European Small Online Business Trade Summary 2015
In recent years, technology has ensured more equal economic opportunities for small and medium sized businesses (SMBs). Since 2011, the eBay Public Policy Lab and a team of economists at Sidley Austin LLP have been working together to examine how globalisation and technology is liberating the ambitions of SMBs.
This report presents new findings coming out of this collaboration, exploring what is nothing short of a trade revolution and the impact this is having across the EU. It will also show how the economic activity of small online companies is emerging across the continent’s regions – Sidley economists have measured the “Digital Density” of the EU’s regions by assessing the number of small businesses on eBay alongside their location and volume of sales.
The research results show that small online businesses on eBay across Europe are exporting to more countries than ever before, both in Europe and beyond, gaining market share more quickly, and showing better resilience in the face of tough trading conditions, than small businesses that are offline. They are effectively Small Global Traders.
Technology is reducing barriers to global markets by allowing these eBay SMBs access to services that were once the preserve of large firms, such as smart shipping, international payments and translation. This is allowing small businesses to compete with larger firms, and reducing the dominance of bigger firms on the marketplace.
The analysis carried out by Sidley Austin for this report is based on data covering transactions on the eBay Marketplace in Europe from 2010 to 2014. Sidley economists conducted econometric and statistical research based on a number of datasets covering eBay marketplace transactions and small online businesses on eBay in the EU and globally. To ensure that the community of small commercial enterprises on eBay was properly captured, the team limited the data to transactions by sellers with sales of more than $10,000 (approximately €9000) annually on the eBay marketplace. These are called “Commercial Sellers”, or small online businesses. Sometimes, for short they are referred to as eBay SMBs. To allow for comparisons with “traditional” SMBs, i.e., regular brick-and-mortar companies, Sidley has used data from publicly available sources, including from the World Bank, UN Comtrade, Eurostat, and various statistical agencies within Member States.
Technology is ensuring Europe’s SMBs are truly European, and even global, from birth. These new businesses are trading within the EU and with the rest of the world, accelerating the integration of the EU’s internal market and its more than 270 regions. In 40% of EU regions, every small business on eBay is leveraging the eBay Marketplace to export internationally. Thanks to technology, businesses do not need to be located in Europe’s most wealthy countries, in its major capitals or most prosperous regions – entrepreneurs are no longer tied to any particular geography. For instance, since 2011, more than 130,000 new digital small businesses have emerged, with sales of nearly €18.5bn.
As in eBay’s previous reports, the eBay Marketplace provides the illustration of a new model for trade that is emerging, one that increases the prospects for more broadbased growth. These findings allow for wider conclusions about trade and growth that go far beyond eBay itself.