Today we spoke to Roland Palmer, General Manager of UK, Benelux and Nordics at Alibaba Group on how online marketplaces fuel resilience and growth for businesses. Roland discussed the challenges currently faced by businesses, including rising costs and reduced revenue, how exporting offers an opportunity for struggling businesses to thrive and achieve sustainable growth, and how digital trade routes, such as online marketplaces, are key to lowering the barriers to export and accelerating business growth:
How are businesses combating the risk of rising costs and reduced revenue as the economy continues to be subdued?
It is no great secret that SMEs are having to grapple with many diverse challenges recently – from supply chain struggles and labour shortages to high inflation and increased red tape.
Disruption in supply chains coupled with rising operations and logistics costs impact SMEs particularly. According to specialist bank Aldermore, 3.3 million (60%) UK SMEs have experienced delays in their supply chains in the last year. On average, SMEs lost £625,000 in income as a result of these delays, equating to £1.9 billion in lost income. The research also shows that one in four SMEs who experienced supply chain delays in the last year have seen a financial impact on their business (27%). The delays have led to increased costs (40%), delays to existing projects (36%) and difficulties in securing new deals (23%).
Against this backdrop, SMEs have been taking stock, reviewing their traditional ways of working, seeking out new and diverse supplier relationships. We are seeing more brands turn to digital sourcing platforms like Alibaba.com as one of the ways to streamline their internal processes, reduce their costs and overcome operational challenges. Online B2B marketplaces such as Alibaba.com allow SMEs to de-risk their supply chain by working with hundreds of suppliers around the world, improving their margins by opting for more cost-effective alternatives.
Can you give examples of how struggling businesses have started to thrive and achieve sustainable growth through exporting?
At Alibaba.com, we are seeing strong demand for exporting from UK businesses – many of whom have seen measurable benefits to their business.
Our recent study of more than 3,000 UK businesses, which we commissioned in partnership with the Institute of Exports, underscored the importance and benefits of exporting globally. 81% of respondents said that exporting had made their business stronger, while 80% said it was ‘critical’ to the future of their business.
Marketplaces, and their ability to connect buyers with sellers globally, are increasingly being seen as a go-to platform for businesses wanting to export. In fact, our survey findings found that seven in ten (73%) businesses are currently using online marketplaces, with three in ten (30%) having started to work with online marketplaces since the pandemic. I was fortunate enough to be one of the judges earlier this year at the Northern Powerhouse Export Awards and it was encouraging to see just how many businesses have seen real growth from exporting. I would encourage businesses considering exporting to reach out and learn from others who are already successfully exporting. There are so many learnings out there that there is no need to reinvent the wheel when a business starts to export.
What are the barriers to export and accelerating business growth and how can digital trade routes, such as online marketplaces assist?
Exporting offers a unique opportunity for SMEs to unlock international growth opportunities. By embracing the power of exporting, these businesses can significantly reduce their vulnerability to a single market, expand their reach to access new customers, and both increase and diversify their revenue streams.
Yet many SMEs still perceive obstacles to their export ambitions. Nearly a quarter (24%) of SMEs surveyed do not currently export goods. Supply chain and logistical issues topped the list of SMEs’ perceived barriers, followed by lack of cultural awareness or familiarity with an overseas market and increased paperwork and red tape.
It’s imperative that businesses – particularly SMEs – receive the support, tools and confidence that they need to take their business global. Fortunately there is plenty of excellent support available to UK SMEs provided by the Department of Business and Trade through their national network of ITA’s (International Trade Advisors) and their UK Export Academy. In addition I would suggest to consider some of the excellent virtual or in person training offered by institutions such as The Institute of Export.
The digitalisation of international trade helps to simplify access to new markets, reduces trade complexity, and presents a vast and exciting opportunity for SMEs to make a significant impact on the global stage. At Alibaba we are pleased to be able to support and facilitate UK SME’s from across a wide range of sectors who are looking to export.
– Roland Palmer, General Manager of UK, Benelux and Nordics, Alibaba Group
