Tag: Small businesses

Manila, Philippines – Small businesses in the Philippines are the most bullish compared to its counterparts in the Asia-Pacific region, with nearly nine of ten SMBs expected to grow this year due to technology investment. This is according to the latest data from professional accounting body CPA Australia.

According to the data, three quarters of Filipino small businesses grew in 2022, an increase of 10 percentage points from 2021. A robust economy contributed to 89% predicting growth this year. This optimism is reflected in plans of around 58% of local businesses to hire more staff this year.

A strong focus on maintaining customer relationships and using social media contributed to growth. Around 44% of businesses nominated customer loyalty as a positive factor. Meanwhile, over 90% used social media for business purposes, including promoting to potential customers (65%) and selling products or services (59%).

The data also remarked that Filipino small businesses’ ability to identify the right technologies to invest in and profit from further strengthened their competitiveness. Seven-in-10 of businesses said their investments last year had improved profitability, strongly surpassing the survey average of 55%.

Nonetheless, increasing costs and difficulties accessing external funds may hamper financial returns and development plans. Four-in-10 businesses said increased costs were negatively affecting their businesses, the highest result in all surveyed markets. The cost of materials (42%) ranked as the cost most felt by local businesses, followed by fuel (38%) and utilities (36%).

Nicklaus Wee, regional manager for emerging markets, said, “Due to increasing domestic demand and a speedy recovery in the services sector, particularly in tourism, many Filipino small businesses expanded solidly. They continue to be one of the most dynamic in the Asia-Pacific region.”

He added, “The COVID pandemic has fundamentally changed consumer behaviour. The survey shows that Filipino small businesses are adopting a more customer-oriented approach, including increasing their interaction with potential customers. Using customer feedback allows them to swiftly identify the best options, including technological solutions to meet customers’ needs.”

Singapore – Dating and social networking app Bumble has teamed up with 13 local small businesses in Singapore to launch its ‘Date Do What’ campaign. Said initiative aims to ease the burden of planning for dates through partnerships with local businesses.

The campaign gives app users the opportunity to connect with others in real life and over a shared experience for 3 months from 4 July up until the end of September this year.

Through this collaboration, Bumble hopes to make dating fun and easy for people who are looking to make new connections through the app by providing them with over 13 activities or dining options to choose from, with exclusive discounts and packages curated specially for the Bumble community. 

According to Lucille McCart, Bumble’s APAC Director, of the 13 local businesses they are collaborating with for this campaign, more than half are women-owned or women-led, which was really important to them when developing this campaign and is just one more example of how the app is committed to empowering women in Singapore and across the globe.

“Bumble exists to empower new connections and foster healthy and equal relationships. Now more than ever, singles are eager to connect in-person as pandemic restrictions are being lifted in Singapore and around the world. Our partnership with local small businesses through ‘Date Do What’ allows us to provide our Singapore community with personalised date recommendations that play to their passions and lifestyle preferences. This helps create a fun environment for singles to bond with their dates, and hopefully develop meaningful and lasting connections,” McCart said.

Under its specially curated ‘Date Do What’ campaign, Bumble has identified the following partners to cater to its community’s diverse interests, namely ‘Adventurous’, ‘Foodie’, and ‘Artsy-Fartsy’.

In Singapore, daters on Bumble are keen on in-person experiences, with ‘Going Out’ being the second most used Interest Badge on daters’ profiles. The Bumble community in Singapore also have a wide array of interests — ‘Sports’ is the most popular interest badge adopted by Singapore daters, although many have also used the ‘Food & Drinks’ or ‘Foodie’ badges on their profiles. 

Besides offering daters a list of recommended date activities, the ‘Date Do What’ campaign will also feature a ‘Date Generator’ questionnaire to help daters find the perfect date experience. By answering a short list of questions to fine-tune their preferences, daters can get personalised date recommendations from Bumble’s curated list of activities that are uniquely tailored to match their hobbies and interests.

Taipei, Taiwan – Small businesses in Taiwan are most likely to unlock hidden growth opportunities, while wreaking havoc on others during the pandemic. In a new data from CPA Australia, it shows that half of Taiwan’s small businesses grew in 2021, while 63 per cent expect to expand this year. Both results are the highest among the advanced economies included in the regional survey. 

