In the current economic and political climate it may seem hastyand unpredictable to expand your business across borders. But from myexperience in global business development, I can confidently say that there hasnever been a better time to take that risk. If your business has access to theright technology and an ample knowledge of today’s global ecosystem, you are inthe perfect position to take advantage of the borderless digital economy andrather than succumb to new tariffs, quotas and changes- use them to youradvantage to grow and expand your business.
Here are five trends to keep in mind when taking your SMB (small/mediumsize business) global in 2017:
The number of SMBs seeking to joininternational marketplaces is on the rise
If you want to be able to stack up against your competition,you may have no choice but to look at cross border opportunities. A studyhas found that currently, 58 percent of small businesses already haveinternational customers, with 72 percent planning to grow their internationalcustomer base in the next year. Marketplaces create a more efficient way toreach new customers, providing international sellers with some or most of theinfrastructure required to sell goods and services across borders. In addition,the study found that 96 percent of the small businesses surveyed were confidentabout conducting their business abroad – signifying that expandinginternationally might not just be an option, but rather a necessity for keepingup with the competition.
If there’s one particular region you wantyour SMB to expand to- it’s Asia
Consumers in China are continuing to gain more buying power,and thus, attracting more interest from foreign sellers. To benefit and sellsuccessfully in an Asian market, you must make sure that you will be able totranslate your products and services, as well as have the capability to easily receivepayments in their currencies. Although the growth across Asia has slowed andbecome more predictable as of late, demographics and consumption trends allpoint to a strong overall trajectory and by 2020, China’sconsumer economy is expected to reach about $6.5 trillion, a growth rate ofroughly 50%, despite slowed GDP growth.
There will be more emphasis on compliancewith the ongoing threat of money laundering and terrorism
The growing threat of terrorism has led to more and moreemphasis on blocking illegal financing sources. Combine this with the increasein international money flows, and you will see a greater focus on complianceand transparency than you have seen in the past. To ensure uninterrupted customerservice and seamless transactions, you will need to remain aware of theentities you are utilizing to process your transactions and ensure that theyare adhering to all local compliance and AML procedures.
Ecommerce in developing countries is ontrack to outpace mature markets
With the growth of non-traditional financial intuitions,countries where banking infrastructure is less accessible will now have theability to participate in global transactions and eventually, surpass theirmore mature market counterparts. Between 2011 and 2014, 700 million peoplebecame account holders for the first time, and thenumber of “unbanked” individuals dropped by 20 percent. This is a hugenumber, and one that is certainly going to shake up the global eCommerceecosystem. In fact, it is predicted that the financial industry will continueto grow and evolve to include the unbanked and under banked, eventuallyreaching 7 billion people on the planet. This new consumer base is too large toignore, and SMBs must look for ways to overcome language and currency barriersin reaching them.
New technology is making way for theemergence of the global buyer
With the latest technological advancements makinginternational payments so secure, consumers are becoming more comfortable withpurchasing internationally and as such, the volume and frequency of global eCommerceis on the rise. Given this, SMBs will need to prioritize providing theirpotential customers with more secure and seamless ways to conduct internationaltransactions if they want to stay ahead of the competition. B2B transactionswill also mirror this trend, with more and more businesses seeking to paypartners, resellers and contractors around the world via marketplaces ordirectly. It cannot be denied that, as more economies continue to globalize,consumers and businesses will expect simpler, more transparent cross bordercommerce solutions or they will simply look to purchase locally.
Richard is theDirector of SME Partnerships and Business Development, based in Payoneer’s NewYork headquarters. Before joining Payoneer, Richard led strategic partnershipsand business development for Infusionsoft, a SaaS-based CRM dedicated toserving SMBs. His focus on serving SMBs began with leading co-marketing partnershipsfor Google’s US SMB Marketing division. Richard commenced his career as aStrategy Consultant with Booz Allen and Price Waterhouse. Richard lives in NewJersey with his wife and three children.