Micro, small, and medium-sized enterprises (MSMEs) in the ASEAN-6 region are set to experience significant growth in their e-commerce exports, thanks to the support of Amazon Global Selling (AGS). A recent report from AGS revealed that the B2C e-commerce export revenue for these enterprises was approximately USD $18.9 billion in 2023, contributing to 38% of the total e-commerce revenue in the region. By 2028, this figure is expected to escalate to USD $30.4 billion, with MSMEs potentially increasing their share to 48%.
This projection illustrates the vital role that e-commerce plays in enabling MSMEs to access international markets. Notably, 90% of surveyed MSMEs in ASEAN-6 indicated that e-commerce is essential for their success in exporting goods. The United States remains a prime target for these businesses, positioning itself as a key market for future growth.
Anand Palit, Head of Southeast Asia for AGS, emphasized the transformative power of e-commerce for MSMEs, stating, “E-commerce unlocks a world of export possibilities for MSMEs and entrepreneurs by offering direct access to a global customer base.” This sentiment reflects a growing recognition among MSMEs of the potential for digital platforms to simplify entry into foreign markets. In fact, new Southeast Asian sellers on Amazon U.S. have surged by 50% in 2024 compared to the previous year, showcasing a significant trend towards American market engagement.
However, the path to success is not without its obstacles. The report highlighted critical challenges, particularly regarding the understanding of foreign export regulations and the high costs associated with logistics. A staggering 90% of MSMEs reported that their knowledge of e-commerce import regulations in destination countries is insufficient, which significantly hampers their ability to export effectively. The U.S. is identified as the primary market where these enterprises seek to enhance their regulatory awareness.
Addressing these challenges is fundamental, and Amazon provides various resources designed to aid MSMEs in overcoming these barriers. For instance, Amazon’s Supply Chain service optimizes inventory placement, facilitating faster delivery times from factories to customers. It allows businesses to reduce overhead costs while increasing efficiency. Fulfilment By Amazon (FBA) enhances this further, offering U.S. customers premium shipping options at rates that are 70% lower per unit than similar services from competitors.
Alisha Tan, the Marketing Director of Galano Furniture, shared her experience utilizing FBA, noting, “Adopting Fulfillment by Amazon has provided us with peace of mind regarding customer service and last-mile delivery. We have seen tremendous growth in 2023 and are excited to expand our presence to Amazon Canada, the UK, and Germany in 2024.” This statement serves as an illustration of how effective logistics management can directly correlate with business growth.
The story is similar for Vietnamese brand Sunhouse. Chief Marketing Officer Le Tung emphasized the critical importance of expanding into international markets. He attributed much of the company’s success to its partnership with Amazon, stating, “With Amazon’s support, we’ve optimized our cost structures, boosted revenue, and set the foundation for our growth over the next three years.” This kind of strategic partnership exemplifies the benefits of engaging with established global platforms.
Philippine-based Argon40 also benefits from its association with Amazon. COO Joseph Zapanta highlighted the advantages of being able to sell directly to U.S. customers without the need to establish a physical presence, stating, “Selling on Amazon allowed us to compete with established brands, giving us visibility and credibility as a startup.”
The report also emphasizes the importance of government-industry partnerships in helping MSMEs navigate foreign markets. Over 90% of respondents agreed that such collaborations could be instrumental in their global expansion efforts. In Singapore, for example, AGS partnered with local agencies, including Enterprise Singapore and the Singapore Business Federation, through the Cross-Border Brand Launchpad Program. This initiative has assisted over 100 local MSMEs, such as Everiday Foods, in reaching international customers.
Similarly, partnerships in Malaysia and Thailand with respective trade promotion agencies are empowering local MSMEs to enhance their e-commerce export capabilities. This collaborative approach not only benefits the businesses involved but also enriches the overall economic landscape of these regions.
As the e-commerce export landscape continues to shift, the growth potential for ASEAN-6 MSMEs backed by Amazon’s comprehensive support system paints an optimistic picture. By harnessing digital tools and resources, MSMEs can navigate the complexities of global markets, streamline operations, and ultimately thrive on an international stage.
To sum up, the future for ASEAN-6 MSMEs is bright, marked by the opportunity for enhanced e-commerce exports and successful international expansion, aided by the strategic support of Amazon. This partnership model serves as a blueprint for how MSMEs can leverage global platforms for sustainable growth.