KUALA LUMPUR, Malaysia, July 26, 2018 /PRNewswire/ -- Helping small and medium-sized enterprises to trade is the best way to ensure that the benefits of globalization are available to everyone.
That is the message which Diane Wang, Founder and CEO of cross-border e-commerce platform DHgate.com, brought to the 3rd APEC Business Advisory Council (ABAC) in Kuala Lumpur taking place July 23-26.
Ms Wang, one of China's delegates to ABAC, has long been an advocate for more inclusive trade. Now, as globalization appears increasingly in crisis, it is more important than ever to find ways for its benefits to be shared more widely, beyond a narrow elite of multinational companies. The backlash threatens some domestic political systems, not to mention the entire architecture of global trade itself.
Helping SMEs access world markets is the first step to a more inclusive trading system according to Ms Wang, who started out as a small businesswoman herself. In 2004 she launched DHgate, a startup, that is now a global technology platform helping empower other small businesses to access global markets.
Trade is good for SMEs: according to research by the World Trade Organisation, enterprises that engage in foreign trade are more productive and innovative. A wide range of empirical studies show that SMEs which export enjoy a rise in employment and sales.
But SMEs are under-represented in trade relative to the important economic role they play in their respective domestic economies. This hurts them and limits the benefits of globalisation too narrowly.
Helping SMEs trade means helping them overcome high fixed costs, helping them negotiate standards and border requirements, giving them information about foreign distribution networks, and helping them join global supply chains. It also means help with using foreign online payments, and with trade finance.
DHgate is to date the only e-commerce platform which is dedicated to serving small and medium sized retailers worldwide, by integrating the whole ecosystem together from logistics to payment, from marketing to customs clearance, to lower the entry barriers for SMEs to access global markets.
But DHgate is also proposing a fundamentally new challenge for APEC: the creation of a series of incubation centres to teach enterprises how to go global.
Four years ago, Ms Wang and DHgate initiated a number of Cross-Border E-Commerce Training Centres, endorsed by APEC, which so far have trained over 10,000 SMEs how to go global.
The proposed APEC Incubation Centres would upgrade the CBET model, offering training in a number of areas: 1) how to operate an online business 2) lessons on creating mock startups, 3) matching events to bring exporters, importers, and service providers together 4) help in obtaining trade finance.
SMEs are good for the health of the global economy. In some economies, SMEs account for up to 90 per cent of overall GDP growth and in most economies account for over half of employment. SMEs also promote diversity - one in three is owned by women in the developing world according to the WTO.
In other words, trade is good for small business, and small business is good for trade.