SMEs should leverage on E- Solutions to Integrate with Global Value Chains
Under the Patronage of the Prime Minister of Qatar and in attendance of H.E Sheikh Ahmed bin Jassim bin Mohammad Al-Thani, Minister of Economy and Commerce, the Qatar Chamber’s 2nd SME Conference was held on 17th and 18th January 2017 at the Ritz Carlton, Doha.
Dr. R. Seetharaman, CEO of Doha Bank participated in the panel discussion “E-Commerce as a tool for better SME integration into Global Value Chains” on 17th January 2017. He highlighted the differences between E-commerce vs Digital trade. He said “The digital economy has enabled trade in goods and services that are still being produced in essentially the same way, but where trade costs have fallen through the use of the Internet, this is known as e- commerce. The trade itself is happening through digital channels, and where the goods and services concerned are “embodied” in digital form. This can be thought of as “digital trade.” SMEs – using e-trade and digital platforms outperform traditional exporters. E- trade is enabled for SMEs through digital channels by digital trade finance. Doha Sooq which follows the e- commerce model remains the first site of its kind in Qatar that offers online shopping and delivery of items anywhere in Qatar.”
Dr. R. Seetharaman gave insight on digital trade finance. He said “Trade is going digital and companies are set to reap huge benefits, avoiding lengthy delays while papers get physically checked, stamped and transported between parties. Online trade finance portals, as well as competition from nonbank providers in trade document management and supply chain finance, have forced banks to up their game. A number of product innovations, including new instruments such as the bank payment obligation, have facilitated the development of more streamlined, automated trade settlement for multinationals.”
Dr. R. Seetharaman highlighted on SME trade finance. He said “GCC Regional Banks offer a range of trade finance services, from traditional trade financing to more advanced solutions such as structured trade financing that enable the purchase and sale of goods on an international scale. SMEs play an integral role in international trade and their wellbeing is essential to promoting economic development in a sustainable fashion. Banks are also seen investing in increased awareness, enhanced end-to-end customer experiences, renewed technologies and improved transparency through active data management, ultimately leading to productive solutions for their SME clients.”
Dr. R. Seetharaman gave insight on e- trade scenario for SMEs. He said “SMEs that use the internet extensively tend to export more as much by export value when compared to SMEs that use the internet sparingly, and they tend to reach a larger number of countries. SMEs that export generally enjoy higher productivity, better wages and are more innovative, because they are exposed to competition, best practices, new technologies and higher-quality products. E-Trade brings all of these benefits one step closer to SMEs, because it offers market access to an unprecedented number of customers and lowers the costs of cross-border trade. SMEs should leverage on e- solutions to integrate with Global value chains.”
Dr. R. Seetharaman highlighted on challenges for SME in e-trade. He said “Capturing the e-trading opportunity requires appropriate skills, a conducive legal and regulatory environment, a means of electronic payments, reliable transport and logistics services, and data management which are not available to all. SMEs tend to find it harder than large firms to keep up with technological change, because they employ fewer technical specialists and lack the financial resources that are needed to continually upgrade technology. The main elements obstructing SME companies from leveraging ecommerce are their lack of e-skills and ecommerce capabilities, such as marketing abroad. A new initiative, the Global Fund for Ecommerce, could play a critical role in bringing developing country entrepreneurs into the digital era. By bringing together public- and private-sector support for digital trade, the Global Fund for Ecommerce could help developing country entrepreneurs go global.“