Time-starved Small Businesses Concerned about the Economy in 2013

Seeking Help with Mobile Commerce, Automation, and International Trade

SAN MATEO, CA, January 29, 2013 — While the media continues to report on a recovering economy and job growth, U.S. small businesses remain skeptical about economic growth in 2013.

In a survey conducted by Alibaba.com, Vendio and Auctiva among 600 small businesses in December 2012, 63% of respondents expected the economy to stay the same or worsen in the coming year.

The top concerns for small businesses this year will be taxes (70%) government regulation (50%) and the Affordable Care Act (36%).

Despite their conservative outlook on the economy, these small businesses, 80% of whom are online entrepreneurs, remain generally optimistic about their own opportunities. Nearly half of the respondents expected to grow their business revenues this year.

78% of small business owners said one of their top three tasks in 2013 would be to cut costs and streamline operations to be able to reallocate time and money into new growth areas. Additionally, 87% did not plan to hire additional employees this year, and said they expected to make better progress through increasing the efficiency of existing resources.

When asked about areas of growth, nearly half expect to create a new ecommerce website, 30% expect to import new product lines, and 23% said they would focus more attention on growing their international sales by exporting products.

Key markets for potential export opportunities include the BRIC countries (Brazil, Russia, India, and China), collectively cited by 52% of respondents. The UK was the largest individual country selected by 29% of the English-speaking survey audience. Of the online retailers surveyed who were less optimistic about their global trade opportunities, their key concerns related to trust (39%) and their own expertise (37%). Many of them also said they are too small to trade on a global stage.

However Annie Xu, general manager of Alibaba.com, Americas said small businesses are hardly ever too small to compete in the world market:

"More than at any time US small businesses are empowered to participate in global trades by taking advantage of the resources of big companies through our platform", she said. "Alibaba continues to invest significantly in critical services and infrastructure that simplify global trade and increase trust between trading partners, which enables small businesses to expand more easily through both sourcing and selling products internationally".

Small businesses are seeing the value of building an online brand and have demonstrated more success with their social commerce efforts: 54% described word of mouth as one of their most effective marketing techniques, with social media coming in second at 37%.

Additionally, small businesses want to develop a partnership with Google Shopping, but resource limitations were the primary consideration, with 38% stating they simply "Can't pay for Google traffic".

"Reviewing the data, online merchants remain optimistic about their own growth prospects even in the face of general economic skepticism", said Mike Effle, Vendio CEO. "Increasingly leveraging automation gives these enthusiastic entrepreneurs the opportunity to spend more time engaging customers socially, encouraging referral sales, and focusing on finding new product lines to sell".

Surprisingly, over 80% of the businesses surveyed have not yet optimized their websites for mobile sales, despite widespread media attention noting the sales increases large retailers and marketplaces experienced in 2012 through mobile. Given multiple competing priorities and resource limitations, small businesses cited expertise and cost as key inhibitors to pursuing mobile initiatives.

"Online business owners tell us they are pursuing success in 2013 by getting more efficient with their time and increasing their online professional appearance", said Jeff Schlicht, Auctiva's CEO. "We offer cost-effective tools to accomplish these seller goals, and we look forward to assisting them with their growth throughout the year".

About the Survey:
Two surveys were conducted in December 2012. The survey contained multiple choice questions and is a combined result of the findings from Vendio and Auctiva customers.

  • 80% of small businesses surveyed are online-only businesses.
  • 92% of small businesses surveyed have between 1-5 employees.
  • 82% of small businesses surveyed had 2012 revenues of $50,000 or under.
  • 85% of small businesses surveyed are based in the U.S.



Key takeaways of the survey:

  • 46% of the small businesses surveyed expect to see revenue growth in 2013.
  • Only 37% expected the economy to improve in 2013.
  • 87% will not be hiring any employees this year.
  • Top four concerns/obstacles to business growth in 2013?
    1. Flat economy
    2. Taxes
    3. Cost-cutting
    4. Time
  • Issues affecting small businesses in 2013
    1. Taxes (70%)
    2. Government regulations (50%)
    3. Affordable Care Act (Obamacare) (36%)
    4. Export/import regulations (25%)
  • 59% of small businesses do not plan to conduct any international trade in 2013. When asked why, 39% of small businesses said they .don.t know or trust the overseas suppliers. and 37% of them said they .don.t know how.. Many of them also consider themselves too small.
  • For companies who are interested in exporting, the UK (29%) is their top choice. China and Brazil are tied for second most popular (both represent 15%) and India and Russia are tied for third most popular (both represent 11%).
  • The top 5 ways small businesses plan to expand their business in 2013:
    1. To create a new website (49%)
    2. To import new products (30%)
    3. To export to additional countries (18%)
    4. To build a mobile website (14%)
    5. To build a new location (10%)
  • The top 3 most important tasks for 2013:
    1. Cost reductions, streamlining (78%)
    2. Expand product offerings in different customer segments (75%)
    3. Develop new products (71%)
  • Top 5 most effective marketing tactics in 2012:
    1. Word of mouth (54%)
    2. Social media (Facebook, Twitter, YouTube, etc) (37%)
    3. Online advertising (37%)
    4. Email marketing (31%)
    5. Coupons (13%)
  • Asked whether Google Shopping.s change to paid product search would help their businesses in 2013, 46% said they were not sure at this time if they will use the Google Shopping paid ad search in 2013; 38% don.t have the resources to pay for Google traffic.
  • Asked whether they offer free shipping to their customers whenever a purchase is made, 42% said yes; 31% said no; 14% said no, but plan to start offering free shipping; and 13% don.t plan to offer free shipping.
  • 17% of the small businesses have a mobile-ready website; 60% of them don.t; 14% don.t have the time/expertise to build a mobile site; and 9% think it is too expensive to build and maintain a mobile site.

About Vendio Services, Inc., a division of Alibaba.com

Vendio, an Alibaba.com company (HKSE: 1688) (1688.HK), is a leading e-commerce provider, offering a simple yet powerful Platform that helps merchants manage one set of inventory, orders, and customer information that is automatically synced across Amazon, eBay, their own free Vendio store, and more. Together with Alibaba.com and AliExpress (www.aliexpress.com),Vendio provides merchants everything they need to sell online, from research to sourcing to multichannel selling. Alibaba.com makes it easy for millions of buyers and suppliers around the world to do business, forming a community of more than 53 million registered users in more than 240 countries and regions. Vendio alone has more than 80,000 merchants selling nearly $2 billion in merchandise. Vendio also operates Dealio (www.dealio.com), a shopping and coupons site for consumers. Alibaba.com has offices in more than 60 cities across Greater China, India, Japan, Korea, Europe and the United States including Vendio.s headquarters in San Mateo, CA.