A study developed by Implement Consulting together with IPSOS, and commissioned by Amazon, has found that 86% of French small and medium-sized enterprises (SME) consider access to the Single Market as essential for their business.

The study shows the importance of the Single Market for the success of France’s SMEs, with 60% of their exports being directed to the Single Market [1]. The study of 386 French SMEs showed that 69% of them highlighted regulatory differences between Member States to be a limit to their development in the Single Market. It also found that 85% of French SMEs believe that a greater use of digital tools can help them sell more within the Single Market. 

The study points out that concrete policy actions – such as regulatory simplification and harmonisation among EU Member States – are needed to unlock the full potential of the European Single Market. It highlights how eliminating existing barriers in the Single Market due to the incomplete implementation of EU rules would result in a continuous increase of 0.6% in French GDP per capita, as well as an increased production of goods and services that could lead to the creation of 160,000 additional jobs [2].

SMEs are the backbone of France's business fabric and economy, representing 99.8% of all companies, 42% of the country's GDP, and 52% of total private sector employment [3]. In this context, accessing the European Single Market and benefiting from the free movement of goods and services is crucial.

Nikolaj Tranholm-Mikkelsen, consultant at Implement Consulting, said: "On its 30th anniversary, the Single Market remains the driving force behind the EU's society and economy. To maintain its significance for EU competitiveness, it is crucial to continue removing barriers and promoting integration. This report accurately captures the call to action from French SMEs, who emphasise the need to simplify and streamline European policies. This will enable them to fully leverage the potential of the Single Market and compete globally."

Furthermore, during the presentation of the report, Patrick Labarre, Amazon’s Director of Marketplace for France, pointed out the importance of the Single Market: "SMEs play a fundamental role in the French business fabric. They drive innovation, employment and economic growth. We are proud to facilitate access to the Single Market for European SMEs, including French SMEs, by connecting them with customers across Europe. Through our standardised solutions, prepaid services, and cloud solutions, we make it easier for European SMEs to harness the full potential of the Single Market and enable them to sell internationally. In 2022, around 16,000 French SMEs that sold through Amazon broke records with €750 million export sales."

Pierre Wellhoff, Director of the eExport solutions department at Business France (the public agency in charge of France's economic attractiveness and the international development of French SMEs) highlighted the importance of digital in the internationalisation of French SMEs: “In a dedicated government plan presented on August 31st 2023 by Olivier Becht, Minister Delegate for foreign trade, attractiveness and the French abroad, two of the thirteen measures proposed are related to e-commerce: firstly, to strengthen the Business France marketplace, and secondly, to help companies prepare for e-commerce with solutions such as the ones offered by Amazon. Exporting is a major economic challenge: six million jobs depend on it, i.e. 22% of the French working population. We want to leverage the opportunities offered by e-commerce to support SMEs’ internationalisation.”

Bringing the Single Market closer to SMEs

The study highlights the need for harmonisation in applying rules that consider SME needs, showing that eliminating border barriers benefits them. SMEs generally have fewer resources and capital to face regulatory burdens and administrative requirements, which ultimately discourage them from developing their activities abroad due to higher costs.

Lucas Pinos, co-founder and CEO of Novoma, a Toulouse-based food supplement company, explains: “E-commerce has been a real growth lever for our company. It has allowed us to expand our business horizons wider than we could have expected, throughout France as well as internationally, especially in the European Union. Still, we have faced several challenges when launching our products in a new European market, especially because of a different application of the same EU regulation from one country to another.”

According to Xavier Flamand, Amazon’s Vice President of EU Seller Services, “This study shows that regulatory and bureaucratic complexity is limiting the opportunities for Europe’s small and medium-sized businesses to take advantage of everything the Single Market offers. At Amazon, we believe that a strong, inclusive, and sustainable European Single Market is the winning recipe for the growth of European competitiveness, and we want to play our part in strengthening it. In 2022, we invested over €8 billion in logistics, services, tools and training across Europe to help the 125,000 EU-based SMEs selling on Amazon to unlock their digital potential. More than seven in ten of those SMEs generated intra-EU sales totalling more than €9.8 billion – showing just how important supporting their success is to Europe’s economies.”

Digitalisation promotes internationalisation

The study also highlights digitalisation's vital role in enabling SMEs to boost growth and generate employment opportunities. By adopting digital technologies, SMEs can better operate in international markets, streamline operations, and improve export capabilities. Nonetheless, the study shows that French SMEs are behind their EU counterparts in terms of e-commerce adoption, with 12% selling online compared to the European average of 18%, according to the Digital Intensity Index.

Julian Grimau, co-founder of Bananair, a Lyon-based SME that sells giant beanbags and stuffed animals, said: “E-commerce has allowed our company to grow quickly, in France and abroad. Today, we sell in around ten European countries. We generate 50% of our turnover internationally, including 80% on Amazon.”

Proposals to strengthen the role of SMEs in the Single Market

The report highlights 11 recommendations to strengthen the effective functioning of the Single Market and its positive impact on French SMEs, including:

  •  Adopting an ambitious strategy that positions the Single Market at the forefront of the EU's integration, ecological transition, and innovation.
  • Creating a single VAT ID and extending the VAT one-stop-shop to cover all goods transactions.
  • Recognising digital labelling as a true substitute for physical labelling, to respond to the increased demand for transparency on products.

As the study shows, the Single Market has provided an attractive and stable environment for European companies for the last 30 years, and has been key to the success of SMEs. It has allowed companies to grow, offering more options to consumers, and ensuring that the European economy remains productive and competitive. However, more rigorous harmonisation and application are needed to enable the Single Market to achieve its full potential, especially regarding SMEs.

[1] Eurostat (2023). Trade by NACE Rev. 2 activity and enterprise size class [EXT_TEC01]. Note: data only available for intra-EU exports. The calculation therefore excludes exports to Norway, Liechtenstein, and Iceland.
[2] European Parliament Research Service (2014). The Cost of Non-Europe in the Single Market and European Commission (2020): A Single Market that works for business and consumers.
[3] Commission européenne (2023). 2023 SME country fact sheet.