Biggest e-commerce challenges in Asia for 2023

CommerceCategory
14 min read
Nigel Seah

As the world continues to increasingly rely on digital technology, e-commerce has become an integral part of our daily lives. With that comes new e-commerce challenges to tackle.

As if the growth of e-commerce brought about by the regular digitization of businesses isn’t enough, the COVID-19 pandemic resulted in a paradigm shift in the way we live our lives that sped up this process. 

Lockdowns meant that people could no longer go grocery shopping, work out at the gym, or eat out at restaurants. As such, people turned to online shopping. Growth in E-commerce and delivery businesses accelerated to meet consumer expectations and demands.

Even as the pandemic has started to wind down, Equity Analyst and Managing Director at Morgan Stanley Bryan Nowak stated that the “Covid-driven bump will not flatten future e-commerce growth”. In fact, the financial services firm believes that the e-commerce industry could grow from $3.3 trillion to $5.4 trillion in 2026.

The growth of e-commerce has brought many benefits. However, it has also brought challenges for businesses looking to succeed in this increasingly competitive market. In this article, we will explore some of the biggest challenges in e-commerce that make shopping cart abandonment and shipping costs seem like small issues.

E-commerce challenges: Digital marketing challenges and solutions

1. Establishing an online presence

Southeast Asia’s top e-commerce platforms saw a 64% between 2019 and 2022. It is expected that this number will grow even larger and faster in 2023. This makes establishing an online presence increasingly difficult and one of the biggest e-commerce challenges businesses have to face. 

Which content management system (CMS) is best for e-commerce search engine optimization (SEO) and content marketing? How do you write search-optimized content to reach out to your target audience and grow your organic traffic? How do you even market a brand? Which social media platforms should you use for the marketing strategies you will execute to grow your online business? These are the many marketing questions e-commerce business owners will need to answer.

SEO and social media form the foundation of your digital marketing strategy to help bring in new customers. Don’t neglect it.

If you’re not sure how to start your online store, you can get started with GoDaddy’s e-commerce store builder to build your basic online store. The store builder comes with basic SEO functions to help you optimise the content you upload to your web pages.

2. Tracking e-commerce activity

It comes as no surprise that marketers need to track the performance of all their activities. It helps to justify ad spend and hiring. Familiar with Google Tag Manager (GTM) and Google Analytics (GA)? Then you’re probably familiar with the pain that comes with getting complex tracking tags to work on your site. Tracking e-commerce-specific activity is known as enhanced e-commerce tracking.

 

Not only are there more steps involved, but many CMS still do not completely support enhanced e-commerce tracking. At the time of this article’s publication, many major CMS require a unique code to be crafted to “push” data from the CMS to GA. 

Enhanced E-Commerce tracking is a complex process and is one of the biggest e-commerce challenges. Shopify, for instance, requires a unique code to be crafted to “push” data from the CMS to GA.

You’ll need to hire a web developer to set up the necessary tags to track all your conversion activities. This person will need to have experience in Google tag management.

3. Content duplication

While Google has made it clear that they do not remove your pages from its index unless you’re found to be engaging in spam practices, it can have other ramifications on SEO. For instance, Google may pick the non-target duplicate page as the canonical page and rank it instead. This means that all SEO effort put into optimizing the canonical page would be for naught. 

As an SEO specialist myself, I would personally recommend roping the help of someone who has experience in e-commerce SEO to help audit and manage your site as it grows. The larger the number of pages becomes, the more likely content duplication will occur.

E-commerce challenges: Security challenges and solutions

1. Website cybersecurity

While on the topic of sites, one simply cannot ignore the topic of e-commerce cyber attack prevention. In the third quarter of 2022 alone, about 15 million data records were exposed. This is a whopping 37% more than the earlier quarter. If a well-performing, money-making e-commerce site does not look like a juicy target for hackers, then I don’t know what does. Your customers’ personal and financial details are just sitting ducks if you do not hackproof your site.

[blockquote] Tracking provides you with the data you need to make informed business decisions. You need to get this right. [/blockquote] 

To assess your site’s vulnerability to cyber attacks, you can use sites like securityheaders.com to see if your site has all the necessary security headers to prevent such attacks. The type of web server your site runs on (e.g. Apache, NGINX) affects how your security headers are crafted.

For those of you using Wordpress as your CMS, I’d highly recommend using this security header plugin. It will automatically insert the headers for you. Alternatively, you can reach out to your hosting provider for assistance on this matter. And it is for this reason that we recommend you don’t use free web hosting. They may not have customer support for such technical issues.

