SMBs are critical players in the global economy. Whilst much is said about the moves of the large multinationals, it is important not to forget that in most OECD countries, small businesses contribute more than 50% of GDP. The challenging global economic environment in which we find ourselves means that growth of these businesses is more important than ever as a positive driver for the economy.
Luckily for these business, and indeed for us all, we are living through a digital commerce revolution globally. Globalisation has become entrenched in the world economy, and this has coincided with rapid technological innovation accelerated further still by Covid-19. This means that we are living through the age of global digital commerce, and businesses can harness the power of selling globally to boost their growth and the future of their communities.
Seizing opportunities in today’s global economy
The digital economy has lowered the barriers to entry enabling SMBs to grow their business globally. Innovation continues at pace with, for example, the rapid growth of the online marketplace model. Growth of digital marketplaces is expected to continue at 15% per year (OC&C) meaning that an ever increasing global customer base is at the fingertips of businesses. Direct to consumer sales are also set to reach £123 billion this year in the UK alone. This means that there are multiple digital channels through which businesses can reach customers across the globe, which when combines can be transformative for businesses.
Businesses are standing up and taking note, at Payoneer we recently published research into UK sellers which found that 36% are looking to enter new markets in order to maintain revenues. We also found that 46% consider direct to consumer sales to be the biggest opportunity for their business in the next 12 months and 38% say social commerce presents the biggest opportunity. This is reflective of an emerging global trend with SMBs looking to digital innovation and global customers to drive growth.
A strong omnichannel strategy means that businesses can give customers a seamless experience wherever they are in the world and however they engage with your business. This is also constantly evolving which means that those SMB owners who stay ahead of the curve will ultimately come out as the winners. The future of commerce will be shaped by Web 3 and the metaverse and first movers will be able to ride the virtual wave. Customer experience has always been a central element of a business sales strategy and innovation in digital commerce gives SMBs the tools in their arsenal to deliver a frictionless and intimate experience to anyone in the world connected to the internet – a number that is only growing.
A shift in mindset for SMBS
The transition from a domestic focus to selling internationally via digital channels can require a shift in mindset. Taking just Europe as an example, even if you are looking to sell across the continent you are faced with different languages, cultures and buying behaviours. There is also diversity in terms of regulation and e-commerce maturity which must be taken into account. Digital commerce gives SMBs access to these markets but without considering these nuanced factors they might be setting up for failure. This comes before considering the technicalities of delivering your product or services, it’s about looking at how you are going to be perceived in that market.
There are huge opportunities in global digital commerce but selling to other countries does bring with it added complexity. For instance, those who are only used to selling domestically will likely face challenges and costs when it comes to receiving funds in multiple different currencies. The maturity of the market of region is also a vital consideration with Northern and Western Europe having a higher percentage of e-commerce sales than both Southern and Eastern Europe.
Having a partner-first mindset is also going to unlock growth for SMBs. The e-commerce ecosystem is one that is increasingly interconnected and whether it’s international marketplaces or larger players, partnership and collaboration really are the name of the game. Choosing the right partners will enable businesses to provide a seamless experience across all borders.
Get your payment right
The growth of e-commerce means that the payment experience of customers has never been more important for SMBs who are selling digitally. Digital payments are becoming the norm and whilst cards are still the most commonly used payment method, digital wallets are on the rise. There will soon be a generational shift and consumers will be looking more and more for experiences and payments that align to their digital savvy lives. In Europe, payments systems are being modernised across the continent at varying stages. Businesses looking to leverage digital commerce must take this into account and ensure that they have a borderless approach to receiving funds.
There are a huge number of opportunities for SMBs across the entire European region, and those who take the right steps will be best placed to drive growth for their business