Of the markets surveyed, includes 4,252 small business owners or senior managers across 11 Asia-Pacific markets, including 310 from Taiwan. The survey was conducted from November to December 2021, was designed to understand local business conditions, challenges and confidence. 

Based on the characteristics of high-growth small businesses from the survey, CPA Australia recommends that small businesses in Taiwan consider the following actions: increase their focus on online sales and digital transformation, seek professional advice to improve the profitability of their technology investments, and explore opportunities to innovate through new products, services or processes.

Elic Lam, FCPA (Aust.), honorary Taiwan adviser to CPA Australia, said that COVID-19 is a double-edged sword for Taiwan. Fifty-two per cent of small businesses nominated COVID-19 as a major negative factor in 2021, up from 45 per cent in 2020. However, 38 per cent also said it was a major positive influence on their business. For the second consecutive year, COVID-19 was nominated as both the top positive and negative influence on local small businesses.

“This is not a coincidence. Taiwanese small businesses in export-oriented and technology sectors such as manufacturing, transportation and information technology continue to benefit from surging global demand,” Lam explained. 

Lam added, “The rise of the Otaku (“stay‑at‑home”) economy in Taiwan has boosted domestic demand for computer and internet-related devices, delivery services and gaming. Many small businesses have grasped these opportunities, even under strict social restrictions. However, tourism-related industries such as retail and hospitality registered relatively weaker performance due to a drop in local consumption and overseas travellers.” 

In response to COVID-19 last year, Taiwanese small businesses were most likely to reduce capital expenditure to 27 per cent, followed by seeking government support and subsidies 22 per cent. 

The government’s relief measures aided many small businesses to overcome major COVID-related challenges last year. However, with small businesses facing a new COVID-19 outbreak, increasing costs and the possible end of government support in June, they should be proactive in transforming their business model, especially increasing their focus on digitalisation.

Last year, several Taiwanese small businesses improved their digital capabilities. In 2021, 45% of businesses reported receiving more than 10% of their revenues through new digital payment technologies, a new high for Taiwan. Another 45% reported that online sales accounted for more than 10% of their revenue last year, which is a new high for Taiwan. These rates, however, were still well below the survey averages of 65 and 61 percent, respectively.

Aside from digitalisation, the survey findings indicate that high-growth small businesses in the Asia-Pacific were more likely to focus on innovation. It’s pleasing to see expectations to innovate in Taiwan this year rose to a record high of 67 per cent.This is further evidence that COVID-19 has caused many businesses to look for hidden growth opportunities. 

Lam emphasised, “Stimulus voucher programs such as the ‘5000 Quintuple Stimulus Voucher Program’ were successful initiatives that not only helped to stimulate the local economy but also accelerated the adoption of digital payments. The government may consider introducing similar stimulus measures to continue encouraging adoption of technology and to boost Taiwan’s digital economy. 

Kuala Lumpur, Malaysia – With Malaysia aiming to attain a ‘high technology nation’ status by 2030, small business culture in the country, with one in four of Malaysian SMBs planning to introduce a new product or service this year locally or globally, according to a survey from CPA Australia.

According to CPA Australia’s Malaysian Digital Transformation Committee Chairman Bryan Chung, the findings on Malaysia’s innovative culture are encouraging when compared to small businesses from Australia, Hong Kong, New Zealand, Singapore and Taiwan.

“The findings are indicative of a new generation of entrepreneurs who are tech-savvy, innovative and eager to promote what their business has to offer, both to the region and the world. Malaysian respondents are typically younger with 55.9% under 40, compared with the survey average of 45.2%,” he said.

Chung also added that business owners’ mindsets have shifted, which augurs well. Business owners are now motivated to pursue technological innovations for long-term growth as opposed to short-term survival.

“The focus on technology is reflected in cybersecurity preparedness, with 40.1% of local small businesses reviewing their cybersecurity measures in the past six months, while 38.5% expected their business will be cyberattacked in 2022,” he added.

