Accelerating Small Business Export Growth in E-commerce

Small Business Export Growth, once considered an arena for only large corporations, is now being championed by ambitious startups and medium-sized enterprises alike. This surge in small b has reshaped global trade dynamics dramatically.

Early this year in their annual survey, ICT published that usage in EU households and by individuals reveals a significant rise in online shopping- in line with the global e-commerce trend.

As of 2022, internet usage among those aged 16 to 74 in the EU stands at 91%, with 75% of these individuals engaging in online shopping for personal items. This marks a substantial increase from 55% in 2012 to 75% in 2022, representing a growth of 20 percentage points.

This week we discuss how SMBs are continuing to fuel e-commerce growth globally despite cross-border logistics challenges. We’ll explore how they’re carving out their niche in global trade while overcoming hurdles typically faced in foreign markets through leveraging digital platforms and logistics tools and technologies.

The Rise of Small Business Exports in the E-commerce Era

The impact of small and medium-sized businesses (SMBs) in the global market continues to be remarkable. Recent data indicates that in 2023, SMBs achieved a significant milestone by shipping goods valued at over $550 billion worldwide. This accomplishment underscores the vital role these businesses play in the global economic landscape.

The Shift to E-commerce

E-commerce penetration during Q2 2023 was nearly 50% higher compared to the same period in 2022. The pandemic might have forced our hand initially, but now we're seeing how much potential e-commerce truly has for small business exports.

Significantly impacting e-commerce growth and contributing to online shopping trends this year is the rising use of social media, on platforms such as TikTok. By enhancing brand awareness, increasing sales, and improving customer engagement. TikTok's approach focuses on integrating community word-of-mouth, product discovery, and entertainment, with 71% of users finding it showcases what they're seeking. Instagram, known for its influencer marketing, helps businesses with growth potential to reach a broader audience and boost sales. Both platforms offer unique tools for businesses to engage customers and promote their products effectively. These platforms are increasingly being utilised by SMB’s across the globe.

The New Boom of SMB’s

Faced with rising costs of living, inflation and layoffs, many continue to turn their attention towards entrepreneurship, leading an incredible surge in new businesses registrations - an increase of 83% annually during Q3 of 2023 alone. Many entered into international trade as exporting became easier through online platforms and robust export strategies.

For small and medium-sized businesses (SMBs), venturing into the world of exporting can initially appear challenging. However, the expanding realm of e-commerce presents unprecedented opportunities for growth.

Challenges Faced by SMBs in Cross-Border Logistics

In an ever-evolving market, one constant remains: logistics can be tricky for small shippers. Despite spending an estimated $44 billion on cross-border logistics, many hurdles persist.

A lack of scale often leads to more significant issues when penetrating foreign markets or negotiating trade agreements, with bigger businesses often commanding better rates and services.

This situation forces smaller exporters to become clever strategists. They have no choice but use every tool at their disposal – such as those offered by SeaRates.

Logistics Explorer offers a range of functionalities to support e-commerce shippers in various ways:

Online Quotation and Booking: An app for instant shipping quotes and rate comparisons, featuring an online freight calculator and booking system customizable for specific business needs.

Enhanced Communication and Lead Generation: Automates pricing processes and converts shipping information into business leads. Includes a chat integration for better customer service.

Supply Chain Optimisation: Useful for SMBs working with freight forwarders and logistics providers, offering capabilities for event monitoring, customs preparation, and post-sale support.

Freight Rate Transparency and Carrier Alternatives: Provides transparent freight rates and alternative carrier options, with an easy-to-use freight calculator and direct booking options.

Tracking and Analytics: Features a tracking system for real-time ocean shipment data, supporting over 190 carriers and delivering insights to optimise logistics and enhance customer satisfaction.

Logistics Explorer is a comprehensive tool that assists e-commerce shippers in various aspects, including obtaining instant shipping quotes, optimising communication and sales leads, enhancing supply chain management, and providing detailed tracking and analytics.

The Impact of E-commerce on Retail Sales

Without a doubt, e-commerce has revolutionised the shopping experience. From browsing to buying, online shopping platforms have simplified the process, making shopping an effortless task. According to Digital Commerce 360, e-commerce accounted for a staggering 18.8% of all US retail sales in the first three quarters of 2023.

This shift towards digital shopping channels has led to a significant economic growth and will continue to shape how business owners operate in the future.

The Success of Third-Party Sellers

Third-party sellers are among those reaping big from this trend. Amazon alone saw third-party sales grow faster than its own. In the second quarter of 2023, third-party sellers contributed to 60% of paid units on the marketplace, up from the previous quarter.

In fact, exporting SMEs tend to add jobs up to two times faster compared to non-exporting firms, as per data from Trade Ready. This proves once again that engaging in the international marketplace is beneficial both for individual businesses and the overall national economic output.

Third-party sellers use third-party logistics providers (3PLs) for their expertise in logistics, cost-effectiveness, and to focus on their core business. 3PLs offer scalability, access to advanced technology, risk management, improved customer service, and a wide network. This partnership allows sellers to enhance operational efficiency and market competitiveness, growing small business exports.

Final Thoughts

Small Business Export Growth is not just a trend, it's a revolution. E-commerce has played the leading role in this global transformation.

It's evident that small and medium-sized businesses are no longer merely observers but essential elements in e-commerce. They've embraced challenges and redefined logistics norms to tap into new markets.