Small Firms go global with E-Commerce : By - David Wei Chief Executive, Alibaba.com

As a major facilitator of globalization, the Internet is levelling the playing field and creating new opportunities for businesses at the grassroots level. It has made the world flat, as author Thomas L. Friedman argues, and, in my opinion, fairer. It is tipping the balance towards small- and medium-sized enterprises (SMEs) and away from big corporations, and it is happening in emerging markets such as India and China as well as established economies such as the United States. 

Traditionally, buyers found a trading partner by digging through trade catalogues and magazines or attending expensive trade fairs. Large firms might choose to set up sourcing offices in Asia and use trading agents. Yet, this was not affordable for most SMEs. Online marketplaces have changed all that by bringing buyers and sellers together to trade on the Internet.

Companies looking to partner with low-cost manufacturers can now search in these virtual marketplaces to find suppliers and contact them easily. 

Today, SMEs in Germany can source products from India just as easily as they can from Frankfurt. 

And it is not just about sourcing: online marketplaces help SMEs expand their market too. I recently learnt of a small jewellery trading company in India that has grown from one gold workshop to an established jewellery brand with seven factories. All this has happened in a span of just over a year! Though the company had been in business since 1975, it was only in 2006 that they decided to venture into the export market through e-commerce. The company has witnessed substantial growth since then.

Also, it is no surprise nowadays to find companies that manage their business entirely on the Internet. An example is a stainless steel and kitchenware manufacturer from India who has made the Internet his primary storefront. Through this, the company found prospects and generated revenues through markets such as Brazil, which he would have never focussed on through the traditional business route. E-commerce has, thus, made it possible for firms in markets around the world to trade with customers from places they have never been to. 

The next breakthrough in e-commerce will be services beyond trade; services that can help SMEs solve almost any business issue. For example, in November last year, Alibaba.com entered into a partnership with Industrial and Commercial Bank of China and China Construction Bank to provide cheap and efficient business loans to SMEs in the Mainland.

Globalization is no longer just the realm of big business – it is for everyone, from every country. By embracing e-commerce, these SMEs are growing their business, hiring local staff and making money, and this, in turn, benefits their local communities and economies. 

The Internet opens new avenues to trade without regard to geography or distance or even language. It helps SMEs take advantage of globalization and turn it into a good word for everyone.

As in the previous years, anti-globalization supporters took to the streets at the just- concluded World Economic Forum in Davos. They think globalization benefits multinationals at the expense of small businesses, developing countries and the poor.

I disagree because I have seen the rise of entrepreneurs and SMEs which are benefiting from globalization and the Internet.