Reflecting the tech-savvy nature of many Malaysian small businesses, eight in ten earned revenue from online sales and 62.5% received more than 10% of their sales through digital payment options such as Grabpay, Alipay and iPay88. Given the impact of COVID-19, it is not surprising that of those that sought external finance in 2021, close to 55% sought it for business survival and nearly half found that accessing finance was challenging.

Chung further explained that the reasonable rate of technology investment is heartening against a highly challenging business environment where survival and sustainability is paramount. Of the businesses surveyed, close to 40% invested in technology and said their investment improved their profitability. While for some it may have been a knee-jerk response, the positive business outcomes will to a large extent, validate continuous investments.

“This demonstrates that Malaysia’s small businesses are generally pretty good at adopting technology into their business, however there is room to improve. We suggest that more small businesses seek information and advice to ensure they adopt the right technology solutions for their business,” he concluded.

Hanoi, Vietnam – Small businesses in Vietnam are most likely to invest in technology in contrast to their SMB counterparts in APAC during 2021, new data from CPA Australia shows.

This focus in investing in technology was evident by the fact that seven in ten of the Vietnamese SMB respondents expect to grow this year, the third highest result in the Asia-Pacific. Strong investment in technology and government support are likely to be key drivers of this turnaround.

In addition, Vietnam’s small businesses are the most likely to increase their emphasis on online sales and up their investment in technology in reaction to COVID-19. This change saw the percentage that earned more than 10% of their revenue online jump from 60% in 2020 to 73% in 2021.

Of the markets surveyed, Vietnam was most adversely impacted by the pandemic, with 78% of small businesses nominating it as their biggest barrier to growth last year. In response, many local small businesses invested in improving their business, with 44% increasing their investment in technology and 42% shifting to online sales. Both results were the highest of the markets surveyed.

Can Van Luc, chair of North Vietnam Advisory Committee at CPA Australia said, “While 2021 was a difficult year, 45% of Vietnamese small businesses still managed to grow. Under the government’s dual goals of ‘preventing the pandemic and promoting socio-economic recovery’, inflow of foreign direct investment has grown steadily over the past year–up by 9.2% in 2021. Recovering domestic and overseas demand, together with government policy support, have bolstered small businesses operations and accelerated their digital transformation.”

The data also noted that 60% of Vietnam’s small businesses stated they reviewed their cybersecurity protections in the past six months, nearly double the 32% recorded in 2020. Further, 42% sought professional advice from IT consultants or specialists in the past 12 months.

“Threats of cyberattacks are on the rise as small businesses digitalise. [Around] 64% of respondents are concerned that their business could be cyberattacked in 2022. Given that our country has increased the pace of the development of its digital economy, small businesses should keep investing in capabilities to safeguard themselves against increasing malicious cyberattacks. Measures such as enhancing cybersecurity and consulting IT consultants are crucial to protecting vital assets and customer data,” Luc added.

Wellington, New Zealand – Global small business platform Xero has appointed Chris O’Neill to the role of chief growth officer, where he will be responsible for strategic direction and operational performance within Xero’s newly-created applications and services division, which represents part of Xero’s small business platform. He starts his role at Xero officially on April 4, 2022.

As he will be based in San Francisco, USA, he will be responsible as well for leading the strategic development of Xero in the Americas, and working closely with Tony Ward, president for the Americas at Xero.

Chris joins Xero having served as a senior executive, board member and investor for a number of global technology companies, including Google and Evernote. He also has deep leadership experience in global and North American consumer and enterprise markets.

Steve Vamos, CEO at Xero, commented, “The global cloud-based small business applications software market is still in a relatively early stage of development and represents a huge opportunity. Chris brings extensive experience to help further develop and grow a number of exciting business areas within Xero.” 

He added, “I look forward to Chris helping us further scale Xero’s business in the US and Canada, building on our go to market and product efforts to date; through partnerships, acquisitions, and further development of our product capabilities to meet the needs of customers and partners.”

Singapore – As the peril of new waves of COVID-19 outbreaks looms, around 59% of small businesses in Singapore or around six out of ten of them say that they are basically on ‘survival mode’ in terms of operations, a new survey from global services company American Express shows.

