E-commerce can work with traditional stores

Running a business via a traditional store poses the same criteria for an online store


THE advent of e-commerce might provide enterprises the right platforms to attract a wider audience and global customers, but retaining the brick and mortar stores is still necessary, especially in Malaysia.

Zoho Corp Pte Ltd VP Gibu Mathew (picture) said it is important to provide customers with both options as benefits from both methods are abound.

“Traditionally, a physical store is what people are used too. The familiarity and being able to touch a product still bears more weight for some. However, e-commerce is definitely transforming the way businesses are done today.

“Digital markets are one of the biggest trends we see and it will keep growing vastly. It is a way to defend businesses and expand as going viral can make all the difference to a company or product,” he told The Malaysian Reserve in a recent interview.

Mathew said running a business via a traditional store poses the same criteria for an online store.

“It is replicated digitally except for being able to touch the product. A business owner still needs to create designs, market the product and file taxes.

“But it is also about having the right business models and strategies to gain momentum regardless of where the product is sold,” he said.

He added that it is interesting to note why some traditional businesses do not go online or want to leverage on the e-commerce world at all.

“Sometimes, owners feel like they may lose control over its brand or its customers. Typically speaking, when a certain product is sold at a marketplace, a person may not remember which store the product came from, instead the marketplace as a whole is mentioned. This way, owners may feel like they have lost association,” he said.

He said this may be particularly difficult for owners who intend on building or creating a brand image for themselves, if it is products that are handmade or unique to a sector.

He said to this end, Zoho has created a software that would enable customers to buy directly from a business while providing the rest of the services like designing, data protection and digital marketing.

However, living in a time of transformation, Mathew said it is vital for businesses to consider both stores to keep up with the trends and fast-paced changing technologies.

“It also depends a lot on the demographics of a country. Depending on the purchasing power, there will be a shift from brick-and-mortar to e-commerce gradually.

“But I don’t think traditional stores will go completely out of fashion one day,” he said.

Meanwhile, Mathew said Malaysia ranks second in terms of growth potential across South-East Asia, after Singapore.

“Malaysia has huge potential, with the right infrastructure and tools, the country has been further pushed in the right direction.

“I believe it will move at a much faster grip than the US in the next five years and by 2040 about 90% to 95% or purchases will be made online,” he said.

Mathew said the government has been facilitating this shift in terms of infrastructure, bandwidth availability and creating an ecosystem.

He said a good example of a curated ecosystem is a German-made car, where everything from designing to manufacturing may work in collaboration to create an end-product which is a German-made car.

“For example, training may be conducted in the manufacturing plant. It explains the high quality and this is where Germany is at right now.

“Similarly, small and medium-sized enterprises (SMEs) in Malaysia can leverage on the country’s name and brand, especially in manufacturing and clothing.”

“If SME can ride on that brand and begin exporting, it can further thrust their own brand into the global arena,” Mathew said, adding that Malaysia has already created a name for itself in various industries worldwide.

He said sectors like digital services, tourism as well as electric and electronics have flourished in the e-commerce sector, while manufacturing and distribution networks should conduct more transactions online.

“Products like timber or furniture still have a very strong presence in traditional methods of purchasing, but can leverage more through the online atmosphere.

“Some of the challenges include the ability to go online and connectivity but for now, it is about empowering retail stores to complement it and go online,” Mathew said.

He added that the last mile connectivity is an important factor, because products need to be shipped to customers.

“All these are factors to be considered because it all plays a part in working together,” he said.