Small Businesses: Storming the Borders
By: Paul Todd, Senior Vice President of eBay in Europe
Local and independently owned businesses have traditionally defined local and community economies. Now, these businesses are increasingly becoming the lifeblood of the global economy.
Maria Gabriella and Vincenzo’s story inspires me.
Through wanting to build a business they could work together on, combining Maria Gabriella’s language and Vincenzo’s computer skills, Prodotti Tipici was born. “My wife and I wanted a business we could manage from an office in our home, allowing us to balance our family and work lives”, explains Vincenzo.
The owners of Prodotti Tipici – a small online business specialised in selling Made in Italy regional food products – began their business in 2012 in the difficult economic environment of Naples, Campania; a region of Italy with one of the lowest GDP per capita.
Not long after starting their business, they started to sell their produce on eBay. Through using eBay, they gained more brand visibility and reached new clients, both locally and globally, doubling their turnover in 2014.
Today 70 percent of their business is made through exports, selling exclusive Italian specialties – from peeled tomatoes to Buffalo mozzarella - globally. The produce offered on their online store is constantly expanding and Maria Gabriella and Vincenzo expect their business to continue to thrive on eBay.
Maria Gabriella and Vincenzo are not alone in discovering the un-tapped potential of selling across borders online. Hundreds of billions of transactions take place on eBay each year, and cross-border sales are rising around the world.
The majority of the items sold on eBay come from local and independently owned businesses, traditionally defining local and community economies. Now, these businesses are increasingly becoming the lifeblood of the global economy.
We have just completed an analysis of the vibrant community of European SMBs using eBay to prosper in a competitive landscape. These are exciting times for SMBs, through harnessing technology, such as eBay, online small businesses have become global. For them, trading across borders is the catalyst for growth. For countries across Europe, it creates opportunities to spur both financial growth and economic inclusion.
Our study showed that in 2014, 93% of SMBs on eBay exported compared to an average of 26 percent among traditional offline sellers. This trend is continued throughout the lifecycle of the businesses, with 71 percent of European eBay SMBs exporting continuously from 2011 to 2014, in stark contrast to data from the World Bank which shows that only 16 percent of traditional businesses on average across six EU countries are still exporting after three years.
With over 130,000 SMBs launching on eBay since 2011, and sales of nearly €18.5bn, European SMBs are at the centre of the drive for economic growth. This phenomenon is particularly prominent within Europe, with intra-EU exports for SMBs on eBay in Europe growing by 61 percent between 2010 and 2014, outpacing traditional trade growth four times.
For two decades now, eBay has worked to reignite entrepreneurship and helped businesses like Prodotti Tipici unlock global opportunities and connect with customers globally. Our company was founded with the simple, shared purpose of using technology to create real economic opportunities for people.
We have rapidly overcome challenges like lack of trust between consumers, language barriers and the cost of shipping, creating new opportunities for SMBs. Interestingly, our research shows that businesses in rural areas can be just as successful and competitive as those in our big cities.
Still, there are many more barriers that need to fall. The European Commission, in its Digital Single Market Strategy Paper of May 2015, revealed that removing barriers to online trade within Europe could contribute an additional EUR 415 billion to European GDP. Companies like eBay are putting the tools of big business in the hands of the entrepreneur; however, more can be done to foster growth.
eBay is at the heart of this entrepreneurship revolution and supports the need to modernise regulation. Currently, many small businesses are unable to realise their full potential due to outdated trade policies. We want to help these dynamic small businesses and entrepreneurs to harness technology and compete on the global stage.
I encourage our industry peers, government and regulatory bodies to advocate and fight for small businesses to help break down common trade barriers.
As eBay enters its 20th year as a company, we want it to be as easy for small businesses to sell across borders as it is to buy on your local high street.