How MSMEs can navigate global crises | Alibaba.com survey

It is no secret that the COVID-19 pandemic had diverse effects on businesses of different sizes and types. In an effort to better understand how businesses fared through this global crisis, Alibaba.com issued a survey to a large pool of B2B suppliers in Q2 2022.

In this article, we will assess some of the findings of this survey, specifically, the data collected about how Micro, Small, and Medium Enterprises (MSMEs) were affected by the pandemic.

Alibaba.com supplier survey overview

The purpose of the recent Alibaba.com supplier survey was to learn more about how businesses around the world were affected by the pandemic.

The survey asked the following questions:

• How many employees do you have in your company？
• Are you a manufacturer, trading company, distributor, or entrepreneur?
• What country are you from?
• How did the pandemic impact your trading business in recent years?
• What did you do to sustain your business during the pandemic?

The survey received over a thousand responses from current and past Alibaba.com users.

Check out our Survey Report to learn more about the survey and its results.

General effects of the pandemic on MSMEs

More than 50% of survey respondents saw their revenue drop by more than half, and 20% shut down completely. However, 10% of users saw their business rise instead of fall.

These outcomes were caused by a variety of things. Lockdowns and restrictions put a major damper on most businesses. Some industries soared while others died out. Some businesses were equipped to navigate a global crisis, and others simply were not.

History tends to repeat itself, so understanding what has worked and not worked in the face of a global crisis is very important. That is why we were particularly interested in diving deeper into the 10% who saw their business rise during the pandemic.

With a little bit of cross-analysis, we were able to identify some patterns that led to success.

Effects of the pandemic by company size

In our survey, respondents could choose the number of employees that they have in order to give us a better idea of the size of their company. The options were 0-10, 10-50, 50-250, and 250+.

We found that small businesses with 0-10 employees felt the harshest effects of the pandemic, and larger businesses with over 250+ had a much more positive outcome. Those with 10-50 and 50-250 employees had very similar results to one another, both falling somewhere between the extremes of the smaller and larger businesses.

With that in mind, let’s break down the stats that showcase the effects of the pandemic by business size.

In small businesses with 0-10 employees, only 12% of these businesses stayed the same, and almost 10% saw a year-on-year increase.

As we mentioned, those who answered 10-50 and 50-250 had very similar results across the board. Almost 13% of businesses with 10-50 employees reported that they remained the same as before the pandemic, and almost 9% reported that their businesses grew. Businesses with 50-250 employees had the same results.

On a more positive note, in larger businesses with over 250+ employees, 22% remained stable, and nearly 18% saw growth during the pandemic.

Effects of the pandemic by business type

The survey also asked respondents what sort of businesses they have. They could choose from manufacturers, trading companies, distributors, and entrepreneurs.

Let’s take a look at how easy of these types of businesses fared through the pandemic.

Distributors were the most likely to have grown during the pandemic. If you are a distributor, you may be lucky to survive the pandemic. Almost 19% stayed stable throughout the pandemic, and 13.5% actually grew.

Trading companies made out the best from the pandemic. They had the lowest percent of shutdowns and the second-highest percent of growth. Just over 16% of trading companies shut down completely. More than a quarter of trading companies had positive results after the pandemic, with nearly 14% staying stable and nearly 12% experiencing growth.

Manufacturer respondents faced some significant downfalls during the pandemic. Only about 22% remained stable or had some sort of growth. They came in last for businesses with growth throughout the pandemic, and almost 78% of them either shut down or had a drop in business.

Entrepreneur respondents were the worst off throughout the pandemic. Over 83% of entrepreneurs were negatively affected by the pandemic. Less than 17% had a positive outcome, with 8% staying stable and under 9% doing better than before.

How MSMEs can navigate global crises

The global B2B trade industry has shifted in more ways than one over the past couple of years. Surviving businesses have gotten creative to ensure their security and success.

Let’s take a look at how businesses have sustained and grown their operations in the face of crisis and beyond.

