Digital payment firm Payoneer has released its second annual study, which surveyed nearly 3,800 SMEs across 15 countries including the Philippines in early 2024 to gauge the factors critical to their growth.
“We are seeing unprecedented global growth opportunities for the world’s entrepreneurs and small businesses, who are leading a new wave of globalization,” said John Caplan, CEO of Payoneer.
“Forty-six percent of SMEs we surveyed are reporting that their customer base is international, up four points from last year. At the same time, SMEs are facing an ever-growing number of macro challenges and are preparing to drive efficiencies by adopting Al technologies, partnering with more vendors, and breaking into new trade corridors.”
Key themes emerging from this year’s report:
- SMEs are turning to Al-powered tools and working with more vendors to support growth ambitions: A majority of surveyed SMEs are planning to use or are currently piloting Al to help with customer service (62%), merchandising (64%), inventory management (62%), content creation (62%), competition analysis (64%), and supply chains (63%). On the supply chain side, SMEs are diversifying their supply chain, working with 29 vendors (including law firms and marketing agencies) on average, up from 21 two years ago, in a proactive response to macro events. For Philippine-based SMEs, 63% agreed that a diverse and global network of vendors helps protect them from global disruptions; this belief is also echoed by SMEs in other markets.
- SMEs are expanding their customer base by growing into new trade corridors: Two in five SMEs (40%) are prioritizing Europe and Central Asia to grow their customer base over the next five years, up from 33% in 2023. The top reasons respondents are planning to expand into these areas are business/revenue opportunities (45%), meeting customer demand (38%), and regional proximity (37%). This is part of a larger trade diversification trend, where ongoing trade tensions between China and North America have made doing business more complicated.
On the other hand, while entering new markets is top of mind among Philippine SMEs, hiring local talent remains to be a priority.
In fact, 86% of Filipino SMEs are prioritizing local talent, allowing them to reap the rewards of globalization and at the same time boost local economies.
In the Philippines, most (93%) SMEs are confident in their organization’s ability to increase its revenue over the next 12 months, and 90% expect the health of their local economies to improve.
- Going global means overcoming obstacles — and SMEs are readying for the challenge: For businesses in the Philippines, some (38%) have cited brand awareness and marketing as top challenges to expanding in new markets but with the right talent and technology, local SMEs are finding these challenges manageable. In fact, 46% of SMEs surveyed in the Philippines say digitization has lowered barriers to entering the global market.
- However, amid these market expansion plans, more than 40% of total respondents say they are unprepared for global events such as geopolitical conflicts, product boycotts, and trade wars, up from 36% in 2023. Cybersecurity threats are also top of mind: since 2023, reducing cybersecurity risk is 63% more likely to be a key business goal for SMEs (8% in 2023 vs. 13% in 2024).
“The opportunity for SMEs to unlock growth from accessing global demand is enormous,” said Bea Ordonez, CFO of Payoneer.
“Our research shows that SMEs continue to expand their businesses across borders, extending their reach into new markets and trade corridors. To do this, SMEs are embracing digitization and innovation and working with a range of technology enabled vendors and partners who can empower and facilitate their global ambitions.”
