China, India, Mexico and more: A global e-commerce discussion with Raj Subramaniam
In our ongoing Access series exploring the links between connectivity and innovation, we spoke with Raj Subramaniam, executive vice president, marketing and communications, FedEx Services.
ACCESS: What is the relationship between increased global connectivity and innovation?
Raj Subramaniam: We wouldn’t have global connectivity without first having innovation. As we have progressed from connecting by mail, phone and fax to a 24/7 internet, innovation has quickly ignited a new form of trade in global e-commerce. Innovation enhances global digital connections with billions of possibilities. FedEx makes the two- dimensional digital experience a unique reality by connecting the digital and physical worlds. We close that loop at your doorstep.
ACCESS: Once the darlings of the global economy, China and India have struggled in late 2013 under tightening credit. What’s the outlook for each of these rising economic powers?
RS: There are some parts of Asia doing better than others and we remain cautious about Asia and the global economy. The leading regional economies of China and India are settling into a pattern of moderate, more sustainable growth, founded on new opportunities near to home. We’ve seen China remain the fastest-growing economy in Asia, and the Asian Development Bank has forecast India and Vietnam will be the fastest-expanding economies in Asia over the medium term.
ACCESS: Global e-commerce activity grew 21 percent in 2012. Have we reached a new
e-commerce tipping point where it’s now a fundamental economic driver? How does FedEx view the e-commerce boom?
RS: The largest driving force in the global economy is e-commerce, and within the next two years global e-commerce sales are expected to reach $1 trillion. With online sales growing more than three times faster than traditional brick-and-mortar sales, online shopping has revolutionized both retail shopping and the global network delivery industry. To respond to e-commerce consumers, we now offer a host of flexible options allowing for customized delivery of time and location in order to fit individual schedules. The global marketplace is diffuse and mobile now, so e-commerce is not a temporary trend; it’s a force that will drive economic growth in the future.
ACCESS: If an economy like South Korea was the surprise star of the past 10 years, what country do you think might surprise people in the next 10 years?
RS: In 10 years, the markets with the greatest growth will be those with the fewest barriers to trade. For example, take Mexico, which is moving into a more globalized economy as trade now accounts for nearly 65 percent of its GDP — that’s higher than for China, Brazil or the U.S. They also have approved more than 40 free trade agreements with other countries. Another trend for larger supply chain customers is near-sourcing, which increases oversight of manufacturing and minimizes transportation costs. Whoever is the next rising star, in whatever region, it will be a market that has strengthened its infrastructure and eliminated bureaucratic bottlenecks to trade. By 2024, we may all be surprised at the outcome.