Exporting To China Through Digital Marketplaces, A Growth Lever For SMEs

Why should a Madrid, Andalusian and Galician SME consider selling in China through online channels? Any business would think first of selling to its neighboring countries before setting its sights on the Far East. However, “made in Spain” is increasingly valued in China and business opportunities, if the strategy is well planned and the right partners are chosen, are enormous there.

And it is that China stands as the country with the fastest growing economy. The pandemic has revealed the importance of going digital and global as an escape valve from this situation. That is why, thanks in large part to the digitization of the country, the Asian giant has been the one that has best weathered the crisis.

China’s e-commerce reaches a value of 1.94 trillion dollars and is the only economy that grew in 2020, with an increase of 2.3% of GDP, according to data from the Chinese National Statistical Office.

Thanks in large part to the digitization of the country, the Asian giant has been the one that has best weathered the crisis

According to the Analysis of demand and consumption in China prepared by ICEX, in this growth of its GDP, the supply of the primary sector contributed 9.5%, in the case of the industrial sector 43.3%, and 47.2% of the services sector, thus placing services and private consumption as the main growth engines of its economy. With this very favorable context for Spanish SMEs, they must take advantage of the potential offered by the “Asian dragon” through digital transformation.

Those SMEs that are daring and plan an adequate and realistic strategy in the medium and long term obtain rewards. This is demonstrated by a survey carried out by the Alibaba Group in March among small Spanish companies, of which 82% that export to China through marketplaces claim to have significantly increased their sales.

Only 14% of Spanish SMEs have dared to enter the Asian country

China sets itself, therefore, as a target to take into account in order to get out of the crisis. However, according to another study also carried out by Alibaba Group this year, only 17% of European SMEs export to this market, unlike other destinations chosen to sell such as North America (30%) or among the member states of the EU (73%). Focusing on Spain, only 14% have dared to enter the Asian country.

This is a huge loss of business opportunities , as the Chinese market offers endless possibilities for companies that want to expand their business. The ironic thing is that SMEs are aware of the skills and capacities they possess because, citing again the latest survey conducted among Spanish SMEs by Alibaba Group, more than 80% of them know sales tools through the online channel such as marketplaces.

Export success does not have to imply a high initial investment
But the trend is changing, fortunately: 39% of them plan to export for the first time in 2021. This is added to the fact that 52% of the Spanish companies consulted expect to increase their offer of products and services for the international market with the objective to alleviate the crisis, in a clear trend towards the digital transformation of their businesses.

The success of the export does not have to imply a high initial investment in the markets where you want to sell thanks to the fact that the online channel facilitates this process.

European aid for digitization
In turn, the moment is exceptional to consider international expansion regardless of the size of the company since both European and national institutions are supporting digitization and export.

Such is the case of the agreement signed between the European Union and the Government of Spain for the granting of aid to one million SMEs with the aim of digitizing their businesses. A budget of 3,508 million euros, with a deadline for the end of 2024, that would help companies to enter China for the first time through online sales.

On the part of Alibaba Group, our goal is to make it possible for companies of any size to carry out the internationalization process to China and also globally thanks to a digital ecosystem that includes leading e-commerce platforms such as Tmall Global, the largest China’s cross-border B2C e – commerce platform , and which served as a springboard, for example, for more than 29,000 brands belonging to 5,800 different categories that operated through the marketplace in 2020.

The Chinese platform Tmall Global served as a springboard for more than 29,000 brands in 2020

Companies “Made in Spain” of various sizes and sectors such as Sesderma, Martiderm, Singuladerm or Freshly Cosmetics in cosmetics, Camper in fashion, Osborne in food, or parapharmacy and nutritional supplements such as Grupo Uriach, Drasanvi, Goah Clinic, Suavinex, Farma Dorsh, o PharmexCare already take advantage of the advantages of Alibaba Group to sell successfully in China.

It is the opportunity to reach the nearly 900 million active consumers annually in our marketplaces for this country. Brands and companies can draw on Alibaba’s vast ecosystem beyond its e-commerce platforms, such as its smart payment services, logistics, marketing or cloud solutions, among others. With this, those businesses that enter the Chinese market with Alibaba as their main ally will find a lever for sustainable and efficient growth in order to emerge from the global crisis.