If you want further website security support, you can reach out to GoDaddy for its website security services on top of the security headers you are using.

2. Non-repudiation

Non-repudiation refers to the ability to ensure that a party cannot deny having performed a certain action or transaction.

This is a term used in the field of computer science and cryptography. Non-repudiation is often achieved through the use of digital signatures. Such signatures allow a person or entity to sign a document or message in a way that cannot be forged, and through the use of secure cryptographic protocols that ensure the integrity of the signed message

Non-repudiation is an important concept in many fields. In E-Commerce, finance, and legal transactions, it is used to protect against fraud and disputes over the authenticity of transactions. To prevent disputes arising from non-repudiation, we’d advise working closely with reputable delivery companies. Look out for the ones that enforce signatures as a form of acknowledgement when an item is delivered.

3. Customer identity authentication

Customer identity authentication is the process of verifying the identity of an individual attempting to make a purchase or conduct other types of transactions in an online environment. 

This is typically done through the use of username and password combinations, as well as other methods such as security questions or one-time passcodes sent via email or text message

Customer identity authentication aims to prevent unauthorized access or fraudulent activity. Businesses need to ensure that only the person authorized to make a transaction has access to the account or other sensitive information

Customer identity authentication is a challenge in e-commerce for several reasons. First, balancing transaction security with customers' convenience and ease of use can be difficult to achieve. Secure authentication methods may require customers to go through additional steps or provide more information. This can be frustrating or time-consuming.

Another constant E-Commerce challenge is the presence of hackers and other malicious actors. These people are looking to exploit vulnerabilities in the authentication process to gain access to sensitive information or steal funds.

This issue is exacerbated by the widespread use of mobile devices and other internet-connected technologies. These have introduced new challenges and potential vulnerabilities to the authentication process. Hence, it is crucial to ensure that the process of authenticating customers is secure and effective.

To address this, e-commerce site owners can implement the use of multiple authentication methods. Examples include requiring both a password and a one-time passcode sent via email or text message. This can be further bolstered by stronger encryption and other security measures to protect the information being transmitted during the authentication process. 

E-commerce challenges: Logistics challenges and solutions

1. Order tracking

Tracking is the process of monitoring the status of an order. This is done from the time it is placed until it is delivered to the customer.

It involves tracking the order’s movement through the various stages of the fulfilment process. Typically, an order is tracked from warehouse pickup to the time it is shipped to the customer.

Order tracking provides important information to both the customer and the business. These information include estimated time of arrival, any potential delays or issues during the fulfilment process, and successful delivery confirmation. Many e-commerce websites and services offer tracking tools and information to help customers stay up to date on the status of their orders.

Tracking orders can be challenging due to multiple parties involved in the fulfilment process. This includes the e-commerce business, warehouse or fulfilment center, shipping company and the customer. Coordinating and tracking the movement of an order through this complex system can be difficult, especially if there are delays.

Additionally, with the large volume of orders placed and fulfilled in E-Commerce, it is difficult to keep track of individual orders and ensure that they are being handled efficiently. More complexity is added through the use of multiple tracking systems.It is challenging to integrate and manage the information, and to provide customers with a seamless and consistent tracking experience.

To address order tracking issues in e-commerce, businesses use a centralized tracking system that integrates information from all sources. This can help to ensure that everyone has access to the same and up-to-date information.

E-commerce businesses can also invest in technology and automation to improve the accuracy and efficiency of the tracking process. For example, using machine learning algorithms to predict delivery times or detect potential delays can help to improve the overall customer experience

2. Returns management

This includes tasks such as issuing refunds, coordinating product returns to the seller or warehouse, and ensuring that the product is in good condition and can be resold. Managing e-commerce returns is an important part of e-commerce companies as returns can represent a significant cost and can impact the bottom line if they are not handled efficiently. 

I myself can get pretty annoyed when I don’t get my refunds on time. So imagine what online retailers have to deal with if you multiply that by thousands. Poor customer experience will definitely affect a company’s earnings.

Managing e-commerce returns can be challenging. It can cost the business significantly if products are not returned in good condition and cannot be resold. The process itself can be logistically complex. And especially so if products have to be shipped back to the seller or a warehouse. This can require coordination with multiple parties and can be time-consuming and expensive. 

