SMBs Turn to AI, Supply Chain Diversification, and New Trade Corridors to Grow Across Borders Despite Headwinds, Global Research by Payoneer Finds

Rhea-AI Summary

Payoneer (NASDAQ: PAYO) has released its second annual SMB Ambitions Barometer, surveying 3,800 SMBs in 15 countries. Key findings show 46% of SMBs have an international customer base, up from 42% last year. SMBs are increasingly adopting AI technologies for customer service, merchandising, inventory management, content creation, competition analysis, and supply chains.

SMBs now work with an average of 29 vendors, up from 21 two years ago, to mitigate global disruptions. 40% of SMBs are focusing on Europe and Central Asia for growth due to business opportunities, customer demand, and regional proximity.

The report highlights that over 40% of SMBs feel unprepared for geopolitical risks and cybersecurity threats are increasingly a priority. The findings indicate SMBs are keen on global expansion despite challenges, driven by digitization and vendor partnerships.

Positive

• 46% of SMBs have an international customer base, up from 42% last year.
• SMBs are adopting AI technologies for various functions: customer service (62%), merchandising (64%), inventory management (62%), content creation (62%), competition analysis (64%), and supply chains (63%).
• SMBs are working with an average of 29 vendors, up from 21 two years ago.
• 40% of SMBs prioritize Europe and Central Asia for growth due to business opportunities (45%), customer demand (38%), and regional proximity (37%).
• Digitization and vendor partnerships are empowering SMBs to expand globally.

Negative

• Over 40% of SMBs feel unprepared for geopolitical risks such as conflicts, product boycotts, and trade wars, up from 36% in 2023.
• Cybersecurity threats are increasingly a concern, with reducing cybersecurity risk being 63% more likely to be a key business goal.

Insights

Market Research Analyst

The survey data from Payoneer's SMB Ambitions Barometer provides a snapshot of how small and medium-sized businesses (SMBs) are positioning themselves globally, an increasingly important aspect in today's interconnected economy. With 46% of SMBs reporting international customer bases, it demonstrates a significant trend toward global market expansion. This international push might be seen as a strategic response to the macroeconomic challenges faced by businesses today, such as geopolitical risks and trade tensions.

From a market research perspective, the increased adoption of AI tools across various business functions—ranging from customer service to supply chain management—signals a proactive approach by SMBs to enhance efficiency and competitiveness. The fact that SMBs are diversifying their vendor networks and adopting AI technologies shows a clear trend of leveraging innovative solutions to mitigate risks and capitalize on new market opportunities.

However, the research also highlights vulnerabilities, with over 40% of SMBs feeling unprepared for geopolitical risks and cyber threats. This underlines the importance of robust risk management strategies for businesses looking to operate on a global scale. Investors should note these findings as they provide insights into the resilience and adaptability of SMBs in the face of ongoing global uncertainties.

Financial Analyst

From a financial standpoint, the findings of Payoneer's report suggest several key areas for investor consideration. The expansion of SMBs into new trade corridors, particularly in Europe and Central Asia, signifies potential growth in these regions. This diversification strategy not only opens up new revenue streams but also helps in mitigating risks associated with over-dependency on specific markets.

The increased use of AI technologies can lead to cost efficiencies and improved profit margins over time. By automating tasks like inventory management and competition analysis, SMBs can reduce operational costs and focus more on strategic growth initiatives. This kind of operational efficiency often translates into better financial health and potentially higher valuations for tech-savvy SMBs.

However, the noted lack of preparedness for geopolitical conflicts and cybersecurity threats could pose significant risks. Investors should closely monitor how SMBs address these vulnerabilities, as failure to do so could impact their financial stability. It's also worth noting that these challenges are not unique to SMBs; they reflect broader market uncertainties that can affect larger sectors and economies.

Second Annual SMB Ambitions Barometer by Payoneer Finds Two in Five Growth-Minded SMBs Unprepared for Geopolitical Risks

NEW YORK--(BUSINESS WIRE)-- Payoneer (NASDAQ: PAYO), the financial technology company empowering the world’s small- and medium-sized businesses (SMBs) to transact, do business, and grow globally, today released its second annual SMB Ambitions Barometer, which surveyed nearly 3,800 SMBs across 15 countries 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 SMBs we surveyed are reporting that their customer base is international, up four points from last year. At the same time, SMBs are facing an ever-growing number of macro challenges and are preparing to drive efficiencies by adopting AI technologies, partnering with more vendors, and breaking into new trade corridors.”

