One meta-analysis of SEA SMEs suggests that, despite the increased opportunities to venture overseas, firms were held back by volatility fears

In an analysis of over 60,000 business transactions from over 4,500 companies, and surveys with over 160 executives from small- and medium-sized enterprises (SMEs) in South-east Asia (SEA), some business trends in corporate spending were discerned.

In the face of economic uncertainties, reducing operational costs was an imperative among respondents, as SMEs readied themselves for impending challenges and volatility despite the positive economic growth in the SEA.

Among SMEs surveyed, reducing operational costs (40%) took precedence over the development of new products and services (30%); improving real-time spend management (17%); and finding new supply chain partners (10%).

Other findings
Amid waning pandemic management restrictions, SMEs analyzed were hungry for new growth opportunities overseas this year. Global business travel is expected to reach US$1.4tn in 2024, a year sooner than forecasted. Also:

    • SME owners in the analysis were riding this resurgence of business travel, doubling their travel and entertainment (T&E) in the last two quarters of 2022. This upward trend is projected to continue into the first quarter of 2023.
    • Based on the report findings, firms in the professional services industry (35%) invested the most in business travel. Executives of these firms were keen to budget more for travel spend to expand sales in new markets and reinforce partnerships that were affected by the lack of face time during the pandemic.
    • • 85% or more of SMEs in the analysis were exposed to FX fluctuations with the increase in cross-border payments. This could result in SMEs overestimating or underestimating their overseas expenses.
    • 56% of SMEs surveyed regularly transacted with foreign currencies, including card spend, making and receiving payments, with more than 90% transacting US$37,000 or more.
    • 80% of SMEs surveyed did not have full visibility on company spend.

According to Caecilia Chu, Co-Founder and CEO, YouTrip, which commissioned the study: “In our conversations with SMEs, the issue of reducing operational costs and spend management surfaced numerous times. As companies emerged from the pandemic, they grew even more prudent in the face of continued economic uncertainties. And as borders reopened, the increase in cross-border payments drove greater urgency and need for better spend management.”