By Roland Palmer, General Manager of UK, Benelux and Nordics, Alibaba Group
For UK SMEs, retaining and improving their gross profit margin is the ultimate goal. According to the Office for National Statistics, approximately half of UK businesses reported price inflation or energy prices as their main cause of concern. To counteract these issues and retain margin, 16% have reported changing suppliers or finding alternative solutions to get the needed materials, goods, or services. For some businesses, this may mean “trading down” to source alternative products or removing product lines altogether.
However, in the hunt for margin gain, UK SMEs must not forget that product quality is king. Research from global regulatory compliance firm Ideagen found that while the cost of living has placed greater emphasis on price, consumers are not willing to compromise on the quality of goods.
Yet, despite demand from customers for higher quality, 1 in 10 consumers have reported a notable decline in the quality of the products received over recent years. This is likely because of UK buyers prioritising margin over product quality, in the hope of growth. This potentially creates a gap between the expectations of the consumer and the offer of the brand and could turn them off the brand in the future. In fact, according to KPMG, product quality is the most important factor in building customer loyalty – greater than value for money, customer service and an easy shopping experience.
So how do UK SMEs tap into this demand and ensure they don’t miss the mark when it comes to product quality? In addition to macroeconomic challenges, we know that sourcing has become difficult for UK businesses in recent years. Supply chain managers are getting harder to find, while archaic and outdated online systems are frustrating nearly half of all B2B shoppers. This makes it hard for UK buyers to look at alternatives and stay up to date with the needs of consumers.
The good news is that there is a solution: B2B online marketplaces. Harnessing the best of B2C marketplaces, B2B online marketplaces enable B2B buyers to shop around from a virtually limitless number of global suppliers to make more efficient and effective sourcing decisions. They typically host millions of products, offered directly from manufacturers around the world, which provide the same quality of goods at affordable prices.
To take it one step further and help UK SMEs deliver on quality, Alibaba.com – a leading platform for global B2B e-commerce that serves buyers and suppliers from over 200 countries and regions around the world – has recently launched its European Pavilion, a dedicated resource for EU/UK-certified products and products sourced from verified suppliers.
Working in partnership with TUV Rheinland, a leading product testing and certification provider, the European Pavilion also helps B2B buyers on Alibaba.com identify reliable and reputable suppliers. It centres around enhancing trust and transparency within the B2B landscape. TÜV Rheinland, with its expertise in product testing and certification, collaborates with Alibaba.com to validate the credibility of suppliers on their platform.
Initiatives like this enable UK SMEs and business buyers to make better purchasing decisions. With online marketplaces, buyers can source more effectively, connecting with high-quality suppliers, offering high quality products at affordable prices.