This month, the Office for National Statistics reported that the UK fell into a technical recession in the latter part of 2023.
This recessionary environment will put SMEs under increasing amounts of pressure, as well as triggering interesting opportunities for those organisations who are readier and more equipped.
Jijay Shen, General Manager, Europe, Alibaba.com
Trading internationally is a key way to achieving growth, as it can significantly expand access to more customers and markets, diversity and spread business risk, and provide a platform for innovative ideas and new practices.
The SME export landscape in the UK
According to Alibaba.com’s recent study with the Institute of Export and International Trade, nearly one quarter (24%) of the UK SMEs surveyed do not currently export their goods. One third (33%) of UK SMEs risk losing out on vital export opportunities because of this.
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Almost half are concerned about the challenges of cross-border trade, with the biggest barrier to exporting identified as paperwork and customs rules (22%), followed by increased paperwork and red tape (20%) and competitive pricing (20%).
SMEs, with their limited resources and infrastructure, often find themselves at a disadvantage in these respects compared to their larger counterparts. Economic volatility only adds to the complexity, making it challenging for SMEs to plan for the future.
Despite this, we know that confidence amongst UK businesses that do currently export is high, with 78% saying they expect their export sales to increase in the next 12 months.
Amongst businesses focused on B2B exports only, 81% say they expect their export sales to increase in the next 12 months and 12% expect them to stay the same. Some 79% even said that exporting had relieved the pressure of doing business in the UK.
Top-selling categories across all marketplaces include clothing, underwear, sleepwear and shoes, beauty and health, toys and hobbies, sports and entertainment and phones and telecommunications.
How online B2B marketplaces aid cross-border exports
As an essential part of today’s export landscape, online marketplaces offer a 360 solution for businesses that are looking into connecting with their potential B2B audience internationally.
Broadly, they provide access to a vast network of suppliers and logistics partners, allowing SMEs to achieve global growth. Once businesses begin to export, they quickly recognise that the advantages outweigh those initial obstacles and inertia, leading to increased confidence.
The benefits include new suppliers, richer competitor and customer insights, more robust supply chains and inventory planning, and expansion into new markets with minimal overhead costs. Most importantly, online marketplaces boost export sales, navigate economic disruptions, and streamline export operations.
Digital commerce platforms can also offer advanced technology features aimed to improve the efficiency of processes, operations and communication. Alibaba.com has recently announced the launch of a series of functionalities powered by AI. For example, its Smart Assistant leverages sophisticated modelling techniques to support sellers in trading globally, including smart product listing, chat co-pilot and product insights among others.
In 2024 and beyond, SMEs will certainly face many challenges, but they are by no means insurmountable. With the right online support and digital resources, they can seize opportunities in the global export market. Online marketplaces serve as a 360-degree partner for SMEs, offering a suite of digital tools and services to help them establish and grow their online presence – from virtual storefronts to digital marketing solutions. Ultimately, online marketplaces are catalysts for change, driving globalisation for SMEs through exports and enabling them to thrive in an increasingly interconnected world.
