E-commerce and online marketplaces like Amazon and Rakuten have opened up a world of opportunities for budding entrepreneurs. Marketplaces in particular have created a new digital economy where any business can trade across countries and continents and global businesses can be made in makeshift offices set around the kitchen table or a spare bedroom. All you need to become a Global CEO these days is access to Wi-Fi and an Amazon account.
The Sofa CEO is an outward looking entrepreneur continuously leveraging technology and digital marketplaces to create their own international enterprise, one that can compete with larger businesses because of the level playing field marketplaces like Amazon create. From their own front room, a new generation of traders is bucking the anti-globalisation trend selling everything from shuttlecocks to USB sticks to eager customers all over the world.
The global e-commerce market is coming of age. A United Nations report on global e-commerce sales recently revealed that worldwide B2C sales topped US$1,589 billion in 2014 and is forecast to nearly treble to US$3,394 billion by 2020. And the Sofa CEO is in pole position to take advantage.
At WorldFirst, we’re proud to support thousands of online sellers who have found international success by trading on online marketplaces, reaching the digitally-savvy consumers who flock to platforms like Amazon, eBay and Etsy to get the product they need within a few clicks.
It’s worth remembering that many of these businesses are sole traders or family run, big on ambition but light on staff. Many will employ just a few people to help with all aspects of operating an international enterprise, taking on the roles of accountant, tax planner, shipping and logistics operator and customer service adviser as well.
They’re able to do this because of the impact technology has had in reshaping these industries with bespoke financial advice and accounting software available to everyone at great value, and the logistics industry making inroads to cater for the movement of goods across borders safely, quickly and affordable.
However, one aspect of international trading seemingly lags behind; international payments. International banking remains difficult, complicated, expensive and time intensive for many small businesses. Ultimately, for online marketplace sellers, this can stifle their ability to grow.
For example, online sellers trying to trade on one of Amazon’s international sites and reach new customers have to provide a bank account number for the country they are trying to sell into – in other words, sell into the US and you’ll need to provide details of a US bank account. That can be a very time consuming and expensive process. For some, it can be impossible.
By being unable to open in country bank accounts, businesses have to pay unnecessary fees with every transfers and can often find it difficult to manage their cash flow for supplier payments. Larger businesses are able to get round this as they can spend time and money opening branches or correspondence addresses in their chosen markets, as well as liaise with regulators easily. They therefore have complete control over how they manage their international payments.
However, at the moment, SMEs and Sofa CEOs don’t have access to the same financial networks as larger companies. This not only frustrates them but also reduces the positive impact they can have on the economy as a whole.
The FinTech industry is starting to provide solutions to these issues. WorldFirst recently launched a brand new platform – World Account – to address the dearth of international banking solutions for the agile retailers who may be small in size but big in reach and ambition. We think these businesses should be focusing on their business, not agonising over the unnecessarily complex business of moving money around the world.
World Account makes it easy to manage funds in and payments out, all from one easy-to-use platform. This will give them the ability to scale more rapidly over time.
A number of other companies in our sector have also launched their own offerings in recent months and it seems that the industry is starting to meet the growing demand from entrepreneurs for these financial tools. This competition will also drive innovation forward faster benefitting this new generation of businesses with global ambitions.
As we lead up to exiting the European Union and begin building new trade links across the globe, it is crucial that both the government and the FinTech industry ensure that technology-enhanced financial tools, like the World Account, are accessible. In the long run, this will support the growth of SMEs and Sofa CEOs trading on e-commerce sites and allow them to flourish and become the next generation of boardroom CEOs.
Jonathan Quin is the CEO of WorldFirst.