Small businesses are the backbone of the global economy, accounting for 90% of businesses, 60 to 70% of employment and 50% of GDP worldwide. A strong and sustained global economic recovery is only possible if these businesses can successfully adapt to post-COVID consumer behavior. This is where digitalization is the great equalizer.
Digital technology will drive the recovery for small businesses, for several reasons. First, the adoption of mobile devices has made it easier for people to experience the benefits of digitalization. The digital shift will only accelerate in the coming years, as the number of mobile device users in the world is expected to increase from 6.38 billion in 2021 to 7.52 billion in 2026.
Second, the way people shop has been changing for years. There will always be a role for bricks-and-mortar stores, but the future of shopping is increasingly online. In June, Morgan Stanley forecast that the global e-commerce market would grow from $3.3 trillion today to $5.4 trillion in 2026, an increase of more than 60% in four years.
For small businesses, the benefits of digitalization are clear. Businesses with a strong digital strategy were better equipped and diversified to handle the downturn because their online channels mitigated the loss of in-store shopping. According to the Organisation for Economic Cooperation and Development (OECD), businesses that invested in their digital futures experienced a number of other long-term benefits, including better communications and a smoother entry into global markets.
An independent study also found that small businesses that prioritized digital transformation saw revenue growth double those just starting digital transformation efforts – and eight times higher revenues than those that did not prioritize digitalization.
The good news is that digitalization is on the rise according to the OECD survey, which found up to 70% of small businesses are intensifying their use of digital technologies as a result of the pandemic. At Ant Group, we are using our digital payment and marketing technologies and financing platforms to help small businesses gain the upper hand in today’s increasingly digital and borderless economy.
Alipay+, a suite of cross-border digital payment and marketing solutions, connects global brands with mobile-savvy consumers worldwide. Currently Alipay+ is enabling 2.5 million global merchants to engage with over 1 billion e-wallets users, especially those from Southeast Asia. This means that unbanked or underbanked adults with a smartphone can make online and offline payments just as conveniently as those with credit cards or bank cards.
