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Why Small Businesses Need to Get Digital and Go Global

John Caplan

President of North America and Europe, Alibaba.com

Remember the business world before the pandemic? We made face-to-face sales calls, visited suppliers’ factories, and shook hands over signed deals. For business-to-business (or B2B) companies that make and sell products to other companies, hopping a plane to trade shows was the primary way to showcase their wares, meet new customers and suppliers, and find new ideas and innovations to stay ahead of the competition.

Few of those old forms of business became advisable as COVID-19 surged and stay-at-home orders took effect, and business leaders scrambled to find new ways of operating. For Main Street retailers and restaurants, that meant curbside, delivery, and e-commerce offerings. And for the B2B manufacturers, wholesalers, and distributors who aren’t traditionally known as early adopters of digital technologies, they have been getting their business online quickly and finding trading partners globally. These have proven to be lifelines for a growing number of businesses during the pandemic. 

Online marketplace

We all know about the surge of business-to-consumer (B2C) e-commerce and have probably even ordered groceries, clothes, or other personal items while sheltering in place this year. But the B2B companies that rushed online found a huge opportunity in the $23.9 trillion global B2B e-commerce market, which is actually six times larger than B2C e-commerce according to the U.S. International Trade Administration. And they found that B2B e-commerce platforms like Alibaba gave them easy access to trade in bulk with companies domestically and around the globe.

Why? Because, in some ways, e-commerce storefronts are digital versions of showrooms and trade shows — primarily in that they give manufacturers, wholesalers, distributors, and brands that sell or source in bulk a chance to connect with potential customers and suppliers. But they also offer three major advantages.

To start with, e-commerce stores are always on, so sales opportunities extend well beyond the few days a year when there are trade shows. Another is that setting up an online store is far more affordable than having a presence at a trade show, where a display can cost tens of thousands of dollars, in addition to time and travel. And then there is the matter of scalability: there’s no need for overseas warehouses or salespeople when your e-commerce store can reach tens of millions of potential customers across the world. And maybe the greatest advantage is all of this is available right from the comfort of your couch.

Major impact

The impact of small businesses embracing e-commerce is already being proven across all industries. Case in point: The latest Alibaba.com U.S. B2B Small and Medium Business (SMB) Survey of 5,000 B2B companies in late 2019, and again this September, found that before the pandemic, manufacturers were lagging behind all other industries except construction when it came to online trade volume. 

But by September, when nearly all industries were increasing their digital trade amidst the pandemic, manufacturers were digitizing at twice the rate of other industries and surpassing many others. This makes manufacturing one of the industries with the most digital growth amid the global health crisis — an impressive feat.

Worry-free

Fortunately, going digital doesn’t have to be difficult and there are some great resources out there to help in the process, from the U.S. Small Business Association (SBA) to the National Association of Manufacturers (NAM) to local Chambers of Commerce. I’m also proud of Alibaba.com’s Digitization Sprint for U.S. Manufacturers, a new four-week masterclass that is available to qualified, U.S.-based manufacturers at no cost and has been designed by the industry’s leading experts to accelerate the digitization of online marketing, selling, and sourcing to ensure long-term success.

As small businesses are digitizing, many are also globalizing at the same time. According to those same Alibaba.com surveys, cross-border business is increasingly important to small B2B companies, making up an average of 25 percent of their business — a significant boost from 17 percent in December 2019 just before the pandemic. 

And getting digital is helping companies go global. B2B company leaders report that two of the key benefits of e-commerce include helping them access international markets (24 percent), as well as built-in translation services that help them communicate with trading partners in different languages (16 percent).

These are critical advantages at a time when small businesses are being tested like never before. Now is the time for business owners and leaders to integrate e-commerce as a core part of their business in order to shore up against today’s challenges, modernize to stay competitive even in the best of times, and seize a share of the enormous global B2B e-commerce opportunity.


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