With the COVID-19 pandemic, trade disruptions, drop-offs in investments, societal shifts, and economic uncertainty, small and medium-sized businesses (SMBs) worldwide have come through a challenging period. Despite these challenges, SMBs in Southeast Asia have continued their digitisation efforts in order to align with the Association of Southeast Asian Nations (ASEAN) digital transformation programme and make their businesses more resilient and competitive.
The 5th Edition of Salesforce’s Small and Medium Business Trends Report 2021 (Salesforce SMB report) reveals that many SMBs have been able to overcome the challenges of recent years and thrive, while also accelerating their tech adoption. The Salesforce SMB report surveyed over 2,500 leaders and business owners from the Americas, Asia Pacific (APAC), and Europe using The Harris Poll. The respondents were all above the age of18, employed in businesses with up to 200 employees and revenues of less than USD $1 billion.
We explore some key highlights from the report.
Community and government support for SMBs
Global economic depressions and pandemic-enforced restrictions hurt SMBs deeply as local and foreign investors and governments stalled business funding. This meant that resources were minimal, and businesses had to navigate their way through despite being cash strapped. Many employees were let go as a result of some SMBs failing to thrive.
Intelligent finance is key to unlocking agile innovation for SMEs in Singapore
Fortunately, governments began formulating financial revival plans and injecting funds into the economy, specifically into SMBs. In Southeast Asia, the Singaporean government, for example, allocated USD $352 million to help local businesses in dealing with the pandemic’s aftermath and investing in digital solutions.
Moreover, according to the Salesforce report, two-thirds of SMB leaders stated that community support was vital for their business’s survival. Sectors like consumer goods, retail, technology, and financial services all rely significantly on outside support, with 70% or more of respondents admitting that it is essential. During the pandemic, most SMBs applied for financial aid, and more than half were successful, enabling them to pay employees and maintain operations.
Meeting the needs of employees and customers
As nearly one-fifth of small businesses had to downsize their workforce to stay afloat, employee welfare became a major concern. Businesses also made human resource policy changes, adopting flexible working arrangements, safety measures at the office, and reduced working hours. As the economic situation improves, nearly half of the SMBs that fired their employees have rehired them.
To satisfy customer expectations, businesses have adopted new practicesby responding quickly to inquiries and increasing customer contact options. They have also improved contactless services, customer safety protocols, and boosted their eCommerce solutions.
Long-term operational changes
SMB operations will continue evolving as businesses seek to stay agile under uncertain circumstances. To manage future crises, 77% of growing SMBs have created crisis scenario plans, whereas only 65% of stagnant or declining SMBs have made such plans.
HR practices are now more flexible, adopting various work-from-home models in different industries. Two in five SMBs plan to have employees work remotely at least half the time, while others will expect in-office work for most of their employees.
Tech adoption and its impact
Finally, many SMBs worldwide have adopted technology to stay competitive, protect employees, boost productivity, and cater to customer needs. According to a 2020 Statista survey, 11% of SMBs in APAC expected more than 50% of their businesses to be digitised by 2021, while more than half of the respondents expected 21% of their businesses to be digitised.
Salesforce’s report highlighted that 83% of SMBs had their operations online, with nearly 95% of them moving a portion of their operations online in 2020. Three-quarters of the respondents also improved their online presence and poured more time and resources into their social media, websites, and email marketing.
Most of the growing SMBs, at 71%, said digitisation saved their businesses during the pandemic. Three in five SMB leaders admitted they could not have survived using decade-old technology, which is why tech investments accelerated.
According to a survey by SWZD, 72% of respondents in APAC said they planned to adopt IT automation technology and other emerging technologies, such as cloud technology, 5G, serverless computing, and gigabit Wi-Fi networking, by 2024.
The shift to digital in Southeast Asia is still going strong, with 40 million new internet users coming online last year. The tech startup ecosystem in the region is growing as existing consumers purchase around four more digital services than before the pandemic. As digital payments become part of the norm, financial technology (fintech) startups are critical enablers for tech adoption in ASEAN.
Economic and pandemic hurdles aside, SMBs in Southeast Asia look set to thrive as they adopt technology into their operations and innovate better solutions for different sectors in the region. While additional upskilling and customer tech education may be necessary, the Salesforce SMB report shows the partnership between the community, the government, and SMBs, and the operational and tech changes made will help these small and medium-sized businesses succeed.