Business confidence for Small and Medium Enterprise (SME) across most sectors is on the rise, according to the latest research by Mastercard.
The inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index found that 76 percent of SMEs in the food, beverage and entertainment sector are optimistic about the next 12 months.
Confidence levels were highest among businesses in retail, closely followed by food, beverage and entertainment.
Forecasts in this sector are also positive, with 72 percent of SMEs projecting revenues that will either grow or hold steady. Almost half 47 percent are projecting an increase.
Access to training, skills and digitization key for future growth
As many regional economies gradually enter the normalization and growth phase, and social restrictions continue to ease, small and medium sized businesses in the MEA region’s food, beverage and entertainment sector have identified access to training and development support (55 percent), upskilling staff (53 percent) and business digitization (50 percent), as the top drivers for growth.
This highlights the opportunities for small businesses that arise from internal transformation as well as industry regulations and trends.
Making sure that SMEs have all the support they need to go digital and grow digital is a key focus for Mastercard. The company works closely with the government, financial organizations and the wider business community to create opportunities for the small business sector.
Solutions that go beyond the restaurant bill
For many small businesses, reducing their dependence on cash through digital payments acceptance has played a major factor in being able to get paid and maintain revenues.
Mastercard offers technology, data-driven insights, and consulting and predictive analytics solutions to empower businesses to acquire new customers, enhance customer loyalty and improve operations.
Mastercard has pledged $250 million and committed to connect 50 million micro, small and medium size businesses globally to the digital economy by 2025 using its technology, network, expertise and resources in support of the company’s goal of building a more sustainable and inclusive digital economy.
As part of these efforts, Mastercard is focused on connecting 25 million women entrepreneurs.
“Due to their very nature, restaurants and entertainment venues rely on physical presence for the best experience, and pandemic restrictions have made this incredibly challenging for SMEs in this sector. But we’ve also seen some wonderful creativity, including virtual experiences, online cooking classes, and pay-now-enjoy-later vouchers to support cashflow. By applying this innovation and tenacity to their strategies in the year ahead, these small and medium sized businesses will continue to drive optimism and economic recovery. Supporting the ecosystem in which they and other SMEs operate, through varied products and services that resolve pain points, is something Mastercard will continue to do as we champion the growth of a diverse and inclusive economy,” said Amnah Ajmal, Executive Vice President, Market Development, Middle East and Africa, Mastercard.
Rising costs and maintaining staff among concerns
When asked about the main thing that keeps them up at night, 55 percent of regional SMEs in food, beverage and entertainment mentioned the challenge to maintain and grow their business was their top issue.
Looking at concerns over the next 12 months, over half (56 percent) identified the rising cost of doing business, while 44 percent cited access to capital.
From an operational perspective, concerns for the next year include maintaining current staff levels (44 percent), training and upskilling staff (43 percent), finding the right talent for new needs (40 percent) and mental and physical wellbeing (39 percent) – highlighting the growing trend around the development of people as a key theme for small business success.
Benefits of a cash-free economy
Growing confidence levels in digital as a business imperative is tied to a deeper understanding and wider recognition among SMEs of the advantages that result from a growing digital economy.
When asked about the biggest benefits of a cash-free economy to their businesses, SMEs in food, beverage and entertainment stated the ease of not processing cash (49 percent), faster access to revenues (46 percent) and more convenient payment of suppliers and employees (45 percent).
The area where most food, beverage and entertainment businesses in the region say they now need support, is in help managing or upskilling teams (54 percent).
SMEs in this sector also want effective regulatory support from government (54 percent) and education through a network of mentors or business advisors (50 percent).
As consumer trends evolve in a post-pandemic world, businesses must adapt and prepare for the future.
Late last year, a Mastercard study showed that 73 percent of consumers in the Middle East & Africa are shopping more online than they did since the start of the pandemic.
As people spent more time at home, the demand for online entertainment also surged with 72 percent of respondents having invested in entertainment subscriptions and virtual stand-up comedy shows, while over five in ten people are spending on online gaming (55 percent) and virtual music concerts (54 percent). More than half (55 percent) had taken a virtual cooking class and 32% have been learning to dance online.
Furthermore, new payments methods are gaining ground and 9 in 10 shoppers would consider making a purchase with an emerging payment technology over the next year, including cryptocurrency, biometrics, contactless, QR codes, digital wallets and wearables.
Consumer passion for the environment is also growing, with 7 in 10 believing it’s more important for businesses to do more for the environment, and 25 percent in the Middle East saying they would stop buying from brands that do not behave sustainably.