Online report
SMB Ambitions barometer
2024
Payoneer surveyed 3,779 SMBs across 15 countries to better understand their ambitions as well as their challenges. Dive into our second annual SMB Ambitions Barometer to learn how SMBs are navigating markets, securing capital, and overcoming challenges while pursuing global growth opportunities in 2024.
A NOTE FROM OUR CEO
Welcome to Payoneer’s Second Annual SMB Ambitions Barometer, a survey that examines the opportunities and challenges for small- and medium-sized businesses (SMBs) around the world.
We conduct this survey because we believe that it is important to take the pulse of small businesses—the entrepreneurs and business owners that are the backbone of the global economy. Not only does it help our business provide SMBs with superior financial services products that simplify cross-border trade, but it also provides you with a lens into the experiences of your peers.
SMBs remain enthusiastic about global opportunities and are expanding into new countries and regions. There are many internal and external challenges, of course, but the benefits of expansion are undeniable for many.
We hope you find this analysis insightful. We are eager to partner with you to support your journey of “going global”.
Sincerely,
John Caplan
It’s a typical dream for anyone starting a small- or medium-sized business: “I will build this company, grow it responsibly and someday my products and services will change the world.”
While an enviable goal, many business owners will tell you that it’s a lot harder than they anticipated. Global disruptions, economic instability, and a dizzying array of new technologies are just a few of the challenges that business owners wrestle with every day. But there is also immense satisfaction that comes from creating and operating a company that has a global footprint and supports local communities at the same time.
Payoneer’s Second Annual SMB Ambitions Barometer examines the pain points and opportunities that small- and medium-sized businesses (SMBs) are experiencing right now. Payoneer, in collaboration with Oxford Economics, recently took the pulse of 3,779 SMB decision-makers in 15 countries to examine their progress, goals, and frustrations. Respondents came from companies that operate in more than 16 industries, ranging from e-commerce to mining. These businesses are critical engines that help fuel economies; the perspective of their leaders, therefore, represents a valuable lens into the state of global business.
Top 10 findings
There’s a lot to discover in this year’s report, but these are the top 10 key themes and trends that stood out most. Learn more about what SMBs have had to grapple with in 2024.
Going global
SMBs contribute significantly to the economy – both locally and around the world – driving innovation and job creation. They’re continuously looking to new geographic markets to maximize their business growth.
Why is globalization top of mind?
Globalization is key to any business but it is especially important to SMBs because they often need to spread their wings to keep their big dreams aloft. The survey found that SMBs across the world have made considerable progress over the past year in extending their global presence. On average, SMBs report 46% of their customer base is international (up from 42% last year) and nearly half of the vendors they work with are also international (up from 39%).
For some, it is a slow march toward going global due to a lack of information about economies and opportunities in other parts of the world. Despite the common perception that a few keystrokes can provide us with all the information we need, some SMBs still don’t have a good sense of where they should expand – and how to do it.
The advantages of going global
The advantages of globalization are clear, driving both revenue and customers. Respondents say they are reaping a range of benefits from going global, including access to customers and more innovation (56% for each), access to vendors (53%), improved financial performance (51%), access to high-quality supply (51%), access to capital (47%), ability to find and retain talent (45%), and control over pricing (45%). Payoneer has seen this among our own customers as well; South Korean SMBs in the cosmetics industry have such success expanding to China that they are now seeking to diversify their revenue streams by targeting the US and Japan.
The location of individual geographies also plays a role in expansion. Payoneer’s SMB customers in the Philippines that focus on the outsourcing industry, for example, are now pushing into Australia to take advantage of similar time zones that make it easier to coordinate.
Yet some organizations still have doubts. Companies that are less than two years old and those that are more than a decade old are less likely than others to say that increased globalization will make their business more resilient.
Positive effect
Negative effect
Positive vs. negative effects of globalization
The country-by-country breakdown reveals the global potential for these SMBs.
Those in Pakistan, Turkey, and Israel cite the highest proportions of domestic customers on average (62%, 59%, and 58%, respectively). Ukraine and China have the highest proportions of international customers on average (61% and 53% respectively).
Breakdown of international customers by region in 2023 vs. 2024
On average, respondents receive goods and services from nine countries and send goods and services to 12 countries
Explore country-specific data by clicking on the tabs below.
