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Small businesses engaging in cross-border trade using online platforms such as Amazon, eBay and Facebook face a multitude of problems. mostly due to fake reviews, new research has revealed.
After the busy festive period, small firms are reliant on these online platforms to succeed but are dealing with a number of barriers to growth and trading around the world, new research from the Federation of Small Business (FSB) has revealed.
Small businesses use online platforms for cross-border trade because they help to promote their products in untapped markets at a reduced risk, raise brand awareness, foster consumer trust and reduce the associated costs with internationalisation.
However, over 21 per cent report being held back by fake reviews, while 19 per cent cite sudden changes to terms and conditions as a major worry.
“Digital trade is taking the UK small business community by storm. Businesses are using the online opportunities being offered to them to grow and expand their firms. But huge difficulties lie ahead,” said FSB national chairman Mike Cherry.
Mr Cherry explained that when small firms trade digitally across the world, they are highly exposed to global market forces and disruptions to trade flows. He urged the government to listen to small business about their exporting needs and consider them as part of any response to the ongoing digital trade revolution.
"Domestically, this means having access [to] fast and reliable broadband and mobile coverage across the country, but also requires upskilling employees’ and business owners’ digital skills,” said Mr Cherry.
“Internationally, this will require the government to push to remove barriers to digital trade encountered in overseas markets, such as data localisation measures and weak intellectual property protections, at both the WTO and in the government’s future bilateral trade negotiations.”
At the moment, around 20 per cent of current small business exporters and importers use online platforms to trade internationally. Crucial to small firms are websites like eBay, Amazon and Facebook who are central to advertising, sales and their exporting aims.
Facebook and eBay respond
On Wednesday, the Competitions and Markets Authority (CMA) announced that Facebook and eBay have committed to combating the trade of fake and misleading reviews on their sites.
In response to the CMA highlighting its concerns about the trade of fake and misleading reviews in the summer, Facebook has removed 188 groups and disabled 24 user accounts, and eBay has permanently banned 140 users.
Both organisations have also pledged to put measures in place that will help prevent this type of content from appearing in the future.