eBay shipping service to boost US-Singapore trade

SINGAPORE--eBay has unveiled a new shipping service, launched in collaboration with Singapore Post (SingPost) and the United States Postal Service (USPS), with the aim to improve the delivery and tracking of lightweight goods plying between Singapore and the United States.

The new ePac offering is the business-to-commerce (B2C) e-commerce site's first postal service partnership in Southeast Asia, and the third globally. It was introduced to further boost the e-commerce giant's fastest-growing segment, cross-border trade, according to Jason Lee, head of eBay marketplaces division for Southeast Asia and Middle East.

He pointed out that its first cross-border shipping service, ePacket, was launched in September 2010 in mainland China in partnership with China Post and USPS. This was followed by e-Express, which was launched in Hong Kong alongside Hong Kong Post and USPS in April last year.

ePac, like its predecessors, consists of two components: the physical delivery of lightweight goods not exceeding 2 kilograms between postal services in the two countries, and an online shipping tool from eBay that links the backend systems of all three parties. Together, it reduces shipping time from Singapore to the U.S. to between six and eight days, and allows buyers and sellers to track shipments 24 by 7 with greater ease and visibility, Lee told ZDNet Asia.

ePac charges a fixed rate of S$2.20 (US$1.70) per shipment, not exceeding 2 kilograms. The first 20 grams costs S$1.10 (US$0.85), and every 10 grams thereafter  costs S$0.35 (US$0.27). While ePac is essentially a service targeting sellers, he said there are benefits for both merchants and buyers.

Lee explained that shipping time and costs are the two biggest barriers that prevent users from shopping online or buying more.

"eBay has always encouraged sellers to offer free shipping to encourage more purchases from buyers. [Since] sellers bear the shipping costs, ePac is a faster, more convenient and affordable solution for them, and more buyers will also commit to purchases," he said. "Buyers will also have better peace of mind [from being able to track shipments themselves]."

Prior to ePac, sellers would have to rely on traditional methods such as airmail, and shipping could take as long as three weeks, he added. There was also little visibility as tracking codes had to be sourced from external parties such as the delivery service, and there would be a lot of back-and-forth e-mail between buyers and sellers, he pointed out.

The ePac online shipping tool generates its own tracking code, so a buyer in the U.S. can easily trace the shipment at any point in time, Lee said. He added that ePac was designed to cater not only to small merchants, but also to businesses and entrepreneurs of all sizes.

Asia-Pacific main driver of exports
Asked about the projected uptake for ePac, Lee expressed optimism, adding that since ePacket's launch in China two years ago, some 90,000 parcels currently ship out of the mainland to the U.S. on a daily basis.

He noted that eBay launched its first cross-border shipping service in China because the country was the biggest exporter, by volume, to the United States and Europe. The Hong Kong service was launched due to its proximity to China, he added.

The combined cross-border trade volume on eBay from China and Hong Kong totaled US$4 billion in 2010, he said.

Within Southeast Asia, Singapore is a "close second" after Thailand which is the region's top exporter, Lee said, but declined to give exact figures. Noting that export volume was not the only reason why Singapore was chosen ahead of Thailand, he said the readiness of all three parties' IT infrastructures was also a major factor.

"The launch [timing] is determined by how ready all three parties are [because] the service requires a lot of backend IT integration," he said, adding that another Southeast Asian country is scheduled to have its own cross-border shipping service launched within this year. He declined to reveal which market this would be.

While domestic transactions still make up the bulk of eBay's sales, cross-border trading remains the fastest-growing segment. In 2010, cross-border trade made up 20 percent of the total US$61.7 billion worth of goods sold on eBay, Lee pointed out. "Five or six years ago, that percentage was in single digit."

In addition, eBay predicts that cross-border trade between Asia-Pacific and the U.S. will "grow aggressively" in the near future, he said.

The U.S. alone accounts for 55 percent of sales from Asia-based exporters, although he pointed out that similar shipping services for additional countries will be implemented in the future.