- China
- Vietnam
- Ukraine
- Argentina
- India
- US
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Vendors play a vital role in global resilience
Vendors are essential as these companies seek global expansion and efficiency, with nearly two-thirds of SMBs saying that a diverse and global vendor network helps protect small businesses from disruptions. Interestingly, young companies are less likely to agree with this statement. Vendors such as law firms and marketing agencies also help SMBs identify expansion opportunities.
Surveyed SMBs are using twice as many vendors as they did in 2023 (with a median number of 22 in 2024 compared to 10 in 2023) and diversifying their network with a growing number of international vendors. APAC leads the way regionally with a 41% increase in the number of vendors used. On a countrywide basis, the number of vendors used by SMBs in Turkey rocketed up 60% from two years ago, far above the next highest increase of 46% for SMBs in South Korea.
Number of vendors SMBs work with 2022 vs. 2024
Greater globalization is certainly on the agenda as SMBs seek to expand business/revenue opportunities (45%), meet customer demand (38%), and enhance regional proximity (37%).
26%
of respondents have their eyes set on Europe as a way to grow their customer base over the next five years, followed by North America at 18%.
Global payment trends are shifting
Payments capabilities are naturally a core part of global expansion although the volume of payments sent and received shifted this year. SMBs are sending/receiving fewer payments to/from the US, China, and Canada than they did last year, but payments to/from other countries, including Brazil, India, Japan, and Germany, are rising.
Amid this shift, many SMBs are still clearly struggling with payments
Although cross-border payments capabilities increased slightly from last year’s survey amid the push for globalization, more than half of the surveyed SMBs lack capabilities for some payments basics. This includes third-party electronic payments, real-time currency conversion, and website checkout. And just 21% can accept cryptocurrency payments. Other cross-border payments difficulties include transfer fees, delays in payment confirmations, and foreign exchange rates.
International payments are just one challenge for entrepreneurs who are scrambling to handle other products and services that are critical to daily operations. Furthermore, while many SMBs around the world are comfortable with electronic payments for everyday needs, they are cautious about moving large amounts of money.
Cross-border payment capabilities used by SMBs surveyed
It is also clear that SMBs feel left out of advancements in financial services.
More than half of those surveyed said that cross-border payment solutions are tailored to large corporations, with 44% saying that it is hard to find one that meets their needs. Many rely on wire transfers from banks; these require manual work and often just aren’t a core business of the financial institution.
Gen Z-led SMBs are less likely to possess cross-border payment capabilities and fall behind other groups in offering multiple payment options (33% vs. 54% total), accepting payment on a website (25% vs. 41% total), and enabling automatic tax calculations (28% vs. 40% total).
>40%
of respondents find the process of making and receiving cross-border payments challenging, citing various obstacles
Cross-border payment obstacles reported by >40% of SMBs
Payments represent just one of the challenges that SMBs face in their efforts to go global
A turbulent geopolitical environment, such as the Russia-Ukraine war, ongoing Middle East conflicts, and US political unrest, can increase exposure and vulnerability even if a geographically diversified business is beneficial in the long run.
Few SMBs feel prepared to tackle these issues. Some of those surveyed appear to be even less prepared than they were last year. This is especially concerning as they seek to expand internationally, and disruptions continue to emerge around the world.
Fewer than half of SMBs describe themselves as “somewhat prepared” for inflation and rising interest rates (40%), economic downturns (41%), and cyber threats (37%) – meaning they have a contingency plan but aren’t confident about its effectiveness. Fewer than a quarter of SMBs describe themselves as “very prepared“, meaning they have a comprehensive contingency plan for most of the global events specified in the survey, such as currency volatility, increased cost of doing business, geopolitical conflicts, and supply chain disruptions. Gen Z respondents were more likely to say that they are very prepared for global events and are confident about the effectiveness of their contingency plans.
Planning for the future is especially difficult in certain parts of the world. In Latin America, for example, frequent changes in government leadership often bring new rules and regulations for businesses operating there. And economic upheaval in many countries can create headaches for paying employees in local currencies, managing business operations, and cash flow.
