How online marketplaces are unlocking global trade opportunities for SMEs
SMEs are grappling with so many export challenges today. These include, but aren’t limited to, increased paperwork and red tape, as well as supply chain and logistical issues. Such conditions are making it difficult for businesses to pursue their international growth plans.
A recent study of more than 3,000 UK businesses by Alibaba and the Institute of Export and International Trade underscored the importance and benefits of exporting globally for UK businesses. 81% of respondents said that exporting had made their business stronger, while 80% said it was ‘critical’ to the future of their business. Some 79% said that exporting had relieved the pressure of doing business in the UK.
Yet, despite the positive outlook, many businesses, including SMEs, who export or have exported in the past, perceive challenges that could stand in the way of their export ambitions. Nearly a quarter (22%) cited supply chain and logistical issues as the biggest barrier, followed by increased paperwork and red tape (20%) and competitive pricing (20%).
Digital trade routes, such as online marketplaces, are crucial to breaking down these barriers. Whether they are B2C or B2B marketplaces, they serve as gateways to global expansion, enabling businesses to grow, creating more domestic jobs and contributing towards economic development in the region.
While the pandemic forced many businesses to digitise, it remains crucial that businesses find ways to leverage these tools to accelerate growth.
Once businesses begin to export, they quickly recognise that the advantages outweigh those initial obstacles and inertia, leading to increased confidence.
Some of the key benefits of using online marketplaces include reaching new suppliers worldwide, gaining richer competitor and customer insights, reaching new suppliers worldwide, enhancing supply chains and inventory planning and driving expansion into new markets with minimal overhead costs. Most importantly, for SMEs, online marketplaces boost export sales, navigate disruptions, and streamline export operations.
These benefits are evidenced by our survey findings which found that seven in ten (73%) of businesses are currently using online marketplaces, with three in ten (30%) starting to work with online marketplaces during the pandemic. However, a significant number of UK SMEs are yet to begin selling overseas – nearly a quarter (24%) of those surveyed do not currently export.
There is, therefore, a real risk that SMEs will get left behind when it comes to unlocking the power of digitalisation. This is an area of ongoing concern – not least for the UK economy. The positive impact and contribution that SMEs have on the UK’s prosperity cannot be overstated. SMEs are widely considered to be the backbone of the UK economy, accounting for 99.9% of the business population and around half of the turnover in the UK private sector.
Looking ahead, SMEs need to accelerate their efforts to digitalise to ultimately future-proof their business. Online marketplaces are a powerful tool that can alleviate pressure on smaller businesses, helping them punch above their weight and ultimately boost growth. Such platforms level the playing field for sellers of all sizes, and with varying levels of financial power – and for SMEs taking the first step on their global digital trade journey, they are a particularly valuable asset.