TO better understand how micro, small and medium enterprises (MSME) fared and the action these businesses took to survive the pandemic, global B2B e-commerce platform Alibaba.com and AliResearch Institute co-published a report titled "Challenges, Responses, and Transformation of MSMEs in the Post-Pandemic Era".
The research report was led and drafted by an economist at Texas A&M University Professor Gan Li and his team of researchers based on a quantitative survey among MSMEs conducted by Alibaba.com and AliResearch, as well as studies through a wide variety of relevant public and academic information sources.
Alibaba Group vice president and head of AliResearch Institute Hongbin Gao, in a statement, said that the report's main objective is to provide a better overview and at the same time provide the necessary information to support and equip the MSMEs as they play an integral part in the global economy's recovery journey.
"We have to recognise that MSMEs are not only critical economic players but their health and prosperity are also critical to a full and sustainable global economic recovery. Consequently, we have released this report to help return MSMEs to the centre stage and facilitate broader and more practical discussions about supporting MSMEs and equipping them for greater economic impact," said Gao.
The report finds that two thirds of total global MSMEs reported that their business dropped by 40 per cent and that, of all MSMEs, the pandemic took the largest toll on smaller enterprises. This was to be expected since many smaller businesses did not have the resources or infrastructure to survive the repeated shutdowns, local restrictions, shortages and other issues brought by the pandemic.
EMBRACING DISRUPTIONS
In Southeast Asia, MSMEs account for 97 per cent of all businesses in the region hiring 67 per cent of the total working population, and digital transformation has proven to be a lifeline to many of these MSMEs during the pandemic. It reduced costs, provide timely access to information, optimise workflows, and help expand into new markets.
According to Alibaba.com vice president Andrew Zheng, the pandemic has changed global trade forever and "the creativity and ingenuity that MSMEs have put into action to overcome the many hurdles created by the pandemic are nothing short of impressive".
In Thailand, about 40 per cent of the surveyed MSMEs shared that e-commerce companies like Alibaba.com offer the support they need to improve operational efficiency during difficult times.
"E-commerce may have served as a survival mechanism throughout the pandemic, but moving forward, it will remain a valuable tool for global trade. Social selling, live commerce, virtual trade shows, and request for quotation (RFQ) marketplaces allow sellers to get creative in how they reach their audiences and make it easier for them to connect with their ideal clients."
Unsurprisingly, the research also revealed that the survival rate of MSMEs jumps seven percentage points higher in the regions with the highest e-commerce penetration than in those with the lowest. In addition, the economic downturn was less severe in regions with higher e-commerce penetration rates too.
"Through digitalisation, MSMEs can also easily access insights related to internet traffic, demand forecasting, and other key analytics that empower them to make better decisions for their businesses," added Zheng.
However, it is also reported that there is a significant gap in digital strategies adoption between smaller and larger enterprises – the smaller enterprises were found to have lower adoption of sophisticated digital technologies and tended to digitalise only general administration and marketing functions, neglecting other aspects including enterprise resource planning, customer relationship management and big data.
The full report is available in multiple languages and can be downloaded from Alibaba.com