E-commerce: birthing new opportunities abroad

Photo courtesy of NatureBond

NatureBond is a company founded by Singaporean parents offering baby and maternity products to its customers. Inspired by their experiences becoming new parents, the company’s founders, Jeffrey Chua and Xu Qiuling took a keen interest in baby products and have set their sights on building a global baby brand.

For this SME, expanding overseas meant they could overcome Singapore’s limitations as a relatively small market for baby products. However, it presents new challenges in bringing their operations across borders. Jeffrey Chua, Co-Founder of NatureBond, discusses his company’s founding and their global outlook, and how it has survived the pandemic while establishing itself overseas. Jan Lim, Country Leader, Singapore Marketplace for Amazon, also weighs in with how the current e-commerce boom holds great potential for SMEs like NatureBond willing to adapt and leverage the tools and partnerships available.

Bringing Singaporean care further afield

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NatureBond was founded after its founders became parents for the first time. According to Chua, the name was chosen after being inspired by the natural bond between a parent and their child. Undaunted by Singapore’s reputation as a small market for baby products, the founders decided to go global. “We wanted to create one of the best baby brands in the world, coming from a country of very caring parents,” explains Chua.

Their ambition and passion have brought them accolades such as “Go Global Seller of the Year” at the Amazon Small Business Awards, and a mention as one of The Straits Times’ fastest growing companies in 2022. Their success during these uncertain times comes on the back of their successful e-commerce strategy, facilitated by working with Amazon. “Although the ongoing pandemic has reduced our retail (distributions through brick and mortar) earnings by almost half, Amazon has provided the company strong digital and online channels, along with several tools to scale our sales globally,” explains Chua.

“Over these 2 years, our online sales volume in Amazon has grown at least 15%, which really helped stabilize our business and earnings to tide through this uncertain period.”

Noting e-commerce’s potential for homegrown SMEs like NatureBond, Lim remarks that “The past two years of safe distancing has led to customers realising that online shopping is not just safer, but also a more convenient option to quickly compare prices and selection. Consumers expect a wide selection to choose from, great prices, and ease of shopping convenience.

“This shift in customer behaviour translates to greater demand and expectations of retailers to have an online presence. Selling online is a new opportunity for local businesses to present their offerings in a different angle.”

Beyond changes in customer behaviour, other global shifts are changing the business environment in favour of SMEs that can leverage e-commerce. Lim explains that “there’s been a lot of talk recently about how supply-chain disruptions will have a major impact on the way customers shop and the long-term repercussions of these shifts on SMEs.

“While different sellers have different ambitions and timelines for their growth, the fact remains that with the uptrend of online shopping expected to continue and cross-border shopping being expected to go mainstream, there are great opportunities for SMEs to grow through e-commerce exports.”  

New obstacles  – with new opportunities beyond

However, success in e-commerce is more than just setting up an online store. Lim cautions that many SMEs may struggle to get their fundamentals right. “This may include overlooking the importance of quality product pictures and crafting a proper product listing,” Lim says

“Others may struggle to keep up with the demands and expectations of the online consumer and face challenges in digitally engaging, retaining, and growing their customer base for the long-run. To succeed online, businesses need to bring in quality products, price them correctly, and ensure safe and timely delivery at the customers’ convenience.”

NatureBond has faced its fair share of obstacles in expanding their operations overseas. According to Chua, three main hurdles presented themselves. The first was differences in time zones leading to meetings potentially at odd timings and after hours, necessitated keeping their materials in orders 24/7.

The second, as Chua explains, was cultural: “As Singaporeans, we tend to do things in a “black and white” manner. This meant that while his company valued proper documentation and recording of decisions, this was not necessarily the case in other places.

The last were issues with tax and shipment. “For an SME starting out, handling overseas taxes and shipping can be quite confusing and time-intensive,” shares Chua. To assist them in meeting these challenges, NatureBond worked with Amazon, leveraging their Fulfilment by Amazon (FBA) service so that their logistics and customer support were handled by Amazon.

“This has been really critical for our growth because it gave us the time and energy to stay focused on improving our products and understanding our consumers’ needs,” says Chua. This strategy has allowed them to move into various markets across the globe including the UK, Japan, Europe Australia and, in 2020, Singapore.

NatureBond experience highlights the possibilities open to SMEs able to successfully leverage the new online developments in retail. Says Lim, “an online sales channel is an opportunity to create room for new consumer experiences and thus, more revenue opportunities.” And while this may seem like a daunting step for many SMEs that work with limited resources, choosing and partnering with established online marketplaces can take some of the load off, giving them access to tools, infrastructure, and reach.

Striking while the iron is hot

Reflecting on NatureBond’s journey, Chua advises SMEs to stay adaptable to the ever-changing environment. “The world is moving towards digital economy and AI automation, which includes e-commerce, digitalisation of logistics and even the rise of metaverse,” he says. “Don’t be afraid to start your own shops across e-commerce platforms as the benefits multiply quickly.”

While change and disruption can sound threatening, Chua encourages keeping an open mind. “SMEs are smaller in size, we have more flexibility to effectively enforce change, as compared to large corporations. Through these changes, SMEs may even discover new business opportunities.”

Indeed, research by Amazon suggests that the future may be rosy for SMEs willing to strike out abroad. Lim notes that “per Amazon’s recently released report “Local sellers, Global consumers: Capturing Singapore’s e-commerce export opportunity, the annual value of B2C e-commerce exports in Singapore (currently growing at 5%) is projected to increase more than two-fold and reach S$3.5 billion in 2026, if more SMEs accelerate the rate at which they use e-commerce to sell beyond shores.

“Local SMEs surveyed also anticipate greater sales growth prospects overseas (35%) than at home (13%), with Asia Pacific countries – Malaysia, China, Australia, Indonesia and Thailand – seen as the top five e-commerce export markets in five years’ time, by 2026.

“All in all, with e-commerce revenues in Singapore expected to grow at an annual rate of 12.1% from 2020 to 2024, and 5.5% in Southeast Asia this year, selling online will need to be a critical component of any business strategy to achieve growth in the long run.

“Sellers need to realize that e-commerce is a long-term investment where they can open doors to customers not just in their home countries, but worldwide,” he concludes.