5 things HK e-merchants targeting Europe should know

November 26, 2021 10:43
Photo: Reuters

With the pandemic-induced e-commerce boom leading to a 30% increase in online sales among shoppers in the UK and European Union, the region has clearly adapted quickly to the enforced acceleration towards virtual shopping.

According to the UPS Smart E-commerce Report 2021, the change is likely to be permanent, with 50% more people now saying they intend to continue shopping ‘all or mostly’ online even after things return to the pre-pandemic norm.

While generally finding the online shopping experience more convenient, top motivators driving buyers to make the digital switch also include being able to compare deals and prices more easily, as well as the ease and speed of delivery.

Together with reliability, ease and speed are the magic words for any retailer looking to grow and retain customers. But none of these things are attainable without a healthy supply chain and a seamless delivery experience.

The UK and many EU countries have always been major overseas markets for e-merchants in Hong Kong. To keep making the most of this relationship, businesses need to understand consumers’ priorities and their online shopping expectations in order to stand out in a crowd of global competitors.

The UPS report has revealed what European consumers want from their e-commerce experience and here are five things you should know.

1. European customers value a personalized shopping journey

Forty percent of respondents considered customer service from small, independent or local retailers to be more personalized and better. In Germany, 30% cited personalized experience as a key driver, while in Spain this figure was a higher 47%. Hence, e-commerce merchants, regardless of their business size, should pay more attention to create a customized shopping experience. This can mean learning more about your customers’ preferences, offering more responsive customer service and a transparent delivery and return process to retain their loyalty.

2. Sustainability is a key differentiator, especially among younger customers

Sustainability is an important factor that European consumers take into account when they select an online retailer, with 75% stating that it is ‘very’ or ‘fairly’ important to them that businesses consider the environment and sustainability in their actions, products and services.

Apart from offering eco-friendly products and services, retailers can also consider green packaging and delivery methods, as 50% of the respondents said they like to see environmentally friendly packaging for their purchases. Thirty-two percent said they would look for alternative delivery options such as lockers and collection points that offer greater flexibility to customers so they can pick up packages when and where it is best for them. This in turn helps reduce the number of stops a driver needs to make, which decreases fuel usage, emissions and traffic congestion.

Furthermore, 55% of the 18 to 24-year-old interviewees and 43% of those over 55 said they would like retailers to offset the carbon emissions of their shipments.

3. Free delivery and return are key, particularly to attract the over 55s

Sixty-two percent of respondents aged 55 or older said they want free delivery on all online purchases. Another 85% of all respondents cited that the reliability and trustworthiness of a retailer’s delivery partner is a key factor when choosing who to shop with. Forty-one percent noted that their experience had made them more likely to select a retailer who uses a reputable delivery company.

What’s more, an easy and free return policy will not only improve overall customer experience, but also boost sales and enhance business reputation in the long run. According to a report released by UPS in 2019, more than two-thirds (68%) of shoppers said they look at an e-tailer’s return policy before buying from the site. Almost everyone surveyed (96%) said a straightforward return policy would appeal to them to buy from the same source again. Retailers should clearly and proactively communicate their return policy through prominent links on the homepage of the company website, as such policy terms may influence a shopper’s purchasing decision.

4. Social media matters when building and earning trust

For an increasing number of reasons, social media has become an important way to connect with potential consumers and win long-term loyalty. Fifty-two percent of respondents agree that they are more likely to purchase from a retailer they feel they can trust based on its social media presence.

Nevertheless, businesses need to be mindful of the quality and quantity of messages communicated via social media as 63% of European consumers said that many brands have struggled to differentiate themselves and offer a unique view in their approach to the pandemic. In fact, 60% felt that brands have been over-communicating during the pandemic.

Therefore, whilst brands need to sustain the engagement with their customer base during turbulent times, these findings indicate that the messaging must be executed in an authentic way, such as focusing on people rather than profits, and with the right amount and frequency.

5. Digital natives love buying electronic goods online

According to data from the Hong Kong Trade and Development Council (HKTDC), Hong Kong’s electronic exports increased by 32.8% year-on-year in the first four months of 2021, accounting for about 70% of the city’s total exports. The strong growth is largely a result of both the well-established electronics manufacturing network within the region and strong inter-regional trade. This provides Hong Kong’s cross-border online merchants with a competitive edge as young European digital natives are most likely to head online to buy electrical goods, followed by clothes and footwear.

To capture business opportunities in thriving European markets, e-merchants must understand comprehensively the features and behavior of the market demand.

Consumer behavior and beliefs are changing fast, and knowing and understanding customer needs is at the center of every successful business, whether you are selling directly to individuals or to other businesses.

The data is out there, and now, perhaps more than ever, customers are clearly telling us what they want from the people they choose to do business with. One of the many benefits of online shopping is exactly that: choice. And if you’re not giving them what they want, they’ll find someone else who will.

Choosing the right logistics partner is another important link in the customer value chain, and for businesses that get that right, retaining those customers will be significantly easier.

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Managing Director of UPS Hong Kong and Macau