Every year, new technologies and innovations are being made. The rate at which this is happening is actually shocking. If one really thinks about it, we have made far more technological advancements in the past century than we have over the thousands of years of human history.
Usually when new tech is invented, it might take a few years of testing before it finally makes its way into the hands of the public. However, many can often get a glimpse of what the future holds at trade shows and exhibitions. One such even is the Consumer Electronics Show (CES) that takes place annually in Las Vegas.
This year’s CES was particularly interesting for SMEs. Alibaba Group made an appearance at this year’s event and what they are up to might potentially change the global digital and trading landscape.
If one looks closely at Alibaba’s actions over the past few years, one might notice that they have been making an effort to create partnerships with foreign trade ministries and trade bodies. In actuality, this could be Alibaba Group laying the groundwork for a massive ecommerce platform which would digitise and democratise global trade.
Alibaba Group is in the digital platform business; it mostly builds marketplaces. But it also has audience-builder and payment platforms and generally doesn’t operate stuff. It doesn’t buy or sell things. The platform is all about connecting different groups of users. The opportunity that Alibaba might be going after is that it’s trying to build a platform that lowers the transaction costs between all the world’s SMEs.
B2C ecommerce in China in itself is a huge opportunity with online retail being worth approximately US$1 trillion. Comparatively, global trade is worth much higher than that. Imagine the possibilities if you could digitise just 10-20 per cent of that global trade.
The real opportunity comes when you realise that this won’t just digitise global trade, but democratise it as well. Currently, the difficulties that come with supply chains and cross border transaction costs means that only very large companies and a select few SMEs can partake of the global trade network.
However, if you lower the transaction costs, SMEs could start to do the same. If you democratise global trade, it could become a much higher number. This is exciting news for SMEs throughout the world. If Alibaba plays it’s cards right, they may enable SMEs to operate like multinational corporations (MNCs) throughout the globe.