“There’s opportunities as well as challenges” – that was the takeaway from yesterday’s Chartered Institute of Export & International Trade webinar, held to launch a new e-commerce report and research hub designed into support SMEs.
‘Small business, big ambition: Creating an easier trade environment for SME e-commerce exporters’, was published yesterday (24 June) and contains 10 key recommendations for tackling the trade barriers SMEs face when using e-commerce to export.
The webinar was hosted by the Chartered Institute as part of ecommerce week, run by the Department for Business and Trade (DBT).
E-commerce Trade Commission
The report was produced by the Social Market Foundation (SMF), alongside the E-Commerce Trade Commission (E-CTC), and was commissioned by the Chartered Institute.
The E-CTC was convened by the Chartered Institute in 2023, has heard from small businesses nationwide through regional evidence sessions and sector-specific focus groups. This evidence went into the report, which was officially launched yesterday.
The E-ETC includes major e-commerce platforms like Alibaba, Amazon and Ebay.
Key challenges
Richard Hyde, senior researcher at SMF and an author of the report, said on the webinar that the barriers to exporting that small businesses reported fell into four broad categories, “not always specific to e-commerce”.
These ranged from the need for greater “export infrastructure”, including improved cross-border payment services, logistics services, as well as assuaging concerns about “fraud and counterfeiting”, which Hyde said was “one of the reasons [many firms] didn’t want to start exporting” via e-commerce.
Trade costs – such as VAT, customs duties and regulatory fees – were prohibitive for many small firms.
The issues of “export readiness”, understanding target markets and how to “traverse” the export process, as well as having the finance in place, were challenges for many.
Solutions
Hyde highlighted the difficulties SMEs experienced securing export finance, and said the report called for “a new suite of SME-focused export finance produced delivered by UK Export Finance (UKEF)”.
The need for this was echoed by the Chartered Institute’s UK public affairs lead, Grace Thompson, who said that products need to provide a “wide range of financial arrangements”, such as more manageable interest rates and grace periods for late payments.
Use the resource hub
One recommendation that arose midway through the E-CTC’s remit was to share all existing resources to support small businesses to trade through a single, easily accessible portal.
Acting upon this, the report launch coincides with the release of the E-commerce Resource Hub, which Thompson says will be “constantly updated, ensuring that new regulatory changes are taken into account”.
This, she says, reflects an overwhelming amount of feedback which suggests that “it’s hard for small businesses to keep up to date” with the changing regulatory environment.
At recent evidence sessions run by the E-CTC, many businesses reported difficulty complying with the EU’s updated General Product Safety Regulation (GPSR), owing to lack of awareness.
Thompson, as well as Alibaba Group Tmall’s head of business development Kristina Hui, urged businesses to “make use of the hub”, for advice, as well as case studies of export success.
Highlighting the value of the export case studies shared in the resource hub, Thompson advised attendees to read them and “be inspired”.
“There are so many opportunities to and people here to help. Everyone wants so support small businesses to trade”.
New opportunities
She noted that businesses have faced a prolonged period of “uncertainty”, especially following this year’s US tariffs, which have cast doubt over the value of the US as an export market and created new supply chain vulnerabilities.
However, she added that recent trade deals completed by the UK with the US, as well as deals with India and a recent agreement with the EU, should “boost business confidence”.
Finally, one opportunity that Thompson said was reported from evidence sessions in the South of England was the ability of influencers to help businesses boost their market reach beyond the UK.
Thompson said partnering with influencers can be a “major source of opportunity, if you want your brand to proliferate beyond what your marketing capabilities may be”.
Boost your reach
Hui also said that e-commerce platforms can present opportunities, making it “efficient and easier” for small businesses to export.
Using Tmall as an example, she said that functions such as logistical capabilities, like warehousing, can reduce some of the administrative burden for exporters.
Many online platforms also take on responsibilities that mean the exporters doesn’t need to register as a legal entity in the country of import.
Hui added that one of the best things to consider when evaluating platforms is “the reach” they offer, putting small businesses in front of potentially “billions” of new consumers.
This was seen as e-commerce’s main draw by respondents on the webinar, with over three quarters (77.8%) responding that ‘improved reach/access to customers’ was the main benefit of online marketplaces for businesses.
