Empowering Truly Independent Small Business

At a Glance

eBay champions inclusion, openness, competition, and opportunity for truly independent small and micro-businesses.

Click to learn more. 

The Current Landscape

The European economy is still recovering from the financial and euro crisis. GDP growth is overly concentrated in economic hotspots and these disparities lead to economic and social problems that threaten to worsen. The traditional economic and trade models are failing to address this chronic problem. Without meaningful action to promote geographically inclusive opportunities, large parts of the EU population will not benefit from accelerated growth.

Open Commerce Benefits All

There is clear evidence that open technology-enabled commerce, providing SMEs with dramatically improved access to European and global markets, is truly transformative. It leads to more inclusive growth and spreads economic opportunities more evenly between and within EU member states. The online marketplace enables independent SMEs throughout Europe to overcome the negative economic impacts of being small and remote.

Across the EU, nearly every independent small business using the eBay marketplace engages in international operations. Specifically, 96% of European small businesses on eBay export, serving customers in an average of 22 different countries annually. Comparatively, only 15% of EU companies sell online and no more than 7% of them sell across borders.

The ability to participate in non-local markets is clearly of greatest value to those not located in a privileged local economy. Through participating in the online marketplace, though, SMEs in areas the traditional economy serves less well are empowered.

Digital Technologies Offer Great Opportunities

Some of the aspirations of the EU Digital Single Market Strategy are already being realised in the online marketplace: platform-enabled entrepreneurs and small enterprises are taking advantage of “the great opportunities offered by digital technologies, which know no borders” irrespective of location. 

The online marketplace business model helps independent businesses get access to the kind of support with marketing, traffic, delivery, translation, and technology developments that have previously been out of reach for firms of their size.

Looking towards the future, artificial intelligence-powered applications and the value of big data will become increasingly out of reach for small firms. But marketplace investments into artificial intelligence, machine learning, and mobile commerce, such as by eBay, allow independent small merchants to compete in consumer-driven zero effort commerce.

What’s at Stake?

The inclusive growth potential of marketplace-enabled commerce hinges on a legal and policy framework supportive of independent small business-driven, geographically inclusive, competitive, and open online commerce in Europe. Certain DSM initiatives are at direct odds with such a goal and even seem to contradict that goal. A bias towards maintaining the traditional business models will reinforce the inequalities and disparities of the traditional economy. 

For example, the EU Commission’s Sector Inquiry into e-commerce failed to take measures against contractual restrictions imposed by manufacturers and suppliers that prevent small businesses from reaching customers through online marketplaces.

Furthermore, the recently adopted revision of the EU Value Added Framework will make intra-EU online commerce significantly harder for small businesses that serve a pan-European customer base through online marketplaces.

What Comes Next?

The EU Commission should embrace a vision for European online commerce based on the principle of enabling truly independent small businesses. Valuing the independence of small businesses is just as critical as expanding their opportunities.

Driving marketplaces to take control of the business decisions of small firms using online marketplace services is a dangerous trend that threatens the diversity of businesses and services and concentrates power to a few. Rather than encouraging inclusive growth, this will limit small business internationalization to that of an input in the supply chain of a multinational marketplace. 

As online marketplace-enabled commerce grows and becomes an even more important part of the overall economy, policy makers need to boldly champion inclusion, openness, competition and opportunity for truly independent SMEs.

 

Learn More