How Big Data offers a competitive edge in cross-border trade for SMEs (Alibaba’s Trade Assurance)

As HR professionals, we have been spending our time and efforts supporting people and organizational development. But now, and even more going forward, we need to support innovation and entrepreneur behavior in our staff and in any professionals around us. The target is to make a material contribution to create wealth, new entrepreneur opportunities and therefore, new jobs.

The importance of SMEs to any economy is critical. As the major source of employment and wealth creation, they are the lifeblood for all economies. They represent more than 95% of firms around the world and generate about 50% of global GDP. They number between 420 million and 510 million overall, of which an estimated 310 million are in emerging markets, according to data from World Bank Group.

Any initiative supporting SMEs development is welcome, regardless of whether it has been done in its own interest or not. I share with you a document from Alibaba and I recommend you spend some time (not too much….) on the free document shared by them cold “Alibaba White Paper”. Although it’s focused on Alibaba’s Trade Assurance, as a solution to support cross border trade for SMEs, there is a lot of interesting information about how to create “confidence” and to provide financial support to SMEs using the latest new trends from the digital world: big data, analytics…. And they talk about Industry 5.0….by 2020?? We will see. I hope you consider it useful for your SME.

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Some Key information to highlight:

Internet penetration globally since 2000 has risen from little over 400 million users to about 3.5 billion in 2016. China and India now account for around 720 million and 460 million users respectively.

  • China’s total cross-border e-commerce trade, including exports and imports, grew 28.6% in 2015, to US$776 billion from US$603 billion in 2014. About 90% of the 2015 volume was in business-to-business (B2B) transactions, the remainder in business-to-consumer (B2C) transactions.
  • This kind of solution should foster confidence, trust and trade by developing credit history tools for SMEs (removing Risk and creating confidence).
  • Despite the recent global financial crisis and subsequent sluggish growth in international trade, China’s cross-border e-commerce has maintained a growth rate of about 30% a year. From 2008 to 2016, trade volume grew from CNY 800 billion (around US$123 billion) to about CNY 6.5 trillion (around US$1 trillion).
  • In 2015 in China, about 113 million people were employed in businesses driven by the country’s digital economy, according to a report by Boston Consulting Group and AliResearch16. Jobs that did not exist until a few years ago now employ millions.

About Alibaba Trade Assurance solution:

What exactly is Trade Assurance? In short, it’s’s order-protection service, one that’s free and protects the buyer should the transaction fail to complete as agreed.

  • Unsecured SME loans based on trade data (Source: (2016):
    • Maximum loan given in 2016: RMB 10 million
    • Quickest turnaround time for getting a loan: 3 minutes
    • In 2016, unsecured loans were offered to more than 30,000 SMEs in China
  • SMEs in the more developed markets of Western Europe and North America will also benefit from this new, far more inclusive form of globalization. For them, data will facilitate business, allowing for just-in-time delivery of the latest designs to meet customer needs. The faster, leaner supply chains will mean less inventory and less wastage.

Antother interesting comment:

Industry 5.0. It took about 130 years to go from Industry 1.0 (machinery, around 1780) to Industry 2.0 (electricity, early 1900s) and then about 70 years to reach Industry 3.0 (computers, 1970s). The most recent step forward to Industry 4.0 (the Internet of Things) took about 35 years. At this rate Industry 5.0 will be underway by around 2020.

1 Comment

  1. suba suba says:

    Only a smiling visitant here to share the love (:, btw outstanding pattern. Make the most of your regrets. To regret deeply is to live afresh. by Henry David Thoreau.

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