PayPal eyes Asian SMBs' e-commerce moves

Citing study it commissioned, PayPal says small and midsize businesses in region are looking at e-commerce to power growth and enter new markets in year ahead.
Written by Vivian Yeo, Contributor

SINGAPORE--More small and midsize businesses in Asia are planning to embark on online sales initiatives over the next 12 months, according to payments provider PayPal.

A recent study it commissioned revealed that 36 percent of SMBs which use the Internet for business are looking to establish an e-commerce site within the next 12 months. In addition, more than two in five (43 percent) of such companies are already engaged in e-commerce activities.

Conducted by Singapore-based Blackbox Research, the study surveyed 1,200 SMBs in India, Malaysia, Singapore and Thailand, of which the majority were established in the last 24 months. Respondents were from companies that had between five and 50 employees.

Mario Shiliashki, PayPal's managing director and general manager for Southeast Asia and India, pointed out that SMBs in the region are feeling the pressure to look for new growth avenues in response to increased competition.

Speaking in an interview with ZDNet Asia, Thursday, he noted that e-commerce presented SMBs in the region with "exponential" growth potential by connecting them with a much larger customer base beyond their home markets. That could drive up revenue from online sales, which currently stands at about one-third the annual turnover of SMBs in the four countries.

"The economic downturn has been a kind of wake-up call for SMBs in finding new growth channels and realizing the power of e-commerce in driving new markets and new customers, and helping them stay ahead of the competition," said Shiliashki.

The powerful tool is not lost on SMBs--over 90 percent of respondents in the survey indicated that e-commerce would be an important driver for growth in the year ahead, he added.

According to Shiliashki, PayPal is poised to be a partner of choice as SMBs in the region jump on the e-commerce bandwagon.

In the survey, respondents had indicated that payment and information security were their top concerns when setting up an e-commerce platform. PayPal, he explained, "alleviates a huge burden" as merchants are not required to view, much less store, any consumer data such as credit card numbers. To that end, the hassle and cost of securing confidential information are removed.

PayPal, he added, also has "one of the lowest" loss rates due to fraud. "We constantly increase the level of support for SMBs--not only in terms of risk management and fraud management, but also in terms of customer support and marketing."

The opening up of PayPal's core platform through the release of application programming interfaces (APIs), said Shiliashki, will enable SMBs not only to incorporate payments into their e-commerce site, but to "innovate on top of that" such as to allow for mobile payments.

In the Asia-Pacific region, PayPal has over 12 million active accounts. Its transaction volume in the region last year saw a year-on-year jump of 56 percent to US$4 billion.

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