SMEs will drive e-commerce growth in the UK, but connectivity problems and cybercrime must be addressed before this growth can be fully realised, according to a panel of industry and government experts.
Convened at the 2014 Parliament & Internet Conference attended by V3, the panel described how the internet allows people to find niche products, thereby feeding the growth of SMEs that provide those specialist products.
James Hardy, former director for Europe at Chinese e-commerce giant Alibaba, explained that the online market can support many businesses targeting a diverse range of consumers, ideal for SMEs looking to establish themselves.
"We are now living in an era of extreme fragmentation across all elements of business, and this is everything to do with what's happening in the internet," he said.
Hardy cited an example of needing to find products for a three-legged dog as an example of the specialism that small businesses can cater for thanks to the audience reach enabled by the internet.
He also explained how the internet is facilitating different funding channels for small businesses. Crowd funding models, such as Kickstarter, enable SMEs to go straight to market with products that might otherwise take years to develop.
As such, Hardy believes that the fragmentation in companies supplying products, and consumers purchasing them, can only increase.
Another factor boosting SME's changes of digital success is the rise in mobile commerce, according to Allister McGowan, head of government relations at eBay.
He said mobile devices are significantly accelerating e-commerce as they effectively "put a store in your pocket" and erode the idea that e-commerce and traditional commerce are separate.
"You see the boundaries between online and offline blurring. It becomes almost meaningless to talk about e-commerce and traditional commerce - there really is just commerce," said McGowan.
However, Mike Cherry, said the lack of uniform broadband connectivity across the UK needs to be addressed as it plays a major part in promoting the growth of SMEs.
"Broadband is an essential utility for business and should be seen in no different way to water, gas or electricity," he said.
This echoes a report by the FSB from July when it called on the government to revise its policy of providing a basic speed of 2Mbps to all premises in the UK to 10Mbps 2018-19.
Cherry said that a failure to provide stable and high-speed broadband speeds could stifle e-commerce growth and adversely affect overall commercial growth in the UK.
He also stressed that cybercrime is costing small businesses £800m a year, and that "prevention and awareness" of cyber security is a core part of tackling such a problem.
Businesses should also be able to report cybercrime in the same way they report physical crime so that the appropriate resources can be allocated to tackling the problem, according to Cherry.
While cybercrime is a financial cost for small businesses, it has wider repercussions for the UK. Half of UK citizens revealed in a recent survey that they had been affected by cyber crime financially and emotionally.
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