When consumer
goods retailers look at the numbers, it is easy to see why there
is so much optimism about the emerging consumer markets in Asia.
Within a five-hour
flight radius of Hong Kong, more than two-thirds of the world's
population resides. Experts say this vast consumer market holds
tremendous opportunity and will become the world's greatest trade
bloc as government barriers and logistics problems subside in
the face of electronic commerce.
How then should
online retailers tackle this market?
The wrong
approach, said Simon Hsu, chairman and chief executive officer
of Hong Kong-based E-Commerce Logistics (ECL), is to employ the
English language customer service models popular in the West.
Online retailers,
multi-channel catalogue sellers and Internet plays - especially
leading American brands seeking to reach beyond their borders
- should be sensitive to cultural and language barriers that make
up much of Asia, he said.
To get a better
understanding of the problem, Mr Hsu encourages retailers to imagine
the on-line shopping experience from the point of view of a typical
Asian consumer.
To purchase
popular American brands, Asian consumers have to view a Web site
- typically available only in English - and then endure long shipment
delays and charges that can strip the value out of online buying.
If the consumer has a question about the product, the toll-free
numbers listed on many e-retailer's Web sites simply do not work
when calling out of Asia. Even if the consumer picked up the long
distance charges, most call centre staff do not speak Mandarin,
Korean and Japanese.
Realising
the problem facing most English-language online retailers, Mr
Hsu, a former investment banker, formed a logistics and fulfilment
company which addresses the key transport and communication issues.
At the heart of the company's operations is a 60-seat call centre
which provides support, in a variety of regional languages, to
customers who may have trouble navigating the online ordering
process.
"Our main
target is serving Asian-based customers," Mr Hsu said. "Without
the back end we have, foreign retailers can hardly tap into this
market."
Launched in
March, ECL is a HK$50-million venture between a group of public
and private investors. The company is currently operating at 40
per cent of its capacity of 5,000 packages per day capacity, said
Mr Hsu.
Staff at the
Tsuen Wan-based call centre can walk a customer through the steps
and even answer simple questions about a product's features.
When an order
is placed, the transaction is processed via the online retailers
Web site and by ECL's in-house server.
The request
is then sent to ECL's adjoining 100,000-square-foot warehouse,
where a team of workers pick and pack the order and arrange for
transportation. Deliveries within Hong Kong are made by the company's
own fleet of trucks, while regional orders are sent via express
courier service and guaranteed to arrive within 48 hours.
Although several
so-called e- fulfilment companies provide warehousing and order
packaging services, few have taken the service model to the personalised
level offered by ECL.
Billing itself
as a "turn key" solution provider, ECL appears to be positioning
itself at the mid-point between the logistics and call service
arena. The company is targeting the growing need for an Asian
"back end" that can merge seamlessly with the front end of a US
e-retailer's site.
It is all
part of developing the regional focus that makes customers feel
comfortable when purchasing via the Internet. Mr Hsu, a Taiwan
native who worked in the United States for several years, estimates
that only 10 per cent of Asians region-wide feel comfortable speaking
English.
Despite the
hype surrounding the dotcom craze earlier this year, Mr Hsu reaffirms
his faith in the transformational power of the Internet. In describing
ECL, he cautions the firm is not an Internet company, but rather
a traditional business with one foot in the old economy and an
eye on the future. "I really believe e-commerce is going to be
a new channel of sales and marketing."
Mr Hsu encourages
foreign e-retailers to consider attaching an "Asian click" on
their existing Web sites and making 20 per cent of the company's
best-selling merchandise available for immediate distribution
in Asia. New clients who choose to distribute through ECL must
pay up front for the service, with costs averaging 10 per cent
to 12 per cent of the retail value of items sold.