International expansion on the backburner for 60% of SMEs

Six in five expect pandemic measures to worsen in the next 12 months.

Singapore small and medium enterprises (SMEs) continue to stagger beneath the blows of the COVID-19 pandemic with the majority of Singapore SMEs saying that international expansion is still on the backburner according to a survey by QBE Insurance (Singapore) Pte Ltd.

The survey revealed that 60% of Singaporean SMEs are unsure or have no intention of expanding internationally in the next two years. 29% of those who indicated they do not see international expansion on their horizons have a domestic presence only.

The top three concerns hindering international expansion plans cited by the surveyed 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.

QBE said SMEs in Singapore are adopting a more conservative business mindset, with half of those who already have a business presence overseas intending to downsize in the next one to two years. For small SMEs, 53% of them who are already internationalised intend to downsize, with their main challenges cited being cost control, mitigation and streamlining their business, and addressing 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. 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,” said Ronak Shah, chief executive officer of QBE Insurance Singapore.

The survey was conducted in the fourth quarter of 2021 and surveyed more than 400 SME decision-makers in Singapore.