Singapore SMEs still reeling from COVID-19 – QBE survey

International expansion off the table for most firms

Singapore SMEs still reeling from COVID-19 – QBE survey

Insurance News

By Gabriel Olano

Singaporean small and medium-sized enterprises (SMEs) are still feeling the pinch from COVID-19, with most businesses putting off their international expansion plans, according to the seventh edition of QBE’s annual SME survey.

The survey, which was conducted in the fourth quarter of 2021, polled more than 400 decision-makers from Singaporean SMEs.

Due to the continuing uncertainty caused by the pandemic, SMEs are hesitant to expand, with 60% of respondents being unsure or having no intention to internationalise in the next two years. Roughly one in three of those who indicated they do not see internationalisation on their horizons have a solely domestic presence.

The top three hindrances to internationalisation cited by SMES were travel restrictions for employees due to the pandemic, a general lack of knowledge of other markets, and having sufficient financing or funds for expansion. All three each got around 26% of responses.

QBE observed that SMEs are adopting a more conservative business mindset, with half of those who already have overseas business presence saying they plan to downsize within the next two years. Among smaller internationalised SMEs, 53% said they intend to downsize, with the main challenges identified as cost control, mitigation and streamlining of the business and concerns around the cost of running the business.

“In the last 12 months, SMEs have been carefully adjusting their business strategies, prioritising prudence as they continue to work in a pandemic economy,” said Ronak Shah, CEO of QBE Insurance Singapore. “As many continue to err on the side of caution in 2022, we encourage them to take this time to reassess their business models and operations to give mind to environment-based investments or initiatives that will help provide sustainable business growth post-pandemic.”

While Singaporean SMEs were shy internationally, 59% of respondents expressed optimism that their business outlook would improve in the next 12 months, while 67% of SMEs expect the economic outlook to improve. One in three (33%) expect the size of their business to grow in the next 12 months, up from 19% last year.

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