Alliance for eTrade Development: Expanding Developing Country Small Businesses' Use of Online Platforms for Trade

Using global ecommerce and payment platforms such as eBay, Etsy, PayPal, Alibaba, and Mercado Libre to connect to tens of millions of online buyers, small businesses are highly likely to export, export to multiple markets, and derive most of their revenue from exports – as opposed to traditional brick-and-mortar businesses of which only a small minority export. Developing country governments are increasingly cognizant of the opportunity to use ecommerce platforms to help SMEs export and import goods and services, and to fuel inclusive growth in their economies. Many governments are also gaining an understanding of the challenges SMEs in their countries face to access and use online platforms for trade. And governments tend to be aware of the types of policies that can help SMEs use platforms to engage in trade, such as digital regulations that promote innovation and protect consumers, trade facilitation practices that accelerate customs clearance, and export promotion practices that build SMEs' capacity for succeeding at ecommerce. However, developing country governments still tend to lack an understanding of the state of platform-enabled trade and SMEs' use of platforms for trade in their economies, and the potential for different policies to increase this usage. They also lack knowledge about the types of regulations, policies, and practices that help SMEs use platforms for trade, such as various digital regulations essential for the online economy to work, online payment laws and practices that fuel cross-border payments, postal services that accelerate ecommerce deliveries, and ecommerce export promotion programs and financing programs that support SMEs in becoming online sellers. The purpose of this report is to help mend these knowledge gaps. The report is produced in a public-private partnership "Alliance for eTrade Development" between USAID and four companies (PayPal, Google, King & Spalding, and eBay), and aimed to offer developing country policymakers new, proprietary data on the growth of platform-enabled trade in goods and services and SMEs' use of platforms to trade in various economies around the world. The report provides a compilation of 60 "best practice" regulations, policies, and practices that help SMEs use online platforms for trade in six main policy areas – digital regulations, payment regulations, digital infrastructures, SME finance, SME export promotion, and ecommerce logistics and trade facilitation. The report also pioneers the mapping of the adoption of these 60 policies and practices in 40 countries in Africa, Asia, Europe, Latin America, and North America. A new composite policy index, Policy Index for Platform-Enabled Trade, is introduced, based on the qualitative mapping and enables countries to track and measure their adoption of these 60 policies vis-à-vis the adoption by their peers. The report also includes case studies and several brief summaries of innovative policies and practices in advanced and developing countries to fuel digitization and trade on platforms. Econometric analysis of the impact of different policies on the growth of platform-enabled trade and the number of platform sellers around the world is conducted. A policy roadmap for catalyzing SMEs' use of platforms for trade, tailored to countries' unique starting points and needs, is also provided. The report aims to help developing country governments make informed decisions about policies and practices that can help SMEs use online platforms for trade, and to track their progress over time.