B2B e-commerce platform Alibaba.com, the first business unit of China-based Alibaba Group, first opened its platform to small- and medium-sized businesses in the US in July 2019. When it launched back then, the company valued the global B2B e-commerce market at $23.9 trillion and estimated a total of nearly 30 million SMBs in the US. The US launch of Alibaba.com was especially aimed at manufacturers, wholesalers and distributors. And as of mid-January, the company said it had connected with more than 10,000 CEOs, entrepreneurs and innovators around the country since July 2019.
On Jan. 14, Alibaba.com shared the results of its new "Alibaba.com U.S. Small and Medium Business (SMB) Confidence Survey,"in which an independent research firm surveyed 5,000 US SMBs conducting B2B business. The results painted a picture of the state of B2B e-commerce in the US. Here are Alibaba.com's summary findings of the survey:
US B2B SMBs are optimistic:
- A strong majority (62%) of B2B businesses are optimistic about the economy, saying the economy is gaining momentum or on its way up with a bright future – while only 4% believed the economy is at risk of a downturn
- 46% of respondents are expecting their online B2B businesses to increase in volume – with 27% of those expecting an increase of 25% or more. 72% anticipate increased revenue and 60% expect increased procurement budgets
- 57% hired employees to support their online B2B buying and selling, and, among the 46% of companies that expect online growth over the next year, eight in 10 companies surveyed plan to hire at least one employee as a result of their online activity
US B2B SMBs are digitizing:
- 54% of companies recognize the impact e-commerce platforms can play in their businesses, but the bulk of their online business activity is still done by email and website order forms
- 90% of U.S. SMBs surveyed reported doing at least some of their B2B selling or sourcing online
- The top benefits sellers cite from selling online are: reaching more customers (59%), finding customers more quickly (47%) and increasing profit margins (44%)
- Buyers cite the top benefits for online sourcing as finding suppliers more quickly (53%), reducing the need for travel (44%), greater purchasing power (38%) and higher profit margins (38%)
US B2B SMBs are globalizing:
- The majority (59%) of B2B companies surveyed by Alibaba.com report conducting some cross border trade – a far greater rate than the 1% of U.S. businesses that are cross border1
- Cross border business makes up an average of 17% of the business of B2B companies surveyed
- Surveyed businesses cited the following key benefits of cross border trade: more customers and more choice in suppliers (50%); revenue growth (47%); and increased profit margins (41%)
- The top three regions generating the most interest among U.S. B2B businesses surveyed include the neighboring North American countries of Canada and Mexico (45%), Europe (21%) and China, Japan and Korea (17%)
“Strong SMB confidence among American business owners and entrepreneurs, plus the growth from digitizing of their business and doing business globally means the future is bright for US. SMBs,” said John Caplan, head of North America B2B at Alibaba Group, about the results. “Less than one-third of businesses we surveyed have been doing business online for more than five years. That means there is an enormous opportunity for US SMBs to digitize and grow their businesses globally with ease."
1 Based on the 2016 U.S. Census Bureau report, “A Profile of U.S. Importing and Exporting Companies, 2015-2016” with total U.S. importers and exporters (413,325) in relation to the total number of U.S. businesses (32.57 million) as reported in the U.S. Census Bureau’s “County Business Patterns and Nonemployer Statistics Combined Report”.