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Over the past couple of years, international trade has been seriously disappointing. Signs are that it will never grow the way it did earlier, staying below the 4 percent growth mark in volume per annum, says the ‘Trade Wars: The Force Weakens’ report by Euler Hermes.
Several things are driving this trend. As millennials turn minimalists, consumers across the world are demanding more services (and experiences) instead of goods. Also, trade financing has become more complex and costly, and political risk and protectionism are on the rise.
But one section has proved to be rather resilient to the headwinds. Micro-multinationals, which are (often young) mid-sized companies with international presence, are leveraging technology to develop their market activities worldwide. More and more ambitious small and mid-sized companies are set to join this club, with many putting overseas expansion on their priority list.
Data from the eBay Marketplace shows micro-multinationals are doing better than traditional SMEs.
Here are five interesting facts:
FACT #1: Micro-multinationals export more: While on an average only 20 percent of traditional small and medium enterprises (SMEs) export, 97 percent of micro-multinationals embrace the adventure of exporting.
FACT #2: Micro-multinationals live longer: The three-year survival rate is just 19 percent for traditional SMEs, while 66 percent of micro-multinationals continue to export after three years.
FACT #3: Micro-multinationals grow faster: Exports on eBay platform increased nearly 19 percent on average per year between 2010 and 2014, while exports of traditional SMEs grew only 6 percent.
FACT #4: Micro-multinationals have better opportunities: Newcomer businesses in the eBay Marketplace are able to capture 55 percent of the export market in just one year, whereas, globally, new traditional SMEs make up just 3 percent of the traditional export market.
FACT #5: Micro-multinationals benefit from better export value distribution: Among traditional SMEs, the top 5 percent of exporters account for a little over three-quarters of the exports market. This is not the case for SMEs using the eBay Marketplace, where the top five percent of micro-multinationals account only for 44 percent of the exports on the eBay platform.
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