SMALL- and medium-sized enterprises (SMEs) are beginning to embrace the strategy of diversifying their global vendor networks, US financial services company Payoneer Global, Inc. said.
In a study, Payoneer said 63% of 252 surveyed Philippine respondents consider it important to diversify their supply chains to mitigate disruption in the flow of goods.
The strategy also carries with it the side effect of possibly opening the door to overseas markets, Payoneer said.
“The opportunity for SMEs to unlock growth from accessing global demand is enormous,” Payoneer Chief Financial Officer Bea Ordonez said.
“Our research shows that SMEs continue to expand their businesses across borders, extending their reach into new markets and trade corridors,” she said.
“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,” she added.
“This is part of a larger trade diversification trend, where ongoing trade tensions between China and North America have made doing business more complicated,” Payoneer said.
Some 86% of Philippine SMEs said they want to globalize but assign a high priority to employing local talent to support the Philippine economy.
Philippine SMEs said globalization provides them with a range of benefits, including innovation (62%), access to high-quality supply (57%), access to vendors (54%), financial performance (54%) and control over pricing (51%).
However, Philippine businesses are facing hurdles such as low brand awareness and marketing challenges (38%).
Some 46% of respondents are finding the obstacles more manageable due to technology, while 84% said the pace of technological change is driving innovation for their company.
Many organizations are beginning to use technologies like AI to improve customer service, merchandising, trend forecasting, and supply chain optimization, Payoneer said.
Businesses also have an optimistic outlook on their growth prospects, with 93% saying they are confident their revenue will grow over the next 12 months, while 90% expect their economies to improve.
“This outlook… creates a positive feedback loop,” Payoneer said, with 79% of Philippine SMEs saying their business is the sole source of income for their families.
“When the local economy improves, SME performance benefits, which then further boosts the economy,” Payoneer added. — Aaron Michael C. Sy