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Digitized SMBs Are Expected to Invest More in Growth in 2022, Finds Alibaba.com

Technology leader Alibaba.com unveiled the results of its third Alibaba.com U.S. B2B Small and Medium Business (SMB) Survey which captured current SMB insights and sentiments and compared the findings to previous surveys conducted in December 2019, two months before the pandemic reached the US; and mid-pandemic in September 2020. Currently, Alibaba.com ranks as one of the world’s largest business-to-business (B2B) ecommerce marketplaces and a business unit of Alibaba Group. It provides technology solutions to hundreds of digitized SMBs around the world. 

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Highlights of the Alibaba.com Report on Digitized SMBs

  • Alibaba.com surveyed thousands of U.S. SMBs in pre-pandemic December 2019 and again in December 2021 and found digitized businesses are faring better, exporting more, planning to invest more and are significantly more confident about the future of their business than offline companies;
  • Following a quarter with robust growth of around 50% year-over-year increase in Gross Merchandise Value (GMV) on the platform, Alibaba.com kicks off March Expo 2022 to give digitized businesses even more options to unlock global opportunities.

Results from the latest survey of 2,401 U.S. SMBs conducting B2B business found nearly three-quarters (74%) are optimistic about the economy, which surpassed the pre-pandemic level of 62%, despite the current supply chain, inflation and labor market challenges. Many are also expanding their digital commerce and exploring international channels: about half (47%) of U.S. B2B SMB trade is now through ecommerce, a nearly 12 percentage point jump in two years, and 70% of SMBs are conducting international B2B trade, compared to 59% in December 2019.

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Digitized businesses reported even higher levels of optimism than their offline peers, bolstered by stronger sales performance, larger anticipated investments and more global exports:

Digitized SMBs far outperformed businesses that are still operating offline in terms of sales and sourcing: 61% of digitized businesses saw increases in sales in 2021, compared to just 34% of those who are not online.

  • Digitized SMBs are expected to invest more in growth in 2022: Digitized businesses are more likely than non-digitized businesses to make investments in 2022, including hiring more full-time employees (48% vs. 32%) and increasing capital expenditures (49% vs. 33%).
  • Digitized businesses are better equipped to go global: 39% of digitized businesses expect to grow exports in 2022, versus just 13% of those who rely on offline channels.
  • Digitized SMBs are significantly more confident about the future of their own business: 91% of digitized businesses are confident in the future of their business, compared to 80% of non-digitized businesses.

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“We saw nearly two decades of change take place in early 2020 as business owners pushed to get digital amid the global health crisis and now, two years later, it’s clear that their flexibility and grit has paid off,” said John Caplan, President of North America and Europe of Alibaba.com.

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John added, “Our proprietary research into an important and growing segment of the U.S. economy finds that getting digital is critical to success, with digitized businesses far outperforming in sales, exports, and investments versus those still operating offline using analog tools and processes. These trends are accelerating the success of US SMBs as they leverage the tremendous digital tools and infrastructure available with Alibaba.com to make it easy to sell and source globally.”

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During the quarter that ended on December 31, the Gross Merchandise Value (GMV) of transactions completed on Alibaba.com grew around 50% year-over-year. Revenues for the business unit grew by 29% year-over-year, particularly the value-added service revenue (up 43% year-over-year), which includes services such as global logistics and Alibaba.com Trade Assurance.

Ulviyya Nasibova, Founder of Uli’s Gelato, voted L.A.’s Best Ice Cream 2020 by Los Angeles Magazine, and one of the 2021 Alibaba.com Grants Program recipients, is one of the many small business owners who has recently expanded into ecommerce. According to Nasibova, “In 2020, the foot traffic outside of my brick-and-mortar stores completely died, as well as the wholesale channel to restaurants. It was clear that we needed to adapt to stay afloat, so I decided to go back to the basics, examine everything about my brand, and determine how we could make it work online. Our pivot to ecommerce is now in progress, and I believe it will make my business resilient despite the obstacles being thrown at us.”

March Expo 2022: Unlocking Even More Opportunity for U.S. SMBs

To help entrepreneurs and business executives tap into the global digital ecommerce marketplace to create new possibilities for their businesses, Alibaba.com is kicking off the annual March Expo 2022, a month-long online trade event that connects millions of buyers and suppliers around the world in 200+ countries and regions.

The event launches today, Tuesday, March 1, with a live streamed virtual event titled “Trending NEXT” at 2:00 p.m. ET. The event will feature industry experts including John Caplan and speakers who are recent recipients of the 2021 Alibaba.com Grants Program, such as Dr. Sayed Ibrahim of New Jersey-based SprinJene and Eva Jane Bunkley of Georgia-based Eva Jane Beauty. Shannon Fitzsimmons of U.K.-based O So Curly, and Adrian Brambila of California-based Lumenora will also be speakers to share their experiences of “getting digital and going global” as they build their brands and businesses. The event will also feature Rich Russey, SVP and Publisher of Inc. Magazine, who will reveal the following two reports to help SMBs with merchandising and sourcing: 2022 Global Sourcing Trends and Trending NEXT: Top 50 Product List for 2022.

March Expo 2022 will continue throughout the month, and U.S. SMBs who visit Alibaba.com can access new, on-trend products through quality suppliers showcasing their factories through live-streaming and VR showrooms. Business owners will also be able to gain insights and access data trends, as well as numerous on-the-spot supplier discounts. This year’s event is organized around the pillars of Sustainability, Smart, Lifestyle, and Health–demand for products in these categories has seen exponential growth, and new products were being added at five times the rate of the general Alibaba.com product pool in the last three months of 2021.

March Expo comes as SMBs worldwide face increased pressure on supply chains, including the rising cost of raw materials and logistical challenges, as well as economic uncertainty. The goal is to help SMBs better leverage global B2B ecommerce for their selling and sourcing, and ultimately, to increase their margins and grow their business.

“We’re proud to celebrate the resilience, success and optimism of American entrepreneurs while helping them prepare for what’s next with insights and events like March Expo,” said Caplan.

The Alibaba.com U.S. Small and Medium Business (SMB) Survey: Research Methodology

Alibaba.com commissioned leading global research firm, Rep Data, to conduct the third Alibaba.com US B2B Small and Medium Business (SMB) Survey on behalf of Alibaba.com as a follow up to the December 2019 and September 2020 surveys. The sample of 2,401 was collected using a double opt-in online panel sample and conducted anonymously from December 6 – 21, 2021. The survey targeted decision makers at U.S. companies of 500 employees or less that buy or sell physical goods and materials with other businesses. The study has an overall margin of error of ±1.20% at the 95% confidence level.

[To share your insights with us, please write to sghosh@martechseries.com]

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