By Jijay Shen, above, General Manager Europe, Alibaba.com
Trust can often feel intangible and hard to define – especially in a business environment. For SMEs, it’s never been more important to build trust. According to PwC’s 2023 Trust Survey, consumers, employees and business executives overwhelmingly agree that trust in business is imperative. What’s more, 91% of business executives agree that the trust that businesses build with their stakeholders can boost profitability.
However, in an increasingly digital, globalised world, building trust can be difficult. This is particularly true when it comes to supplier relationships. In fact, according to a recent study of 500 SME decision makers by Alibaba.com, building relationships with new suppliers is a daunting prospect for the majority of UK SMEs – almost two-thirds (64%) of UK SME decision-makers surveyed agree that building trust with new suppliers is one of their business’ greatest challenges.
Over the last few months, new disruption in supply chains has once again highlighted the instability of global supply chains. According to the British Chamber of Commerce, 53% of manufacturers and B2C brands, including retailers, were affected. And these delays have serious consequences for businesses. Research from Aldermore revealed 3.3 million (60%) UK SMEs have experienced delays in their supply chains in the last year. Losses on average reached £625,000 in income as a result of these delays, equating to £1.9 billion lost in income. In addition to lost income due to shipping delays, global supply chain challenges – as well as macroeconomic shifts – are causing real, everyday challenges to businesses. In fact, nearly half (47%) of UK SME decision-makers surveyed by Alibaba.com cited inflationary pressures as their biggest challenge, and a further 37% highlighted marketing and customer acquisition. Over a third of SMEs (35%) attributed it to supply chain, sourcing challenges, and stock availability.
These challenges are not expected to go away any time soon. A Deloitte survey of supply chain executives found 44% were anticipating another big shock to the system within two years. To overcome these challenges, and make them even more competitive, 69% of UK SME decision-makers surveyed by Alibaba.com said finding new suppliers was a priority in 2024.
For some, that will mean a focus on nearshoring – the act of relocating supply chains closer to the home market. For others, it may be looking at larger suppliers who have more stable and robust operations that can weather challenges better than others. But, whatever the reason, finding new suppliers who you trust can be a daunting task, particularly as a significant proportion of the industry use outdated methods.
According to Alibaba.com, over half of surveyed SMEs still use catalogues/directories (35%) or trades shows (30%) when sourcing suppliers. Habitual sourcing methods are hard to break, as many SMEs find it easier to build strong and trusted relationships in person. However, with the right resources, SMEs can improve the quality of their suppliers through digital methods – making the overall sourcing process more convenient, personalised, and efficient. One of the easiest ways to embrace digitalisation and innovation is through online B2B marketplaces.
Online marketplaces can enhance trust by providing tools that offer greater transparency. A relationship based on transparency helps manage expectations, close information gaps, and foster trust. For instance, at our March Expo event B2B buyers can connect with quality suppliers across the globe showcasing their factories and product lines through livestreams, and thousands of virtual-reality show rooms. They are a great way for buyers to get to know a supplier, showcase the benefits and quality of their products, tell the story of their operations, and foster relationships based on trust and transparency. This enables new opportunities for buyers to establish a global ecosystem of suppliers seamlessly.
At March Expo 2024, Alibaba.com’s flagship online trade show, SMEs will be exposed to over 2 million ecommerce hot sellers. The trade show seamlessly connects buyers and sellers and offers ample options to find the right partner. This allows allow SMEs to shop around from a virtually limitless number of global suppliers to make more efficient and effective sourcing decisions. To take it one step further and help SMEs source more efficiently, Alibaba’s March Expo is offering more ‘guaranteed services’. This cuts out supplier negotiation and allows businesses to ordering directly from Alibaba.com. This new approach to online sourcing offers B2B buyers guaranteed fixed prices, guaranteed and on-time delivery, and guaranteed, hassle-free refunds.
Building trust among suppliers is essential for the majority of SMEs, as it helps them source the best products, understand their origins, and mitigate supply chain risks. Only through communication, transparency, and authenticity can valued and trusted relationships be between SMEs and suppliers be forged.
