How digital trade can empower SMEs in less developed countries

Digital trade is revolutionising international commerce by making it more inclusive and accessible for SMEs in developing countries. This transformation enables these businesses to overcome traditional barriers and participate in the global market more effectively. Karl Miville de Chêne, Partner at Contacts Monde, which provides consulting services, explores how digital trade can empower SMEs, drawing insights from the OECD’s report Making Digital Trade Work for All and providing practical strategies for harnessing these opportunities.

Several SMEs in less developed countries have successfully leveraged digital trade to expand their businesses:

A small fashion brand in Kenya that has successfully utilised online marketplaces to sell its products internationally is Thrift Social Nairobi. This fashion collective leverages social media platforms like Instagram and Facebook to reach global audiences. By showcasing unique and culturally rich fashion items, Thrift Social Nairobi has managed to attract international customers, effectively utilising digital tools to enhance visibility and sales.

How Thrift Social Nairobi succeeded

1. Utilising social media: Thrift Social Nairobi uses YouTube, Instagram and Facebook Shops to display its products, allowing it to reach a broader audience without the need for a physical store. These platforms offer user-friendly interfaces and integration with e-commerce functionalities, which are essential for small businesses aiming to go global​.
2. Optimising product listings: The brand creates compelling product descriptions and high-quality images to attract potential buyers. They focus on highlighting the unique features and cultural significance of their products, which appeals to an international market looking for distinctive fashion items.
3. Engaging with customers: Through active engagement on social media, Thrift Social Nairobi maintains strong relationships with its customers. This includes responding promptly to enquiries, showcasing customer testimonials and regularly updating their followers with new product launches and behind-the-scenes content.
4. Leveraging online marketplaces: Besides social media, platforms like Jumia and Shopify have been pivotal. These e-commerce platforms provide the necessary infrastructure for listing products, managing orders and handling payments, making it easier for small businesses to scale up operations.

Lessons for other SMEs

• Invest in digital skills: Training on digital marketing and e-commerce tools is crucial for maximising online sales
• Choose the right platforms: Depending on the target audience, selecting the appropriate online marketplaces can make a significant difference
• Consistency and quality: Regular updates and maintaining high standards for product presentation are essential to attract and retain customers

By adopting these strategies, SMEs in developing countries can harness the power of digital trade to expand their reach and increase their profitability on the global stage.

Policy recommendations

To fully harness the potential of digital trade, policymakers should consider the following recommendations:

1. Invest in digital infrastructure: Prioritise the development of robust digital infrastructure, including high-speed Internet and digital tools, to support SMEs’ participation in digital trade.

2. Simplify trade regulations: Streamline and harmonise trade regulations to reduce barriers and facilitate easier cross-border transactions for SMEs.

3. Promote digital literacy: Implement training programmes to enhance digital skills among SME owners and their workforce, enabling them to effectively utilise digital platforms.

4. Support digital platforms: Encourage the development and adoption of digital platforms that connect SMEs with global markets, providing them with the tools and resources needed to succeed.

5. Foster international cooperation: Strengthen international collaboration on digital trade policies to create a supportive and coherent global trading environment.

Conclusion

Digital trade offers a transformative opportunity for SMEs in less developed countries, enabling them to overcome traditional barriers and participate more actively in the global market. By addressing challenges related to digital infrastructure, regulatory barriers and digital skills, these businesses can unlock significant growth potential. Policymakers and international organisations play a crucial role in supporting this transition, ensuring that digital trade works for all.