The survey notes that only 28% of local businesses say that they are ‘thriving’, while 12% of local businesses note that they are at risk of closing their operations. About 1% of the business respondents replied that they have closed down their operations.

Despite the cautionary mood among the majority of these businesses, about 67% of the respondents are ‘cautiously optimistic’ about their future, noting that this year’s annual sale will be a lot higher compared to their pre-pandemic sales during 2019.

Reasons to note such optimism include increase in revenue from expanding their businesses online (46%), support from new customers (44%), and continued support from regular customers (40%).

In addition, 71% of respondents shared they are optimistic they can thrive in the new normal—with 76% having made adjustments to sustain their business in the next 12 months. The top two changes businesses plan to make in the new normal are to focus more on e-commerce and communicate more with customers via social media.

Ho Yat-Wai, country manager at American Express Singapore, notes that while local businesses are more optimistic after almost two years since the pandemic started, its volatility weighs heavily on business leaders’ ‘minds’, adding that the recent spike in local cases is an example of the fluidity of the situation and difficulty in planning.

However, optimism alone would not drive businesses forward, the study noted, as the uncertainty for concrete business plans to move forward are still prevalent. Only 45% of business leaders state a clear long-term strategy compared to 84% before the pandemic. Meanwhile, Another 25% changed their business strategy to become more agile to better respond to changes, rather than focusing on long-term planning. Among those who do not currently have a business plan, 23% attribute it back to uncertainty.

Singapore – Despite the ongoing pandemic, small businesses in Singapore are widely supported locally, thanks to a growing number of Singaporeans rallying their support and patronage to their products, a new report from the Singaporean arm of e-commerce giant Amazon and market research firm YouGov shows.

According to the report data, the Gen X demographic, who are born from 1965 to 1980, are the most supportive among the local demographic, tallying around 48% of respondents saying they at least buy once a week from a local business. This was then followed by millennials (44%) and Gen Z’ers (34%).

While majority of all shoppers polled said they will support organizations that have a charitable component, 63% of Gen Z shoppers said that for the same product, they would rather buy from a seller that gives back to the local community, versus one that does not, compared to 55% of both millennial and Gen X shoppers.

In terms of what type of purchases are being made, clothing and accessories topped the type of purchases being made, with 59% of respondents saying so, 64% of that data are Gen Z shoppers. Other categories include health and personal care (47%) and groceries (46%).

Regarding increased purchases made during the pandemic, pet supplies were the top purchases locally, tallying around 85% response rate from respondents. This is followed by beauty and skincare (82%) and books (78%).

With the introduction of social distancing measures and heightened public health alerts, 2 in 5 Gen X shoppers (39%) said the ability to avoid public spaces and stay safe is a key motivator for online shopping.

While 27%of Gen Z shoppers said the availability of international selection is a crucial online shopping motivator, the highest compared to their Millennial and Gen X counterparts.

Lastly, with the majority of Singaporeans identifying as Bargain Hunters (32%) and 41% saying that lower prices are the top motivator for online shopping, it comes as no surprise that 23% of shoppers rely on product comparison sites when making online shopping decisions.

“Customer obsession has always been at the heart of Amazon’s business globally. By keeping our finger on the pulse of changing consumer trends and behavior, we ensure the user experience is optimized for customers’ shopping preferences,” said Henry Low, country manager at Amazon Singapore.

Kuala Lumpur, Malaysia – As a result of the disruption caused by the global pandemic, more small businesses in Malaysia have utilized digital technologies in their operations and services, new survey from professional accounting organization CPA Australia shows.

According to the survey, 40% of businesses have begun increasing their focus on online sales in the past 12 months, as well as social media amplification, with over 60% using it to promote their business and 55% using it to communicate with customers.

While most Malaysian small businesses offer customers new digital and mobile payment options, 61.5% still receive 50% or more of their sales in cash, above the APAC survey average of 46.4%.

“The strong connection between technology usage and business growth and the quick returns many Malaysian businesses experience when investing in technology is no doubt helping to drive this uptake. Forty-two per cent reported positive returns from their technology investment last year,” said Jimmy Lai, president of CPA Australia, Malaysia Division.

