumers expect them to run sustainable businesses, but many (68%) either fear the associated costs or are unconvinced that any investment in this area will produce a return.
Taking a more sustainable approach to delivery
“Sustainability is no longer an optional extra for SMEs interested in expanding their e-commerce businesses. Consumers increasingly see it as an essential and non-negotiable part of their decision-making process,” said Kawal Preet, president of Asia Pacific, Middle East & Africa (AMEA) at FedEx Express. “SMEs can make an immediate difference by thinking about the logistics connecting their supply chain all the way to the end-consumer. At FedEx we’re already taking tangible steps to mitigate the impact of delivery on the planet.”
FedEx is following a multi-track path to reduce carbon emissions in the delivery cycle with a goal of achieving carbon neutral global operations by 2040. This includes investing in electric vehicles for last-mile deliveries, and digital solutions like FedEx Ship Manager® Lite that allows consumers to fill out their shipping information using their mobile device to quickly generate a label supporting our ultimate goal of zero paper air waybills. Additionally, FedEx is implementing solutions like reusable packaging to help reduce waste in the shipping process.
For any SME, creating an effective ESG strategy is the sum of multiple, individual wins. More than 80% of the total greenhouse gas emissions made by a typical consumer-facing enterprise emanate from outside their internal operations, largely coming from manufacturing and elsewhere in their supply chains. As connectors in the chain, logistics providers have a role to play in helping to lower the possible impact on the planet to help align to consumer expectations.