Exploring e-commerce

If you are not familiar, e-commerce is a business strategy that involves selling products online.

In 2021, global e-commerce reached a value of nearly US $5 trillion, and 73% of that market value was concentrated in the United States and China.¹ The global e-commerce market grew by US $218.53 billion in the United States alone during the first two years of the pandemic.²

These stats accurately represent the massive shift towards e-commerce as a survival mechanism throughout the pandemic. At the start of the pandemic, e-commerce was already fairly well-established in the B2C space, but it was a relatively new experience in the B2B space.

E-commerce made it possible for B2B traders to continue to carry out deals even when buyers and sellers couldn’t meet in person at conferences, warehouses, and so forth. It has also eliminated the need for travel since people can make purchases from online marketplaces without leaving their offices or homes.

Whether you’re grasping for a survival plan or you’re looking to grow and scale your business, e-commerce is an important strategy to implement.

Investing in R&D

Investing in R&D is another survival mechanism that businesses implemented to stay afloat during the pandemic. Typically businesses invest in R&D to improve their offering in terms of functionality, appearance, or any other optimizable aspect.

Cutting costs

Businesses that are looking to raise their bottom line must either increase their revenue or decrease their expenses.

Many B2B sellers have cut costs in order to survive. Some ways that businesses have cut costs include laying off employees, cutting employee benefits, optimizing operations, canceling non-essential subscriptions, and budget-conscious buying.

Expanding sales channels

We mentioned implementing e-commerce strategies as a way to facilitate more sales, but that is just one move B2B traders can make to expand their sales strategies.

Some popular channels that you can add to your sales strategy include social selling, direct-to-consumer selling, and live commerce. By being present on multiple channels, you can expand your reach, improve your lead generation, and boost your sales.

Growth through the pandemic

As we mentioned, our survey had a greater number of responses from MSMEs in a few countries. The great response from specific countries like India and Pakistan shows the prevalence of B2B E-commerce in the support of their B2B trade.

With that said, let’s take a close look at some success stories from B2B sellers in India and Pakistan.

MSME success in India

Shri Krishna International is an India-based manufacturing business that used Alibaba.com to grow its business by 10 times. It was started by a father who eventually brought his daughter on board to maintain the family operation.

This business started with the goal of manufacturing products for local Indian businesses to sell in their shops.

After about a decade, the Shri Krishna International team realized that some of their buyers were flipping the products in the export market and making a sizable profit. Upon learning this, they knew that they had to get into the international market to level up.

A few years went by and the company struggled to break into exporting as a new supplier. Fortunately, the team found Alibaba.com and decided to leverage the marketplace to connect with international buyers.

Since Shri Krishna International started using Alibaba.com in 2014, they have started selling in more than 20 countries around the world, and their shop has over 10,000 products listed on Alibaba.com. They’ve also expanded their team from 5 to 120 members.

MSME success in Pakistan

S. A Sports is a sports manufacturing company in Pakistan that was started by a professor, Saad Ahmed Minha, who recognized a demand in his hometown that was transforming into an export hub.

In his journey to find a partner that was well-versed in international trade, Saad discovered Alibaba.com. The platform filled the role of the partner he was looking for. He was confident that online trade was the future, which was another perk to Alibaba.com.

In just two years, Saad was able to grow his business beyond what he had ever imagined. He has over 1300 products in the Alibaba.com marketplace, and he has a steady stream of monthly inquiries. Even though he started as an exporter, he has shifted to manufacturing.

Saad’s story showcases the fact that even a man with no prior business experience can find success on Alibaba.com.

Sell on Alibaba.com

E-commerce is more valuable now than it’s ever been before. This type of business model helped many businesses navigate the roadblocks that were born of COVID-19.

Alibaba.com is a B2B e-commerce platform that helps wholesalers and distributors connect with buyers from around the world. This marketplace is one of the largest in the world, making it easy for sellers to connect with plenty of leads.

Sign up for Alibaba.com to start selling in no time.