Key themes emerging from this year’s SMB Ambitions Barometer indicate:

- SMBs are turning to AI-powered tools and working with more vendors to support growth ambitions: A majority of surveyed SMBs are planning to use or are currently piloting AI 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, SMBs 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. Nearly two-thirds believe having a diverse and global vendor network helps protect their business against global disruptions.

- SMBs are expanding their customer base by growing into new trade corridors: Two in five SMBs (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.

- Going global means overcoming obstacles – and SMBs are readying for the challenge: More than 40% of 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 SMBs (8% in 2023 vs. 13% in 2024).

“The opportunity for SMBs to unlock growth from accessing global demand is enormous,” said Bea Ordonez, CFO of Payoneer. “Our research shows that SMBs continue to expand their businesses across borders, extending their reach into new markets and trade corridors. To do this, SMBs are embracing digitization and innovation and working with a range of technology enabled vendors and partners who can empower and facilitate their global ambitions.”

To learn more about Payoneer’s SMB Ambitions Barometer and read more about this year’s findings, visit https://www.payoneer.com/resources/smb-barometer-2024/.

About the SMB Ambitions Barometer

Payoneer’s second annual SMB Ambitions Barometer surveyed decision-makers (CFO/Finance Director, CEO/Owner, Manager) at 3,779 SMBs to examine their progress, goals, and barriers to success. Conducted in collaboration with Oxford Economics, the survey captured insights from respondents in 15 countries (United States, China, Colombia, Philippines, South Korea, India, Vietnam, Argentina, Brazil, Turkey, Pakistan, Serbia, Bangladesh, Israel, and Ukraine). The survey was conducted online in January and February 2024. The businesses surveyed are critical engines that help fuel economies; the perspective of their leaders, therefore, represents a valuable lens into the state of global SMBs.

About Payoneer

Payoneer is the financial technology company empowering the world’s small and medium-sized businesses to transact, do business, and grow globally. Payoneer was founded in 2005 with the belief that talent is equally distributed, but opportunity is not. It is our mission to enable any entrepreneur and business anywhere to participate and succeed in an increasingly digital global economy. Since our founding, we have built a global financial stack that removes barriers and simplifies cross-border commerce. We make it easier for millions of SMBs, particularly in emerging markets, to connect to the global economy, pay and get paid, manage their funds across multiple currencies, and grow their businesses.

Forward-Looking Statements

This press release includes, and oral statements made from time to time by representatives of Payoneer, may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Payoneer’s future financial or operating performance. For example, projections of future revenue, transaction cost and adjusted EBITDA are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “intend,” “plan,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Payoneer and its management, as the case may be, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) changes in applicable laws or regulations; (2) the possibility that Payoneer may be adversely affected by geopolitical events and conflicts, such as the current conflict between Israel and Hamas, and other economic, business and/or competitive factors; (3) changes in the assumptions underlying our financial estimates; (4) the outcome of any known and/or unknown legal or regulatory proceedings; and (5) other risks and uncertainties set forth in Payoneer’s Annual Report on Form 10-K for the period ended December 31, 2023 and future reports that Payoneer may file with the SEC from time to time. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Payoneer does not undertake any duty to update these forward-looking statements.

Disclaimer: The information herein and in the SMB Ambitions Barometer is provided for informational purposes only and does not constitute professional, expert, financial, taxation, or legal advice. In no event will Payoneer be liable for any loss or damage including, without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever incurred in connection with the information provided.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240604131664/en/

Media

Alison Dahlman

PR@payoneer.com

Source: Payoneer

FAQ

What is the focus of Payoneer's second annual SMB Ambitions Barometer?

The focus is on surveying 3,800 SMBs across 15 countries to gauge factors critical to their growth, including AI adoption, vendor partnerships, and international expansion.

How many SMBs reported having an international customer base?

46% of SMBs reported having an international customer base, up from 42% last year.

Which technologies are SMBs adopting according to Payoneer's survey?

SMBs are adopting AI technologies for customer service, merchandising, inventory management, content creation, competition analysis, and supply chains.

What regions are SMBs focusing on for growth in the next five years?

40% of SMBs are focusing on Europe and Central Asia for growth due to business opportunities, customer demand, and regional proximity.

How many vendors are SMBs working with on average?

SMBs are working with an average of 29 vendors, up from 21 two years ago.

What percentage of SMBs feel unprepared for geopolitical risks?

Over 40% of SMBs feel unprepared for geopolitical risks such as conflicts, product boycotts, and trade wars.

Why are cybersecurity threats a growing concern for SMBs?

Cybersecurity threats are a growing concern because reducing cybersecurity risk is now 63% more likely to be a key business goal for SMBs.