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SMEs Development through E-commerce

September 28, 2016

 

Up until the 18th century everything was much simpler. From the 18th century it became a little complicated and the 21st century changed it all.

 

To produce, we require Labor and Capital – those are the basics of economics, although the farmer does not have to be an economist to know that plowing the land requires a tractor (capital) and a tractor operator (labor). However the modern world added Land and Entrepreneurship to the equation; the term “Land” implies much more than just a physical land – it also considers mineral resources, including oil; as for the Entrepreneurship – it became the most significant variable in the equation.

 

The 21st century, the century of Globalization, with more or less open borders, allowing getting digital access to almost anything and 1-day travels from one furthermost destination of the World to another, granted “Entrepreneurship” a special role. The latter factor unites the rest three through innovation and creativity and transforms them into a profitable business; otherwise many may possess land+capital+labor but fail to produce or set up a business. 

 

Enough said about the Entrepreneurship, but to make business profitable, the product must be sold. Here lies the special role of the entrepreneur as sales of the product mostly rely on his/ her innovativeness and creativity. Let’s drop the principles of product selection and just assume that right choice was made – from the day of product’s warehousing its prompt sale tops the agenda. Exactly here starts the other reality, created by the 21st century, the reality that expands daily, hourly, in seconds. It’s the electronic space around us. In other words, if in the past consumer interacted with the product through shops, markets, exhibitions and other tangible means, concluded deals and made payment in a physical space, now all of aforementioned is substituted by the digital world, or the e-market with its shops and consumers. To bring consumers to the e-shop you immediately require e-marketing as you obviously cannot hand e-shop printed brochure to the e-user. So the electronic marketing (e-marketing) emerged and combined with all aforementioned factors created e-commerce.

 

In contemporary world, almost all start-ups are fully and/or partially launched in the electronic space. The area where products can be sold without use of e-commerce is shrinking day by day, that is why I suggest mentioned field to become the key priority for SME businesses worldwide and especially in developing countries. E-commerce has grown to become as significant for the business as roads, low taxes, simple regulations and etc. To make the point even clearer let me bring very simple observation done by Robert Reich (http://robertreich.org/):

 

 

UBER, the world's largest taxi company owns no vehicles, however it owns the great internet app which allows to connect the taxi drivers to the customers.

 

 

 

 

 

FACEBOOK, the world's most popular media owner creates no content however runs the internet social platform which enables the distribution of the news to the target individuals.

 

 

 

 

ALIBABA, the world's most valuable retailer has no inventory, however it has the largest e-shopping platform.

 

 

 

 

 

 

AIRBNB, the world's largest accommodation provider owns no real estate, however it runs the largest e-booking platform which connects the travelers to the lessors.

 

 

 

All the great ancient cities were situated on the rivers in order to be able to channel their goods easily to the international markets, nowadays we need a proper internet connection and well developed internet tools like the web-page, social media-page, and etc to channel our goods to the world market. With the proper skills of marketing and specifically the e-marketing the e-platforms are the best commercial gateways for the SMEs to interact with the potential customers from all over the globe.

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