Alibaba Group’s “Export Opportunity Report” examined the export climate in nine European markets – Belgium, Denmark, France, Great Britain, Italy, Netherlands, Sweden, Spain – and also surveyed 1,051 companies from Germany between February 21 and March 2. March 2023. The digital transformation, which leads to more efficiency and cost savings, as well as online marketplaces, which particularly support small and medium-sized enterprises (SMEs) with exports, turned out to be opportunities.
Opportunity for export
In general, the companies agreed that export represents a great opportunity. A majority of those surveyed (85 percent) stated that foreign trade promotes innovation in their own company, increases sales (84 percent), increases the number of employees (84 percent) and plays a decisive role in the future of the company (85 percent). percent) and make the company more resilient overall (84 percent).
“The figures show that exporting companies are more resilient and innovative and can therefore appear more attractive as employers. All of this is especially important today,” the report says. Overall, four out of five European companies are already exporting and 70 percent expect their exports to increase next year.
challenges
Challenges in the supply chain and logistics were cited as the greatest obstacle to exports by a fifth of those surveyed across Europe, followed by a lack of cultural awareness or unfamiliarity with foreign markets (19 percent), increased bureaucracy, price competition and insufficient production capacities (18 percent each).
Businesses in the UK and France cited supply chain and logistics issues as the top obstacles, while German businesses cited a lack of cultural awareness and unfamiliarity with the foreign market as the top challenges. For Swedish companies, the increased bureaucracy is one of the biggest hurdles.
Opportunity for digitization
80 percent of those surveyed stated that digitization had led to more efficiency and cost savings in their company, with a total of 73 percent of the German companies surveyed currently exporting; the number is even higher for companies with more than 100 employees.
However, more than two-thirds (69 percent) of the German companies surveyed also see digitization as a hurdle for their company. “German companies are aware of the importance of digitization – in practice, however, this initially encounters challenges. 71 percent of those surveyed state that they are not convinced of their company’s digitization strategy. In the case of micro-enterprises with up to ten employees, it is even 92 percent,” according to the report.
Successful implementation is therefore important if the digital strategy is to bear fruit. More than three quarters of respondents (78 percent) want to learn more about digital transformation.
“Digital transformation is one of the biggest opportunities for SMBs as it impacts every aspect of a business – from manufacturing to workplace collaboration and the entire supply chain. A successful digitization strategy makes it easier for companies to enter new markets and strengthens their resilience to fluctuations in demand. Small and medium-sized companies should therefore get involved in digitization and take measures to diversify their sales channels and open up new customers and markets,” summarizes Karl Wehner, Managing Director Alibaba Group – Germany, Austria, Switzerland, CEE and Turkey.
challenges
The large German companies surveyed with more than 500 employees named a lack of intercultural competence and knowledge of the target market (30 percent), economic uncertainty (26 percent) and a lack of demand (26 percent) as the greatest obstacles on the way to digitization. Small companies with fewer than ten employees, on the other hand, suffer more from bureaucracy (57 percent) and language barriers (43 percent).
Opportunity online marketplaces
German companies often use online marketplaces to boost exports: 59 percent of those surveyed for sales, for example. The larger a company, the more likely it is to already have a presence in a marketplace, the report found. “If you only take into account small and medium-sized companies with fewer than 250 employees, this value drops to 41 percent.”
The advantages that should be mentioned are that online marketplaces lower entry barriers into new markets and can support the digital transformation. They are also reliable distributors and offer access to new technologies that can help increase sales. These are, for example, artificial intelligence, AR/VR applications and interactive stores.
challenges
However, there are a number of challenges, especially for SMUs, which the report does not mention but which cause concern, such as the large supply of similar products on online marketplaces, which can lead to price pressure. Also, a generally greater focus on products rather than brands, as well as delayed payments and high commissions.
German companies are therefore cautious and carefully weigh the pros and cons. “German companies use these [neuen] technologies so far. In markets like China, on the other hand, they have long been an important part of a successful marketing strategy,” is the conclusion.