Company preparedness for various potential global events
+63%
Reducing cybersecurity risks
2023: 8%
2024: 13%
-39%
Increasing revenue growth
2023: 53%
2024: 32%
-43%
Improving customer satisfaction
2023: 42%
2024: 24%
-28%
Increasing profitability
2023: 39%
2024: 28%
SMBs’ top business goals 2023 vs. 2024
Concerns about cybersecurity are also on the rise
The percentage of respondents who consider the reduction of cybersecurity risk as a business goal rose by more than 63% from last year.
By comparison, the focus on revenue growth, increasing profitability, and improving customer satisfaction declined significantly as business goals even though they remain the top three priorities for surveyed SMBs.
SMBs report a wide range of barriers to entry in their quest for globalization…
…with organizations of all sizes struggling to scale global operations. The cost of doing business, as well as legal and regulatory compliance, are understandably among the top roadblocks to entering new markets. Access to capital is another struggle, with SMBs of all sizes reporting barriers that include limited personal networks, insufficient capital, and high debt-to-income ratios. In many countries, loan opportunities are limited as local financial institutions focus on larger companies and are reluctant to make unsecured loans. Entrepreneurs also often grapple with the intricate laws of taxation in other countries, sometimes using vendors to help navigate the process.
And despite the widespread perception that the world is becoming a smaller place due to advancements in technology, the survey found that challenges associated with language and cultural barriers increased by 6% from 33% in 2023 to 35% in 2024.
The biggest barriers hindering SMBs from expanding into new geographic markets in 2024
Customer story
Tiendamia pivots expansion plan in latin America
One major barrier to cross-border trade is limited access to global goods. Many goods sellers are only able to ship to limited markets, or only sell on a handful of platforms, frustrating potential buyers in other markets. Tiendamia is a marketplace platform that solves for these cross-border retail frustrations, integrating the product catalogs of major US and Chinese retailers and sellers around the world into a single platform. Tiendamia enables consumers in 10+ countries in Latin America (e.g., Brazil, Argentina, Costa Rica, Ecuador, and more) to access goods that are commonly found in the US – such as computers, cell phones, toys, and tools – via the Tiendamia marketplace.
The 10-year-old company, founded in Uruguay, but currently based in Miami, Florida, in the United States, had originally planned to use a capital infusion from a private equity investment to enter new markets and reach even more customers in Latin America. But it put the brakes on geographic expansion after realizing the investment in new markets would take years to pay off.
“It was a long-term investment, and we have short-term needs,” says Max Suez, Chief Financial Officer, Tiendamia.
Instead, Tiendamia pivoted away from expanding its footprint and focused on bolstering its marketplace capabilities within its existing markets. As part of the platform refresh, Tiendamia enabled manufacturers, wholesalers and brands to upload their catalogues directly onto the platform so they could sell to customers in Latin America.
Cutting out intermediaries enabled Tiendamia to reduce costs and better control the products available on the platform. Building out its own platform and marketplace capabilities has also enabled Tiendamia to foster closer relationships with sellers and wholesalers in the US and China directly.
Although the geographical expansion is on hold for now, Mr. Suez still worries about global issues that will affect the company’s business. They include the tense relationship between China and the US, the potential for higher oil prices due to Mideast turmoil and upcoming elections in Uruguay that could impact the regulation of imports.
“We can always find a way to move goods, but it can still take a financial toll on us,” Mr. Suez says.
THE TECH (R)EVOLUTION
Technology can be a blessing and a curse – often at the same time! The SMBs that we surveyed are growing more comfortable with the pace of digital advancements (even compared with last year), especially because it is helping them enter global markets. Indeed, SMB leaders of all ages see technological change as driving innovation far more than they see it as a threat.
76%
of SMBs surveyed say that the pace of technological change is a driver of innovation for their company.
Surveyed SMBs certainly understand that current technology is critical for their globalization efforts.
More than half say that digital transformation has lowered barriers to entering the global market and more than three-quarters say that the pace of technological change is driving innovation.
But that pace of change varies significantly around the world.
Businesses in North America and China have an early lead using AI to enhance customer service, improve merchandising, and create content, but some SMBs in LATAM are catching up, showing equal or better results as they start to experiment with dashboards and advanced metrics, according to Payoneer customer success managers in LATAM. At the same time, nearly half of LATAM respondents struggle to implement new technologies into their operations effectively (compared with 42% overall) and more than half say they struggle to find the right people to implement those new technologies (versus 45% overall).
