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Over the past few years, the eCommerce industry has experienced change like never before. The pandemic had many businesses across all industries introducing eCommerce solutions in order to survive. As a result, the global eCommerce market is forecasted to reach $5.55 trillion by the end of 20221. Let’s take a deeper look into the growth of this industry. Online purchases were worth only 17.8%2 of global sales back in 2019; pre-pandemic. Fast forward to today and expectations are set for online purchases to reach a minimum of 21% of global sales by the end of 2022 with retail eCommerce sales worldwide forecasted to reach $7.39 trillion3.
So how can businesses keep up? How can your business ensure it has the resources and support it needs to stay competitive and relevant in today’s online landscape? A solution: eCommerce outsourcing.
In this blog, we will take you through the what, where and why of outsourcing for eCommerce tasks and functions.
What is outsourcing and how can it be applied to eCommerce?
Outsourcing is a smarter resourcing strategy that takes the transactional, time-consuming tasks of a business and sends them to third-party team members - in another location. This can easily be applied to the eCommerce industry as many tasks are repetitive and rule-based, making it an easy transition.
A key issue many eCommerce businesses or businesses looking to go online face is trying to handle everything themselves, in-house. From learning search engine optimisation (SEO) strategies for the first time to managing customer support, many businesses can find themselves overwhelmed by having their “fingers in too many pies”. In the end, this actually becomes counter-productive as each part of the eCommerce team isn’t getting the amount of dedicated attention it requires to be successful.
While it’s important to be across all of your investments and key eCommerce tasks and roles, there comes a point where the concept of ‘delegation’ and ‘trust’ becomes the key to success. In other words, your energy is better spent focusing on areas that require high-level decision-making and leaving the specialised eCommerce tasks to the specialists.
Enter eCommerce outsourcing. Yes, you could employ someone in-house as your SEO specialist or social media specialist, but a benefit of outsourcing is the cost-savings associated with hiring someone at an equal skill level. Hiring an external service provider to handle specific eCommerce functions can become a cost-effective and highly productive way to give your venture the best chance of success. Not to mention the issue of a global skills shortage. By 2030, more than 85 million jobs will remain unfilled as a result of this global talent shortage. That’s around U.S. $8.5 trillion in unrealized annual revenues4. With global unemployment reaching well over the 200 million mark1 thanks to the pandemic, outsourcing can help businesses access quality talent globally, that otherwise may be in short supply locally.
What eCommerce tasks or functions can be outsourced?
There is a multitude of eCommerce services and tasks you can outsource and every business has different requirements. The great thing about outsourcing is that you can tailor it to your business needs.
In saying this, the most commonly outsourced eCommerce services and roles include:
As we said, you can really tailor your resourcing requirements by finding the right outsourcing partner who understands your business. An outsourcing provider that is suitable for one business, may not necessarily be for another. In order for your outsourcing journey to be a success, it’s crucial that your business fully understands how potential outsourcing providers operate and whether they understand and can meet your business needs.
Where can you outsource eCommerce tasks and functions?
Location, location, location. Whether you decide to set up your outsourced team locally or overseas, the great thing about this cost-saving alternative is it is easily accessible to businesses.
Outsourcing providers are located all over the world, so choosing the right provider, with the right employees, to match your business values is crucial. Asking the right questions of your potential third-party offshore provider is the first and best way to know you are on the right track. Covering topics such as operations, holidays and leave, security, HR and recruitment, invoicing and management are just a few key points to touch on before taking the big leap into the outsourcing game.
Why outsource eCommerce services to the Philippines?
The Philippines is one of the fastest-growing economies6 in Southeast Asia with companies all over the world viewing the country to be one of the best global outsourcing locations. In the Philippines, the outsourcing industry is worth $27 billion and is anticipated to grow 6% in 20227, it is also responsible for employing over 1.2 million people8.
Here are 7 reasons why the Philippines is one of the top outsourcing locations in the world:
- Time difference is not an issue: Filipino employees are willing to work shifts even if it means working at night, on holidays, and in different timezones to accommodate clients regardless of where they are located in the world
- English language proficiency: Education First released their 2021 English Proficiency Index (EPI)9 scores for 112 countries around the world, and ranks the Philippines as 592 out of 700. For context, the highest rating country is the Netherlands, garnering a score of 663.
- Highly-skilled talent: The Philippines has excellent universities and a very young population. This means that hundreds of thousands of highly motivated students graduate yearly with college degrees on par with international education standards.
- Excellent work ethic: Filipinos value integrity just as much as they value time and show innate respect for individuals, both in a team environment and outside of work.
