New research commissioned by FedEx Express, one of the world's largest express transportation companies, shows that Australian 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.
73% of SMEs surveyed believed that their customers are more interested in receiving their goods as quickly as possible than in sustainable shopping. A similar number, 72% believed that receiving goods as cheaply as possible is more important to customers. However, the insights from consumers show the reality is very different.
The What’s Next in E-Commerce survey polled SMEs and consumers in Australia and 10 markets in the Asia Pacific, Middle East and Africa region (AMEA) in July 2022 to explore the continuing evolution of e-commerce in the region and identify the trends that could fuel their future growth.
Consumers want both sustainability and speed
The accelerated growth of e-commerce during the COVID pandemic occurred as consumer concerns over the environment continue to grow. For a significant number of consumers, the future of the planet is very much top of mind, and they don’t want to compromise – they want both sustainability and speedy delivery. In Australia, 60% of those surveyed expressed as much interest in receiving their goods quickly as they did in the sustainability of the online shopping process.
The research shows that 7 out of 10 consumers in Australia say that SMEs that deliver sustainably are likely to get more of their business. Nearly 6 out of 10 consumers are more likely to buy from a company that have an Environmental, Social, and Governance (ESG) policy- but only 26% of SMEs actually have one. SMEs acknowledge that consumers expect them to run sustainable businesses, but many (71%) 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.”
“Australian consumers are willing to pay extra for sustainable products, and SMEs need to adapt to this shifting consumer preference and align with relevant actions that compliment,” said Peter Langley, senior vice president of FedEx Express Australasia. “Businesses stepping up to adopt sustainable supply chain practices will not only drive growth in their e-commerce businesses but also pique their consumer interest. FedEx Express is assisting SMEs in this space by offering efficient delivery solutions coupled with our focus on environmental commitments and initiatives.”
Across its global business lines, 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 in manufacturing in their supply chains. As connectors in the chain, transportation and logistics providers have a role to play in ensuring their services have the lowest possible impact on the planet to help align to consumer expectations.
About the What’s Next in E-Commerce Survey
The online survey was conducted by Harris Interactive in July 2022 across 11 markets including Australia, Hong Kong, India, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. 300 small and medium businesses with less than 250 employees engaged in e-commerce were polled in each market alongside 500 consumers (1,000 in India) over the age of 18. To access the full report, click here.