The state of e-commerce employment this year
E-COMMERCE is one of the hottest industries to work in Southeast Asia today. According to Adweek, 2018 was considered as the ‘year of e-commerce’ due to the huge rise in spending power amongst consumers, increased mobile adoption, and improved logistics across the region.
Resounding a similar sentiment was Google & Temasek, who updated their industry study stating that e-commerce in Southeast Asia (SEA) will be worth US$240 billion by the year 2025.
This upped last year’s predictions by a huge margin at US$40 billion. Key drivers of the massive figures were influenced by the ride-hailing, online media, online travel, and the e-commerce sector.
E-commerce is expected to hold the biggest piece of the pie at 34 percent of the market share and is slated to be worth US$102 billion by the year 2025.
However, among the big challenges noted in the Google & Temasek report said that the internet economy needs more people skilled in e-commerce-specific expertise and needs more than 200,000 people by 2025 to support its exponential growth.
This is exciting news and sets a high standard for players in the industry.
Simultaneously, the upcoming workforce has a huge role to play in the success or failure in the prediction. Hence, iPrice conducted a study on the state of e-commerce employment in Southeast Asia to find out what needs to be done to realize the full potential of e-commerce.
Employers should change their hiring processes
The study revealed that the departments with the highest number of employees were operations and marketing. Following in third and sixth place is the engineering and IT sector.
While the rate of hiring has seen exponential growth in the past quarters, the real challenge comes when employing highly-skilled professionals in functions such as software engineering, digital marketing, data science, and product marketing.
According to a market study, hiring people for these technical roles has been particularly challenging as the rapid growth of e-commerce meant that there was no prior supply for the digital workforce in previous years.
The lack in the talent pool for e-commerce specific expertise is a pressing issue and is something that Google & Temasek believe to be the most critical and unresolved challenge for this sector.
As such, it is common practice for e-commerce companies to recruit foreign talent with extensive experience and knowledge.
However, this might not be the best long-term solution as most expatriates work on short contracts and only a handful of expats intent to stay for more than five years in a developing country.
The ideal solution is to invest in local talents who are more likely to commit in the long-term for their career.
It was only in recent years where local governments and educational institutions in the region have identified the need to groom a technically skilled generation.
Countries such as Malaysia has recently introduced coding into schools and a similar initiative can be seen across the region.
But we might not see the fruition of these initiatives anytime soon. As such, e-commerce employers need to move away from the traditional hiring process to adopt a more effective style in hiring new employees.
ecommerceIQ conducted a survey on the workforce issue in e-commerce and a spokesperson from Facebook Indonesia commented “…sometimes the recruitment process and the interview questions are ridiculous and those are eliminating the great candidates from the recruiter”
One way to mitigate this issue is to hire candidates with great soft skills. Hard skills should be made as the secondary priority.
Companies may be able to teach staff how to use Google Analytics, set up Adwords or time management but it will be hard to teach soft skills such as ownership, conflict resolution, and proactive learning. This will require recruiters to rethink their interview processes and expectations.
Recruiters from the digital sector should be expected to provide on-the-job training as well. While they can hire someone with semi-relevant skills and knowledge, employers should be proactive to provide training to reduce staffs’ incompetency.
The upcoming workforce should be tech literates
Interestingly, while e-commerce businesses are facing a tough challenge in hiring people with technical knowledge, the number of hires remains consistently high.
iPrice compared the top e-commerce platforms in SEA between Q4 2016 and Q3 2018 and saw that the workforce size grew at an average of 808 employees each quarter.
The big number of hires as mainly spurred by investments by investors. Lazada currently has the highest number of staff at a total of 6,659 active employees in Southeast Asia and saw an increase in its workforce in Q3 2017, a few months after Alibaba announced its US$1 billion investment.
Shopee’s recent massive growth in their workforce was fuelled by its expansion initiatives when its parent company SEA (formally known as Garena) raised US$720 million between 2016 and 2018 and garnered an additional US$575 million after listing on the New York Stock Exchange (NYSE) in 2017.
A similar story can be seen at Bukalapak who became Indonesia’s fourth unicorn in January 2018 and grew its workforce as much as 453 percent since Q4 2016.
Nevertheless, the majority workforce was employed for non-tech specific jobs and this remains an important issue. Google & Temasek stated that the internet economy direct jobs will need to grow by 10 percent by 2025. This would be an impossible target if the output of tech literates remains low.
The younger generation must be made aware of this demand and take all opportunity to thrive in the digital sector.
Education institutions and governmental bodies must take up an active role as well in promoting the bright future of e-commerce to woo the new generation.
Despite all the challenges, the internet economy has grown to be such an important industry. It is now up to employers and the upcoming workforce to take up this opportunity to thrive and realize the US$240 billion potential in SEA.
Contributed by iPrice