UPS research shows growth potential for SMBs and how governments can help
UPS recently commissioned a survey to better understand the e-commerce aspirations and challenges of small and medium-sized businesses (SMBs) in nine countries in Asia, Europe, the Middle East and North America.
The results showed the eagerness of SMBs to use e-commerce to export beyond their home market and how COVID-19 brought about unexpected obstacles. The majority of SMBs are facing common challenges in both mature and growing e-commerce markets:
- Cash flow constraints,
- Difficulty attracting new customers,
- Challenges meeting demands for new products and services, and,
- Supply chain disruptions.
SMBs in emerging markets, such as India, Indonesia, Mexico and Vietnam, reported concerns with the protection of intellectual property rights, burdensome customs and tax regimes, and lack of infrastructure for e-payments. Elsewhere, SMBs in markets such as Italy and the UK cited the complexities of collecting taxes from customers as a barrier. And in Spain, the need to manage customers’ returns arose as an acute challenge.
UPS supports SMB customers in overcoming many of these challenges and helps them tap into the full potential of international e-commerce. Governments also have various support schemes in place but SMBs are often less familiar with them.
So what more can governments do to enable e-commerce growth? The SMBs surveyed all focused on increasing the ease of and support for doing business, including:
- Help with financing to cushion the impact of the pandemic,
- Reduction in the amount of paperwork needed to access government support,
- Training and resources on how to increase online sales (for example, setting up e-payments, branding, website development, logistics) and,
- Help developing a clearer understanding of trade rules and regulations.
“SMBs revealed so much to us, and now we have a lot of work to do to help them – as the engine of our global economy – get back on track,” said Penny Naas, president of international public affairs.
“UPS will continue working with governments around the world to drive policy solutions that will help these businesses grow, compete and succeed.”
The report indicates that that SMBs make up 95 percent of the companies in the UAE, employ 86 percent of the total workforce, and contribute to an estimated 53 percent of the UAE’s GDP. Online sales in the Middle East account for only 2 percent of overall retail sales, showing the huge untapped potential for e-commerce expansion, the majority of SMBs surveyed were selling online (51 percent), but only 20 percent were exporting. Even among exporters, international e-commerce sales only accounted for about 30 percent of online sales, indicating an opportunity to promote e-commerce export amongst SMBs.
The full report and findings of the survey can be downloaded here. The survey was conducted from March to May 2021 across nine countries with differing levels of e-commerce maturity: Canada, India, Indonesia, Italy, Mexico, Spain, the UAE, the UK and Vietnam.
Survey by : - UPS