Despite efforts among the small businesses scene in the country, most find difficulty in financing conditions. Nearly 50% expecting they will face problems accessing finance. These difficulties, plus an uncertain outlook are also expected to impact the solvency of many businesses, with 32% anticipating it will be difficult to repay debts in 2021.

“Small businesses may be offering limited digital and mobile payment options due to a lack of understanding about what’s available or scepticism towards these solutions. This echoes findings from CPA Australia’s 2020 Report on Business FinTech Usage Survey, that showed 31% of businesses with fewer than 50 employees identified a lack of fintech understanding among the board or senior management as a challenge to fintech adoption,” Lai said.

He also added that more can be done to assure business that digital and mobile payment options can provide better customer reach, which should contribute to recovery this year.

COVID-19 is likely to continue creating challenges for Malaysia’s small businesses. Developments such as the spike in infections at the start of the year are balanced by the vaccine roll-out and easing of restrictions. This suggests a more positive picture for 2021, which is supported by the survey results. About 70% of respondents expect their revenue to grow this year, up from 56% last year. Exporting will make an important contribution to growth, with 45% expecting revenue from overseas to grow this year.

“With many small businesses having a strong focus on innovation, e-commerce, good staff and improving business strategy, we are likely to see them recover quickly from COVID-19, especially in the second half of the year. Such a focus also sets them up for long-term growth,” Lai stated.

He added, “However, uncertainty in the economic outlook will remain an impediment to small business recovery. The government should therefore continue to play its enhanced role in supporting this fundamental sector of Malaysia’s economy in the near term.”

Hong Kong – Due to the prolonged economic impacts brought by the COVID-19 pandemic, the confidence rate among small and medium businesses (SMBs) is at an all-time low, according to a new survey from professional accounting body CPA Australia.

Only 16% of surveyed Hong Kong small businesses reported growth last year, and only 21% expect their business to grow this year. Furthermore, the survey also stated that the weak outlook is reflected in the cautious approach of Hong Kong small businesses’ increasing their headcounts. Only 12% of respondents expect to increase staff in 2021, compared to the APAC survey average of 36%.

In addition, Hong Kong small businesses are also less inclined to innovate, with only 8.5% of respondents stating they will introduce new products or services in 2021, compared to the average of 23% in the APAC.

“For two consecutive years, expectations of business growth among Hong Kong small businesses have been the lowest of the surveyed markets. 53% of respondents identified COVID-19 as having had a major negative impact on their business operations in 2020, and 65% of them expect to need one year or more to recover,” said Janssen Chan, 2021 divisional president for Greater China at CPA Australia.

When asked what major actions businesses took in response to COVID-19, small businesses in Hong Kong were most likely to have sought government support and subsidies (33%), reduced capital expenditure (32%), and reduced staff numbers and costs (22%).

The response is also reported in other findings that beginning or increasing the focus on online sales was one of the key actions taken by small businesses in many of the markets surveyed.

“The relief measures announced by the SAR Government supported small businesses to combat the worst of the pandemic. According to the survey, 44% of the respondents sought external funds for business survival. Using government grants as the main source of external finance jumped from 9% in 2019 to a record high of 33% last year,” Chan added.

Chan also noted that the government’s initiative to issue electronic consumption vouchers, as announced in the Hong Kong Budget, is one great opportunity for SMBs in taking advantage of e-commerce and digital payment options. He also recommended reopening applications to the Distance Business Programme to continue driving digitalization and technology adoption of small businesses.

The Distance Business Programme is an initiative by the Hong Kong government to support enterprises in adopting IT solutions to continue their business and services during the epidemic.

“While business innovation may involve additional expenditure in the short term, small businesses in Hong Kong should be more proactive in reassessing their resource allocation and consider innovating through the adoption of technology. This could enhance their long-term competitiveness and help them keep pace with their peers in other Asia-Pacific economies,” Chan added.

The survey recommended Hong Kong businesses to consider certain measures such as managing cash flow and debt closely paying attention to the cost of external financing, leveraging government support schemes to increase the adoption of technology, as well as to identify, invest in and adopt new technologies to keep innovating.