Why empowering ecommerce businesses is key to boosting global trade

Jeff Parker, CEO of international payments service provider WorldFirst, discusses how the UK’s ecommerce landscape has presented new and cost-effective ways for small and medium-sized businesses to grow internationally and embrace global trade.

Empowering small businesses and online sellers is key to reinvigorating global trade

As the world moves on from the pandemic, business and political leaders are looking to revive economic growth and cross-border trade. The UK recently announced a new strategy to increase British exports to £1 trillion. This presents a golden opportunity to empower small and medium-sized businesses and use fast-growing ecommerce channels to achieve this target.

Companies with 250+ employees made up around 1% of all businesses while small and medium-sized businesses account for 99%. However, research shows that businesses with a higher headcount were more likely to be ‘active’ exporters than those with a lower headcount, with cost, access to contacts, customers and networks seen as strong barriers to exporting.

Smaller businesses are disproportionally affected as they have fewer resources and capabilities. To help these companies take advantage of global growth and export opportunities, we must level the playing field and create an environment that allows them to thrive. Here are three ways this can be achieved.

1) Embed ecommerce entrepreneurship into the UK’s DNA

Nearly a quarter (23%) of the UK’s retail sales take place online, totalling $131 billion. This makes it the third-largest ecommerce market in the world behind the US and China.

Thanks to the availability of ecommerce marketplaces, it’s easy for small, domestically focused businesses to expand into new countries and operate on a truly global scale. Platforms such as Amazon, Etsy and eBay are all popular examples of thriving ecommerce marketplaces – Amazon alone receives more than two billion visits each month worldwide.

The continued success and growth of ecommerce relies on greater awareness of these channels and the opportunities they present. This should begin with schools and colleges teaching business and entrepreneurship from an early age.

It is also important to encourage alternative pathways for young adults to learn core business skills, especially if they choose not to attend university. Finally, easily accessible guides and resources for companies already operating and looking to grow creates a “continuous learning” mindset.  

This is not an exhaustive list but should help to set the foundations for embedding ecommerce entrepreneurship into the next generation. In the long term, this will lead to more exports and boost the UK economy.

2) Make the international banking and payments process easy

While the global business landscape has become more digitised and borderless, the same cannot be said for much of the international banking and payment systems catering to small businesses. 

Large businesses, with their ample resources and teams of consultants and advisers, can access a wide range of advanced banking and technology solutions to manage their global finances, payments and tax affairs.  

While there have been improvements made in the quality of service available to small businesses, there is still much more to be done to make the international banking and payments process as easy, accessible, fast, safe and affordable as it should be for small businesses. For example, it is unreasonable to expect a small business in the UK to wait for weeks or months to open a foreign business account in each country it wants to operate in – we hear stories like these often.  

Fortunately, the financial technology (fintech) revolution over the past decade has removed a number of traditional barriers and reduced the cost of accessing and using a high-quality payment and financial services platform online.  

Today, it is common practice to open a business account, open a digital storefront and start collecting funds from customers around the world in multiple currencies within days. Exporting to a customer in China or Australia is as easy as selling to a customer in the next town. This has completely transformed the landscape for small businesses and makes it easier to manage and stay on top of their operations as they expand.  

3) Timely and flexible access to working capital

Small businesses and online sellers are flexible by design. They need access to tools and services that allow them to launch quickly into new countries, buy more stock during peak or seasonal periods of demand, extend payment terms, improve their cash flow management or open new sales channels for growth and expansion. 

Timely access to finance, and day-to-day working capital, is often at the top of a small business’s wish list. But all too often, the traditional routes to accessing finance and business loans have imposed barriers to growth. Ecommerce businesses are often seen as too small or too risky, and delays in receiving their funds after they have been approved mean they miss out on potentially lucrative opportunities.

In the current environment, ecommerce sellers are dealing with higher costs – for shipping, energy, raw materials and more – which are adding pressure to their cash flow. This is amplified even further by supply chain challenges, which are extending the gap between paying for goods you ordered and when you receive them.

Offering rapid access to working capital loans with tailored repayment terms based on monthly revenue, for example, has the potential to be a gamechanger for these businesses. It allows them to operate with greater flexibility and freedom – just like their larger business peers. 

Reducing the export gap between small and large businesses

I’m a big advocate of helping small businesses – they are drivers of creativity, innovation and job creation. If we are to double the UK’s exports to £1 trillion, we need to empower businesses of all sizes to grow; the use of ecommerce channels offers huge potential.

The ‘export gap’ between large and small companies can be tackled by providing more affordable and accessible services. Online marketplaces and modern digital payment and finance companies have transformed the global business and payment landscape in this respect. 

Small businesses can utilise ‘plug-and-play’ solutions that remove traditional barriers and complexities and make it easier to grow their export capabilities. As a result, they have the opportunity to launch quickly into new countries without spending huge sums of money. 

If the UK is to maintain its position as one of the largest ecommerce markets in the world, access to education and business support, flexible working capital and international banking and payment services will be a good place to start.

The post Why empowering ecommerce businesses is key to boosting global trade appeared first on ChannelX - formerly Tamebay.

from Ecommerce Archives - ChannelX - formerly Tamebay https://ift.tt/Ujrm5Nu
via IFTTT