By Atul Bhakta, CEO, One World Express
In 2018, the value of all goods exported throughout the world amounted to approximately $19.5 trillion – this figure has trebled since the turn of the century.
The COVID-19 pandemic will, of course, deliver a sizeable dent to global trade numbers this year. After all, businesses, manufacturers and supply chains were forcibly ground to a halt for a number of months in order to control the spread of the virus.
However, this should not detract from the huge rise in goods being sold cross-border over the past two decades. And importantly, this trend is not purely being driven by large corporations; SMEs and even sole traders are now embracing the possibilities of selling their products in overseas markets.
Possibilities is the key word here. A generation ago, it would have been extremely rare for a small business to market, sell and distribute its products to customers on the other side of the world. In fact, it would have been verging on impossible.
Now, though, any merchant with stock to sell can benefit from global trade. This is all thanks to the proliferation of technology – not simply the rise of eCommerce, but a perfect storm of multiple tech trends that have levelled the playing field between little and large businesses.
The dotcom boom in the late 90s and early 00s gave birth to eCommerce; but that is not to say that any business could easily capitalise. There were still sizeable barriers and costs associated with setting up electronic sales and global distribution networks – both things remained out of reach for smaller merchants for a number of years.
Over the past two decades, though, the complexity and price of developing an online store – or a virtual shopfront, as it is often referred – have been beaten down. It is now relatively painless to set up your own website to promote and sell your goods to online shoppers.
This was the all-important first step towards preparing a small business for global expansion. The vast majority of SMEs do not, of course, have offices or employees overseas to sell to local customers; building a website with built-in payment processing capabilities is the only realistic way to achieve this.
The evolution of digital marketing
Having a virtual shopfront is great, but the pertinent question is how can you attract visitors to it?
Vendors must market effectively to attract potential buyers in the highly competitive world of eCommerce. One option is to list through an online marketplace that already has a huge customer base – eBay being a prime example.
The other option is to develop a strategy for attracting prospective customers to your own website, which will enable the business to avoid paying fees to resellers or online markertplaces. Again, technology has helped smaller firms to compete with larger ones in this regard.
Smaller businesses typically lack the marketing budgets to afford global advertising campaigns so they can get their products under the noses of prospective customers. But smaller businesses that are savvy with digital and social media marketing can still secure traction to their eCommerce platforms.
Indeed, being smaller often means being more nimble – being able to respond quickly to digital trends and trial new forms of marketing. Whether it is retargeting online browsers, paid search results, promoted social media postings or using content and SEO to grow an organic following, applying a marketing budget in the right way can still ensure visibility for your products among online shoppers across the globe.
The ability to respond to new trends is key. Digital marketing and social media spaces change at such a pace – with new innovations and platforms emerging and dying away – that this in itself acts as a leveller between big and small businesses. What smaller companies lack in resource, they make up for in speed; they can create a TikTok account and begin building a following while the boards of large enterprises are still scratching their heads.
So, even sole traders with a storeroom full of stock can realistically create an online store and attract worldwide shoppers to it. But not all do.
In fact, Government data suggests that only 10% of UK SMEs export abroad, while 42% of large companies are doing so. It begs the question: what is holding small businesses back from exporting?
Firstly, we must obviously acknowledge that for many companies, it is simply not something they can or want to do. Their offering might be too niche or too localised; they might be perfectly content with their business as it stands, with no desire to branch out into new markets.
For those that do have a relevant product that could be sold internationally, it seems the main barriers are cost and knowledge.
Indeed, a survey of over 900 UK businesses commissioned by One World Express in May explored this issue in more depth. The research found that 51% of companies cited a lack of knowledge about international markets as a key barrier preventing their organisation from expanding outside the UK, while 43% felt the cost of doing so would be prohibitively high.
Taking the all important first step
While understandably daunting, trying to sell to customers in new markets is not as complicated or costly as many business leaders would assume.
Logistics firms take much of the pain out of the process, and by comparing rates of different carriers online, the costs quickly become very competitive. Technology holds the key. It makes engaging with carriers, assessing tariffs and controlling the supply chain far easier than it was ten, twenty or thirty years ago.
Furthermore, tracking software makes it easy for vendors of all sizes to monitor where their goods are on their journey to the customer. This provides them greater control and comfort as they ship products to customers on the other side of the world.
Like every business decision, expanding into overseas markets will require research, strategy and investment. But all companies, from one-person outfits to established SMEs, ought to consider whether they could sell their products cross-border; doing so would provide huge opportunities to grow turnover.