By Roland Palmer, General Manager of UK, Benelux & Nordics, Alibaba
Confidence amongst small businesses has improved drastically in recent months, as the knock-on effects of the energy crisis begin to subside. According to the Federation of Small Businesses, there was a big uptick in the first quarter of this year, with the headline confidence measure coming at -2.8 points, up from the deeply negative finding of -45.8 points recorded in the last quarter of last year.
Nonetheless, SMEs will continue to look for opportunities to optimise their sourcing strategies, which enable businesses to buy and sell more seamlessly than ever before, for opportunities to optimise their sourcing strategies and unlock growth.
Shoring up supply chains
Over recent years, global supply chains have been disrupted and bottlenecks in key global manufacturing hubs have emerged. According to figures from RSM, 38% of UK businesses experiencing supply chain problems said they had seen an overall decline in customer satisfaction, while 28% had lost one or more key customers within the past year due to unanticipated supply chain pressures.
To mitigate these issues, 33% have exited one or more product lines, 22% have exited lines of business entirely, and over 40% of businesses have changed their suppliers outside of the UK. Some 38% have even resorted to purchasing some supplies from competitors at a premium price.
By establishing global networks with virtual sellers on online B2B marketplaces, SMEs can de-risk their supply chain and ensure business continuity in the face of adversity.
Online B2B marketplaces allow buyers to source previously inaccessible new products to offer their customers, as well as search for the most competitive pricing to ensure they are getting the best deals. Thanks to the availability of product lines, with often guaranteed delivery dates, businesses are much better informed to make businesses critical decisions, as well as react swiftly to the changing demands of their customers. The agility a marketplace can offer is truly unmatched in making B2B wholesale sourcing more efficient – saving time and money.
Streamlining the buyer-seller relationship through technology
In addition to a vast supply chain network, B2B marketplaces offer a wide range of technologies that make the relationship between buyer and seller – regardless of where they are and what they sell – as seamless as possible.
Livestreaming, hybrid tradeshows and virtual reality tours are technologies that are disrupting the B2B buying experience. Here, sellers are able to showcase the quality and unique points of difference of their products, while buyers have increased transparency and insight into a seller’s operations, increasing trust. And technologies like this are in high demand amongst B2B buyers. During the first week of this year’s Alibaba.com March Expo, an online virtual trade show for B2B buyers and sellers, more than 700,000 B2B buyers watched 50k LIVEs, and more than 60,000 manufacturers performed LIVEs – a 100% increase from last year.
These technologies are only the start of the future of sourcing, with many others still waiting to be leveraged. Over the coming years, it is likely there will be increased use of, and reliance upon, social media within the online sourcing space. In fact, in a recent Wunderman Thompson report, 35% of B2B buyers stated that they will exclusively use social media channels to conduct their online sourcing purchases within the next 5 years.
Export opportunities for SMEs
In the face of domestic uncertainty, driven by macroeconomic conditions including cost of living pressures, businesses are turning to international export markets in pursuit of growth.
In Alibaba’s recent UK Export Report – a study of more than 3,000 UK businesses* – we found that UK exporters are optimistic about their prospects for growth in the next 12 months. Nearly three-quarters (73%) of those who currently export, expect their export sales to increase, and almost a third (31%) believe the EU presents the biggest export opportunity.
To tap into such growth opportunities, UK businesses are increasingly turning to B2B marketplaces. Today, more than seven in 10 (73%) of those surveyed use online marketplaces to boost export sales, 30% of whom started working with online marketplaces during the pandemic, which provided a strong impetus for businesses to adopt digital tools.
B2B marketplaces provide clear benefits for buyers and sellers alike, creating more seamless and frictionless sourcing/exporting than ever before and are certainly one of the most promising channels for helping SMEs unlock long-term, sustainable growth within an increasingly challenging trading environment.