A new study has found that 73% of small to medium-sized businesses (SMBs) in the Asia Pacific (APAC) region believe global expansion would make their business more resilient to external events and disruptions. It noted, however, that only 13% make globalization a top business goal.
SMBs may be interested in entering new markets, but they have different priorities. These include increasing revenue growth (53%) and profitability (39%), and improving customer satisfaction (43%). Expanding their customer base (30%) rounded out the list of top concerns.
This data was gathered by Payoneer in its inaugural SMB Ambitions Barometer report. The leading cross-border payments platform surveyed 3,575 businesses across 15 international markets to find out their thoughts on global expansion, their ambitions, and how they plan to achieve them.
“Going beyond borders presents a world of growth opportunities, untapped markets, and diverse talent. Those who dare to leave their comfort zones create a better future for themselves, their community, and the economy,” says Monique Avila, Payoneer’s Country Manager for the Philippines & Other SEA.
The potential for global expansion
SMBs in APAC are on track for global expansion. Their customers (57% domestic vs. 43% international) and vendors (60% domestic vs. 40% international) are mostly local, but this split is expected to even out in the next two years.
Those who are already operating internationally have reaped the benefits of today’s global economy.
Payoneer found that revenue earned from exports grew from an average of 52% in 2021 to 61% in 2022. This is expected to continue growing to an average of 69% in 2023. In the Philippines, SMBs are expected to enjoy a 16% increase in revenue growth from exports. They are also one of the most optimistic about their business outlook.
Challenges and disruptions
SMBs know the benefits of global expansion but they face barriers. Businesses in APAC are more likely than others to have been hurt by global events in the past two years. This is particularly true for the Philippines, which is among the most negatively impacted by these events.
Global supply chain disruptions remain a top concern. Cross-border trade is another challenge with issues related to foreign exchange rates, slow transaction times, international trade compliance requirements, lack of choice in payment options, regulatory and compliance costs, fraud and weak security practices, and more.
SMBs in APAC also face problems breaking into geographic markets due to external events and disruptions, legal compliance, securing capital, and talent acquisition. There is also an increase in freelance and gig work due to COVID-19, which has increased competition for their company.
Due to these experiences, 64% of SMBs in APAC are more likely than others to agree that most payment solutions are tailored to large corporations. It is difficult to find a payment solution that meets the unique needs of their company (51%).
The world’s go-to partner for digital commerce, everywhere
The SMB Ambitions Barometer report notes that there is great potential for businesses around the world to develop. Although SMBs face challenges and external economic forces, they must be supported to thrive in the cross-border economy.
“We remain committed to empowering SMBs in the Philippines. Our products, services, and expertise are tailored to meet their unique needs so they can unlock their full potential on the global stage. Together, we can create a future where every business owner can succeed internationally, achieve tremendous growth, and make a lasting impact,” ends Avila.