LONDON-(BUSINESS WIRE)–Payoneer (NASDAQ: PAYO), the commerce technology company powering payments and growth for the new global economy, today released findings from its UK e-commerce survey. The answers reveal some of the biggest issues facing UK businesses at the moment.
Following the UK government’s Autumn Statement setting out a range of new measures aimed at protecting UK small businesses, Payoneer’s research details issues including Brexit, COVID-19 and the cost of living crisis. The findings show that the uncertain economic landscape, combined with skills shortages in the labor market, is having a huge impact on the UK economy. Most importantly, Payoneer’s latest research highlights some of the ways SMBs are looking to combat these issues. Key findings include:
Almost half (41%) of businesses surveyed say they only expect business to become more difficult over the next 12 months
64% of businesses say they expect economic uncertainty to be the biggest threat or challenge to their business over the next 12 months
Over two-thirds (68%) cite reduced sales as a direct consequence of Brexit
Over half (53%) of respondents say they see the rising cost of living as a barrier to investing more to expand overseas sales
In addition to some of these key challenges, retention and recruitment is another difficulty for UK SMEs, with over a third (34%) saying Brexit has had an even greater impact on this than itself a pandemic. The rising level of economic inactivity in the UK was also on the agenda last week with the Work and Pensions Secretary, Mel Stride, tasked with tackling the number of workers leaving the job market. Along with staffing issues, the cost of living crisis looms large, with 62% saying inflationary pressures will be their biggest threat in the coming year. Chancellor Jeremy Hunt confirmed in his Autumn Statement that UK inflation is expected to be 9.1% this year and 7.4% in 2023.
To address these challenges, 46% of respondents now see direct-to-consumer (DTC) sales as the biggest opportunity for their business in the next 12 months, with 38% looking at social commerce. Not content with just finding new places to sell, over half (58%) say they will look to bring new deals and offers to consumers, as well as price freezes (31%) in the next 12 months as increasingly more are looking for other ways to survive. Almost 1 in 10 (7%) look to the metaverse.
Despite the bleak outlook for many, there were grounds for cautious optimism. With less focus on brick-and-mortar businesses, and consistent with earlier findings around DTC sales, nearly two-thirds (62%) say they are likely to expand their online presence in the coming year. Fortunately for many, the government also announced last week that it would not go ahead with the introduction of an online sales tax. By expanding their online presence, businesses are able to reach more customers across borders and over a third (36%) say they want to enter new markets in the next 12 months. In particular, reduced sales in Europe have led some firms to develop other global opportunities, with 15% looking at North America and 9% at Asia.
James Allum, SVP of Payoneer Europe, commented on the findings: “The consequences of unforeseeable successive external events are devastating for so many and a huge challenge for global trade. Fortunately, the digitization of trade means that now more than ever British businesses can participate in the global economy and take advantage of previously unavailable opportunities. We hope these capabilities will be critical as businesses struggle to overcome all these obstacles.”
The full Payoneer report can be found here.
About the research
In September 2022, Payoneer surveyed 130 small and medium-sized businesses (SMBs) in the UK retail sector that sell online and export overseas, to marketplaces or direct-to-consumer (D2C) to identify the impact of macro events , such as the economic downturn, Brexit or the pandemic, about e-commerce in the UK and how business is affected by it.
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