To address some of these, e-commerce businesses can invest in technology and automation to streamline the process and make it more efficient. For example, using machine learning algorithms to predict which products are likely to be returned, or using automated systems to process refunds and coordinate the return of the product, can help to reduce the time and cost associated with managing returns.

Another approach is to provide clear and concise information to customers about the return process, including deadlines or restrictions. This can help reduce confusion and improve the overall experience. Additionally, working closely with logistics partners and other stakeholders in the fulfilment process can help to ensure that returns are handled efficiently and effectively.

3. Shipping errors

Shipping errors are frustrating for customers and lead to negative feedback and a loss of trust in the online retailer. Additionally, shipping errors can be costly for the retailer, who may have to bear the cost of resending the correct items or issuing refunds. This can impact the bottom line and may even lead to financial losses.

Shipping errors are caused by a variety of factors. Some common ones include incorrect or incomplete shipping addresses, errors in the fulfilment process, and problems with the packaging or labelling of the items. They can be caused by factors outside of the retailer's control, such as weather conditions or issues with the shipping company.

There are several steps that online retailers can take to address issues caused by shipping errors in e-commerce. First, it's important to have clear and accurate documents like a return policy, as well as instructions for handling shipping errors. This can include procedures for correcting incorrect or incomplete shipping addresses, as well as policies for resending or refunding orders that are not delivered correctly.

E-commerce business owners can also invest in technology and systems to help prevent shipping errors from occurring in the first place. This can include tools for tracking and managing orders, as well as systems for automating the fulfilment process. 

Of course, how can we forget the need for excellent customer service? This addresses any issues that arise and to maintain customer experience and trust.

Supply chain challenges and solutions

1. Visibility

Supply chain visibility poses a challenge to e-commerce businesses because the supply chain for e-commerce is typically more complex than for traditional brick-and-mortar businesses.

Supply chain visibility remains to be one of the biggest e-commerce challenges.

This is because e-commerce businesses often have to manage multiple channels (such as online and offline), as well as multiple fulfilment methods (such as shipping and in-store pickup). Additionally, e-commerce businesses often rely on a network of third-party partners, such as manufacturers, distributors, and carriers, to fulfil orders.

Furthermore, the high volume of orders that e-commerce businesses handle can make it difficult to track and manage each one individually. This can lead to errors and delays, which can be frustrating for customers and can impact the bottom line. This complexity can make it difficult for businesses to get a complete and accurate view of the supply chain.

To address these issues with supply chain visibility, e-commerce website owners need to leverage product tracking technology and systems like Nabcore that provide heatmaps of products along the supply chain.

Online retailers can also work closely with their partners and suppliers to ensure that they have the necessary information and support to fulfil orders accurately and on time.

2. Flexibility

Supply chain flexibility refers to the ability of a business to adapt and respond to changes in demand, supply, and other factors that can impact the supply chain. This can include the ability to adjust production levels, change suppliers, or alter the distribution network in response to changes in the market or in customer needs.

Flexible supply chains help businesses to be more responsive to changes in markets and to maintain a competitive advantage. It also helps to avoid disruptions or shortages. With that, businesses are able to deliver products and services to their customers in a timely and efficient manner.

And so therein lies the issue. Business hardly ever stays still. Change is the only constant.

As mentioned, the e-commerce supply chain is typically more complex due to the need to manage multiple channels and multiple fulfilment methods. The whole supply chain is then made even more complex by the reliance on a network of third-party stakeholders to fulfil orders. This makes it incredibly difficult for businesses to quickly and easily adapt to changes to factors that can impact the supply chain.

To build a more flexible supply chain, businesses should diversify the stakeholders they engage with, such as suppliers and distributors. This can prevent a disaster from happening if one of them decides to stop working with you.

Freight forwarding companies can help alleviate issues caused by disruptions to supply chain routes. 

E-commerce businesses should also work with freight forwarding companies like Cogent Holdings to circumvent delays caused by unforeseen circumstances such as the COVID-19 pandemic. Many of these companies may already have favorable rates for alternative routes through their longstanding positive relationships with their partners. By partnering with these companies, businesses can take advantage of these existing contracts and relationships to improve their supply chain flexibility.

Are you ready for the biggest e-commerce challenges of Asia in 2023?

And there you have it! These are the top e-commerce challenges of Asia in 2023 and the solutions to them. There’s no doubt that the e-commerce industry is expected to continue growing in 2023, but online retailers need to be mindful of the issues that they will face in the coming year and be adaptable in addressing them.