1. Challenges and
Solutions of
International
Ecommerce
Product Fulfillment
5 October 2011
Kuala Lumpur, Malaysia

2. Today’s Talk…
The Challenges and Solutions for
small, medium or large global
ecommerce business.
Avoid mistakes that companies are
repeatedly do.
Expand internationally
Sell physical products

3. QNet Business
5 million plus subscribed members
shop online with the opportunity to
start their own entrepreneurial
business.
QNet developed a wide-reaching
distribution and logistics systems fully
integrated with advanced, proprietary
ecommerce infrastructure.

4. The Global Ecommerce Challenge
Recent survey:
40% of current Internet companies
turn away international orders
because:
They do not have processes and
systems in place to fulfill the orders
They do not have a solutions for the
challenges they are facing

5. Companies That Accept
International Orders…
Face major challenges in delivering
products globally.
Fulfillment challenges may
cause customer dissatisfaction:
Product returns
Refunds
Customs confiscation

7. Challenges:
1. Global Shipping
2. Duties & Tariffs
3. Product Restrictions
4. Currency Restrictions
5. Returns and Chargebacks
6. Poor Customer Service
7. No Product Service at Destination

8. Global
Shipping

9. The Global Shipping Challenges
Global Shipping – a missing
opportunity.
Lack of supply chain integration.
Weak systems and processes.
High delivery fees for heavy boxes.
Couriers’ weaknesses in some
regions.

10. Duties & Tariffs

12. Duties & Tariffs Challenges
Customers are surprised by
high duties, tariffs and
other fees.
Customers refuse to pay
duties & tariffs.
Customers reject the
products.

13. Consequences
Refunds
Charge backs
Returned products – multiple loss:
Revenue loss
Shipment cost to
country of origin
Reputation loss

14. Product
Restrictions

15. Product Challenges
Asian consumers find sometimes
products they order are confiscated
by customs.
Different countries –
Different health
regulations even in the
same region.

16. Examples
Melatonin is sold over
the counter in
Singapore - Not in
Malaysia.
Xylitol Vs. Stevia

17. It’s Just a DVD….

18. Currency
Restrictions

19. Currency Challenges
Countries limit the amount
consumers can import products.
Limitation on usage of credit cards.
Currency
Exchange
Rate
challenges.

20. Payment Gateway Restricted
Countries
Payment gateways do not operate in
all countries.
Restrictions on currency by Central
Banks.
High fraud countries.

21. Refunds and Chargebacks

22. Returns & Refunds
Cooling-Off Period - gives consumers
the unconditional rights to cancel
contracts in some countries.
Products returns.
Money back (buy back) guarantee.
Consumer protection laws.
Payment gateways merchant’s
name.

23. Chargebacks
A chargeback is the return of funds
to a consumer, forcibly initiated by
the consumer's issuing bank.
It is the reversal of a prior outbound
transfer of funds from a consumer's
credit card.
It happens when consumers do not
approach the seller.

24. Risks
The payment gateway can ban the
business if chargebacks exceed
specific percentage (usually 2%).
What if product had been delivered
before chargeback was received?
Security - losses due to fraudulent
transactions.

25. Poor Customer Service

26. Customer Service
Ecommerce companies tend to
invest in the frontend – ecommerce
& marketing.
Impersonal & uncaring– only online
web forms and emails.
Slow response.
Inability to resolve issues.

27. No Product
Service at
Destination

28. Examples
The risk of drop-shipment.
Generic products from contract
manufacturers.
Counterfeit products.
The Alibaba Story.

29. Up and Coming Challenges…
Income Tax
Marketing & Communication –
language barriers
Security – mobile technology

31. Solutions
1. Courier Integration
2. Delivered Duties Paid (DDP)
3. Foreign Legal Entities
4. Regional Communities
5. Multiple Payment Solutions
6. Ecommerce Integration with ERP
7. Ecommerce Integration with CRM

32. Courier
Integration

33. Solutions
Shopping cart integration
Countries/Weight matrix
Courier Vs. Freight
Customer tracking
AWB Vs POD

34. Digital to Physical
Local
Production
Domestic
Delivery

35. DDP Vs. DDU

36. DDP – Delivered Duty Paid
The online retailer
pays duties and
taxes.
The online retailer
Hassle-free sells goods on an
service all-inclusive price
Provided by all basis.
couriers.

37. Foreign Legal
Entities

38. Why Do Internet Companies
Incorporate Foreign Legal Entities?
Reduce Tariffs
Product registration
Reduce shipping cost
Local service
Local marketing

39. Regional Economic Communities

40. Regional Economic
Communities Provide:
Duty-free trade when goods are
delivered within the community.
Form a hub and deliver to the whole
region (Regionalization).
Deliver bulk freight to the single hub
and distribute at domestic cost.

41. European Union
 27 countries
 Fulfillment Opportunities
 Regional Duty Free
 Single Point of Entry

42. Gulf Cooperation Council (GCC)
Constituting the Arabian Peninsula.
Bahrain, Kuwait, Oman, Qatar, Saudi
Arabia, and United Arab Emirates.

43. The South Asian Association for
Regional Cooperation (SAARC)
Seven founding members:
Bangladesh, Bhutan, India, the
Maldives, Nepal, Pakistan, and Sri
Lanka.

44. The East African Community (EAC)
A regional intergovernmental
organization
Republics of Kenya, Uganda, the
United Republic of Tanzania,
Republic of Rwanda and Republic of
Burundi.

47. Multiple Payment Solutions
Horizontal multiple payment options
Payment Gateways
E-Wallet
Pre-Paid cards
Vertical multiple payment options
Variation – local/global
Rotate payment solution

48. Digital Wallet (e-Wallet).
Electronic Money (e-Cash).
Slow penetration rate.
Advantages:
Better cash flow
Consumers do not need credit cards

50. Ecommerce Integration with
ERP
The backend (supply-chain) is the
engine of the frontend (ecommerce).
Backend failure can kill an online
business.
Supply chain management -
procurement and fulfillment - is
critical.
Integrated WMS is important.

52. Ecommerce Integration with
CRM
Online buyers expect very fast
response to interactions.
Integration of channels like ticket
systems, emails, online forms,
telephone calls and social media.
CRM brings it all together and allows
managers to follow up and monitor
the SLAs.

53. Summary

54. Challenges
1. Global Shipping
2. Duties & Tariffs
3. Product Restrictions
4. Currency Restrictions
5. Returns and Chargebacks
6. Poor Customer Service
7. No Product Service at Destination

55. Solutions
1. Courier Integration
2. Delivered Duties Paid (DDP)
3. Foreign Legal Entities
4. Regional Communities
5. Multiple Payment Solutions
6. Ecommerce Integration with ERP
7. Ecommerce Integration with CRM

56. Go Global
Fulfill Physical
Products

57. Thank You