TPOs help SME exporters access online markets
The future of global trade is on the Internet and Trade Promotion Organizations (TPOs) have a critical role to play in securing a significant share of this value for their constituent exporters. According to the International Data Corporation, worldwide e-commerce, including both retail (‘business to consumer’ or B2C) and wholesale (‘business to business’ or B2B), is expected to double from US$ 8 trillion in 2009 to US$ 16 trillion by 2013.
When e-commerce first began in the mid 1990s, development experts swooned at its prospects for ‘leveling the playing field for the little guy’. Bill Gates gushed about the promise of ‘frictionless capitalism’ enabling small- and medium-sized enterprises (SMEs) to bypass the long chain of middlemen that take the lion's share of income. For example, eBay's research in preparation for launching their marketplace, www.WorldOfGood.com, showed that artisans typically receive less than 10% of the final consumer price on the international market.
At first everybody thought this was mainly a technical challenge to get producers to display their products online. Many companies started offering commercial e-commerce services as well as free and open source software to create online catalogues for SME exporters. But these were still beyond the technical capability of many SMEs.
While the big players achieved remarkable success online, the results were not encouraging for SMEs. Even if they managed to produce a beautiful online catalogue, buyers would have a hard time finding it among the millions of websites on the Internet. And even if they did, they wouldn’t trust it. So, besides technical limitations, the biggest challenge to global e-commerce for SMEs turned out to be generating visibility, credibility and trust.
SME exporters realized that, just as in the offline world, success comes from promoting their offerings via multiple channels to determine which works best. Many exporters started posting their offerings to online marketplaces such as Alibaba.com, GlobalSources.com, eBay.com and Amazon.com. However, for the majority of SMEs, these were expensive and laborious to maintain current.
TPOs found limited roles to play in helping their exporters with online marketing. Many developed online portals listing their members’ websites but those proved difficult for buyers to navigate to find what they were seeking.
Recently, several exciting developments have occurred in information and communications technology (ICT) that enable TPOs to help their exporters. The use of social networking services has proved the power of trusted relationships and demonstrated how high-profile TPO brands can achieve better results than exporters operating on their own. Major Internet corporations (Google, Amazon, Yahoo, Microsoft, IBM and others) also started offering ‘cloud computing’ services such as e-mail, document storage and specialized applications on their servers much more cost effectively and securely than on the exporters’ personal computers.
Technical advances such as these place TPOs in a strong position to leverage their high-profile brand to coordinate promotion and guide their members in selecting the most appropriate online tools to promote their product.
OpenEntry.com is a Washington, D.C.-based development organization with the mission of helping SMEs worldwide participate in global e-commerce. It has developed an e-commerce platform for SME networks offering free e-commerce catalogues operating on powerful Google tools and servers. It also enables a TPO to generate revenue to extend its trust-building brand by promoting all its members' offerings on one easy-to-navigate B2C or B2B ‘network market’.
For more information visit www.OpenEntry.com