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What Alibaba’s ‘Digitization Sprint’ Offers US SMB Manufacturers

With the Covid-19 pandemic putting a massive dent in supply chains everywhere this year, Alibaba is taking the initiative to help more small-to-medium sized manufacturers bring their businesses online. The Chinese e-commerce giant has launched a new “Digitization Sprint” for U.S. SMB manufacturers, a traditionally archaic segment of SMBs that has been digitizing at twice the rate of other industries during the pandemic, according to a new Alibaba study.

Alibaba says the Digitization Sprint helps to accelerate the digitization of these businesses’ online marketing, selling and sourcing and ensure their long-term digital success, and is being offered to qualified manufacturers that employ fewer than 500 staff at no cost.

The program will focus on coaching and community in addition to curriculum, which comes from Alibaba.com’s team, industry leaders and partners on topics ranging from understanding the e-commerce fundamentals like marketplace structure and pricing dynamics to learning tangible skills used online. These skills include leveraging digital advertising to generate leads, taking quality photos for product listings and digital store fronts and even leveraging social media to build their brand and reach new customers.

As part of the coaching portion, the Alibaba.com team is putting together weekly modules and tailored sessions from experts and their ecosystem of collaborators, including the Brooklyn Chamber of Commerce, Brooklyn Navy Yard and manufacturing e-commerce consultant and B2Btail.com founder Curt Anderson, to give manufacturers a four-week masterclass in getting digital and going global.

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Finally, the community will engage through a private LinkedIn group and roundtable discussions with experts and peers for ongoing education and shared experience.

“We were delighted to see in our research that manufacturing businesses are catching on and looking for ways to ride new waves of digital opportunity,” said John Caplan, president of North America and Europe of Alibaba.com. “U.S. manufacturers have huge potential to grow their online business and emerge from this pandemic better positioned for the future. Our first-ever Digitization Sprint will give manufacturers the curriculum, coaching and community they need to accelerate their digital skills and access the $23.9 trillion global B2B e-commerce opportunity.”

The program builds on the recently launched recurring Alibaba.com U.S. online trade shows, which have featured U.S. manufacturers and private-label producers in specific industries exhibiting their products and capabilities virtually to thousands of business buyers.

Citing IBISWorld data that there are 565,537 manufacturing businesses in the U.S., as well as Score data that 98.6 percent of American manufacturing companies are small businesses, with 75.3 percent having fewer than 20 employees, Alibaba sees the program’s massive potential to get an otherwise under-digitized sector up to speed with more e-commerce capabilities that can potentially help them onboard customers, reach new international markets and reduce the need for travel.

Survey reveals U.S. manufacturers are catching on to digital

Alibaba also released the results of its U.S. B2B SMB survey, following up an earlier effort in January. The survey, which shared results from 5,015 decision makers for sourcing or sales of goods to other businesses, showed that SMB manufacturers are surpassing other industries when it comes to digitization.

In fact, amid the pandemic, U.S. manufacturers’ that sell B2B online increased eight percentage points to 41 percent, twice the rate of the overall four percentage-point increase in all industries for the same period and tied with retail as the industries with the greatest digital growth. Retail jumped from 44 percent to 52 percent, distancing itself further from other leaders including arts and entertainment, and finance, insurance or real estate.

This is even more important for manufacturing when taking into account that in December, U.S. manufacturers’ online B2B trade volume lagged all other industries except construction, but have now passed multiple sectors including wholesale, public administration, personal services and hospitality in their pivot to digital.

SMB manufacturers’ digitization investments outpace others as well, with 68 percent saying they hired staff to support online trade, compared to 57 percent of everyone else. They also slightly beat other sectors in e-commerce capabilities via their company website (30 percent to 26 percent), e-commerce capabilities via online marketplaces (27 percent to 22 percent) and new products and services (27 percent to 21 percent).

Alibaba Group indicated that 93 percent of B2B companies are now conducting some portion of their business online, up from 90 percent last December. The level of e-commerce selling is even more promising, jumping from 35 percent of all sales to 43 percent through the period. Forty-two percent of these businesses saw increases in online B2B sales, while 38 percent maintained the same selling volume.

Compared to 10 months ago, e-commerce technologies on the whole are deemed more impactful by SMB B2B manufacturers, with 64 percent saying e-commerce platforms can handle all steps of trade—a significant improvement over the 54 percent that said so last year.

And even with the supply-chain disruptions continuing to be a major theme throughout the pandemic, SMBs are still finding opportunities internationally, as 63 percent of B2B companies report conducting some amount of cross-border B2B trade, even more than the 59 percent in December. Overall, cross-border B2B sales jumped from 17 percent to 25 percent of total sales, with the amount of companies saying they introduced new products faster more than doubling from 16 percent to 33 percent.

However, there is still work to be done as supply chains remain constrained. While 40 percent of respondents say that gaining more customers is a top benefit of selling internationally, this is actually a 22 percent dip from the 51 percent that said this last year. On a similar note, 37 percent cite revenue growth as a major benefit, down 21 percent from the 47 percent last year.