SMBs’ perception of struggling to effectively implement new technologies into their operations
SMBs’ perception of struggling to find the right people to help implement new technologies into their operations
most SMBs plan to use or pilot AI, with roughly two-thirds using it for forecasting, competitive analysis, and supply-chain optimization.
In an unexpected twist, Baby Boomers report the highest use of AI in areas of customer service and content. Gen Z is close behind, with the highest AI implementation for improving both merchandising and inventory management.
These advancements in technology are prompting 79% of SMB respondents to prioritize hiring employees with emerging technology skills, rising to 83% for companies that have been in business for more than a decade. Gen Z respondents have the most difficulty finding the right people for these roles.
SMBs’ AI implementation for some or all areas of their business
Customer story
VFA taps into tech to scale with growing demand for virtual assistants
Starting a new business is a risk for any hopeful entrepreneur – but a growing family makes it all the more challenging.
So was the case for the owners of Manila, Philippines-based Virtual Freelancer Asia (VFA): Dana Lopez and Rudolfo Lanuza.
After 15 years working in the business process outsourcing (BPO) industry and following the birth of the couple’s youngest child in 2015, Ms. Lopez decided to strike out on her own as a virtual assistant, with the support of her husband Mr. Lanuza.
And in the tailwinds of pandemic-driven demand for virtual assistants, it didn’t take long before client referrals saw her hiring additional staff to meet rising demand from clients around the world.
VFA now has 300 virtual assistants on staff, working with 80 clients across the US, Israel, Canada, Singapore, Puerto Rico, and the Cayman Islands. With a wholly remote staff serving clients across complex industries – from real estate to law to aerial photography – adopting tech to streamline communications and manage payroll is critical for companies like VFA to support their globalization efforts.
“It’s very fast-paced, and we tend to have that urge to adapt right away. Even though the pace of change is constant, we want to make sure we do our research on the best tools available,” shared Ms. Lopez.
But that doesn’t mean VFA isn’t open to experimentation with emerging technologies. Ms. Lopez estimates that up to 90% of her tech-savvy staff uses some form of AI tool to save time on routine tasks – whether for record-keeping, reporting, social media management, or proof-reading.
“It’s always a question of how clients will be able to communicate most effectively with their virtual assistant,” Ms. Lopez says. “We’re always looking for ways to innovate and boost efficiency for the business – but it has to serve the client as well as our virtual assistants.”
Local impact
Even as SMBs aspire to expand around the world, the impact on their home countries and towns can’t be ignored. SMBs are crucial to the health of their local economies, providing jobs and generating revenue in their local and regional communities.
Nearly three-quarters of those surveyed say they are the main breadwinners for their families, with these business serving as the sole source of income for the household. That figure rises to more than 80% for Gen Z respondents. In India, for example, Gen Z entrepreneurs are eager to showcase their ambition in their communities, raising their local stature in the process.
Small businesses are also looking in their own backyards for talent.
Respondents are planning to hire an average of 12 new employees in the next year, with 57% coming from the local community. At the same time, most think their local and regional economies have improved over the past two years and more than three-quarters think the next two years will be even better. That bodes well for these SMBs: 60% believe that the performance of their business depends on the health of their local economy.
Where SMBs are looking to hire talent
Conclusion
It is heartening to see SMBs embrace the benefits of globalization. It is certainly an uphill climb for many as they also juggle the daily challenges of running a business, not to mention acquiring fresh capital and talent.
What is clear from this report is that a diverse vendor network can contribute to global aspirations, but that SMBs have more work to do when it comes to setting contingency plans for unexpected events. Such preparation not only helps SMBs weather exogenous threats, but allows them to continue to innovate, expand, and build new revenue streams along the way.
Finally, government can be a powerful partner for SMBs, whether by encouraging the extension of loans or sealing trade agreements that open the door to international growth.
Country Spotlights
Download for country-specific data from the 15 countries surveyed for the SMB Ambitions Barometer
Argentina spotlight
Bangladesh spotlight
brazil spotlight
CHINA spotlight (简体中文)
Colombia spotlight
India spotlight
israel spotlight
pakistan spotlight
Philippines spotlight
Serbia spotlight
South Korea spotlight
Turkey spotlight
Ukraine spotlight
US spotlight
Vietnam spotlight
Payoneer’s SMB Ambitions Barometer 2024 Methodology and sample
The information in this report 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.