- Quality yet cost-effective: Filipinos strive to produce quality work. Simply because Filipino talent is a low-cost alternative for businesses, does not mean quality is jeopardised.
- Strong government support: As one of the economic pillars and main revenue generators of the country, the Philippine government recognises the potential of the outsourcing industry by providing strong support and infrastructure for outsourcing companies and for businesses setting up an outsourced team.
- Cultural compatibility: As a nation that was colonised by various foreign countries in the past, Filipinos were influenced by ethical values, traditions, customs, behaviours and ways of life that are similar to their Western counterparts.
What are the benefits of outsourcing eCommerce services to the Philippines?
Outsourcing eCommerce services can have different benefits for different businesses depending on their individual goals and what they want to achieve through outsourcing. However, the most common and universal benefits realised through eCommerce outsourcing include: reducing costs, increasing efficiencies and sustaining a competitive advantage. Let’s address additional benefits in more detail.
Reducing costs
There is no denying financial benefits play a huge role in motivating companies to outsource and with eCommerce this is no different. Utilising the services of eCommerce outsourcing providers in countries such as the Philippines can result in savings of up to 70% on labour costs, with additional bonuses such as not needing to invest in expensive infrastructure related to setting up staff in-house.
The support needed to scale appropriately
Business growth and scalability are goals for any business, and for eCommerce, growth can be unpredictable and often quick and unexpected - outsourcing can offer the flexibility to scale quickly (up or down) to meet increases or decreases in demand. eCommerce outsourcing providers can help facilitate the recruitment process, which can prove troublesome in times of extensive growth.
A solution to talent shortages
Given the tech-fueled nature of the eCommerce industry, there is huge pressure on online ventures to recruit specialised employees. This can get quite stressful, and expensive, when the local talent pool starts to get smaller. The competition for qualified staff can be intense but outsourcing opens a whole other world of potential recruits ready and waiting to show what they can do.
Keeping up with industry automation
It’s hard to look into the success of many eCommerce businesses and not see some kind of artificial intelligence or automation-driven technology behind it. Through strategic partnerships and their own platforms, outsourcing providers are able to provide technology and software to tackle certain tasks, particularly those that are repetitive, and in turn, free up your time for more high-value activities. Virtual assistants, chatbots and even automated hiring tools are all playing a role in streamlining business processes.
What does the future look like for the eCommerce industry?
The eCommerce market is expected to keep growing as the stats below demonstrate:
- Australia’s eCommerce spending went from $41.2 billion in 2020 to $46.7 billion in 202110: a 13.3% increase.
- Canada saw eCommerce sales hit $64.51 billion in 202111, almost double what was recorded for 2019.
- America’s eCommerce sales went from $763.85 billion in 2020 to $870.8 billion12: a 14.2% increase.
- In the United Kingdom, eCommerce spending was $13.346 billion13 more in 2021 than that in 2020.
In short, there is no expectation for this growth to stop or slow down. eMarketer1 even mentions that the top five eCommerce markets, China, the U.S., the United Kingdom and Japan, haven’t changed since 2018 and will remain the top five through until 2025.
With so much change set to unfold in the next few years, now is the time for businesses to have a solid business plan moving forward. A low-cost alternative such as outsourcing to the Philippines for eCommerce services, tasks and functions may be what sets your business apart from others and gives you a competitive edge in the market.
To learn more about the outsourcing industry, read our “Outsourcing Industry Report” today.
Reference:
1 https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
2 https://www.emarketer.com/content/global-ecommerce-forecast-2021
3 https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
4 https://www.kornferry.com/insights/this-week-in-leadership/talent-crunch-future-of-work
5 https://news.un.org/en/story/2021/06/1093182
6 https://www.philstar.com/business/2021/12/15/2147992/faster-economic-growth-seen-philippines-until-2022
7 https://www.matchboard.com.au/philippines-outsourcing-the-state-of-play/
8 https://www.entrepreneur.com/article/327758
9 https://www.ef.com/wwen/epi/
10 https://www.cmo.com.au/article/692518/report-australian-ecommerce-hits-record-breaking-heights/#:~:text=The%20latest%20GlobalData%20report%20into,(%2460.6bn)%20in%202021.
11 https://www.emarketer.com/content/canada-ecommerce-forecast-2021#:~:text=How%20much%20will%20consumers%20in,following%202020's%20whopping%2075.0%25%20growth.
12 https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf
13 https://www.vouchercodes.co.uk/savings-guides/guides-reports/life-after-covid-prospects#online-retailing
14 https://www.emarketer.com/content/top-global-ecommerce-markets
