Recent data has revealed that Small and Medium Enterprise (SME) confidence across most sectors is on the rise, despite the impact of the COVID-19 pandemic.
According to the inaugural Mastercard Middle East and Africa (MEA) SME Confidence Index, 78% of SMEs in the retail sector were found to be optimistic about the next 12 months.
The report notes that confidence levels were highest among retail businesses, slightly ahead of other sectors, like food and beverage, entertainment, construction and manufacturing.
In addition, 70% of SMEs in retail are projecting revenues that will either grow or hold steady. Half (50%) are projecting an increase revealed the index.
Access to skills, digital payments and data key for future growth
Training and upskilling staff (55%), acceptance of digital payments (49%), better data and insights (49%), and easier access to finance (49%) have been identified by retail SMEs as the top drivers for growth in MEA, as social restriction conrinue to ease.
This highlights the opportunities for small businesses that arise from both internal transformation as well as industry regulations and trends, says Mastercard.
The payments technology firm says making sure that SMEs have all the support they need to go digital and grow digital is its key focus.
Solutions that go beyond the cash register
Mastercard offers technology, data insights, consulting and predictive analytics solutions to empower retailers to acquire new customers, enhance customer loyalty and improve operations.
The company provides spend insights offering retailers a 360-degree view of their shoppers, with its platforms and services translating those data-driven insights into action.
About $250 million has been pledged to connect 50 million micro, small and medium size businesses globally to the digital economy by 2025 using Mastercard technology, network, expertise and resources.
Amnah Ajmal, Executive Vice President, Market Development, Middle East and Africa, Mastercard said: “The MEA retail sector’s SMEs have shown resilience by prioritizing best practices and really internalizing the power of digital – both in-store and online through contactless and ecommerce. As their digital transformation successes increase adoption in other sectors, the whole ecosystem benefits by sustainably driving commerce forward into a future of growth.”
Rising costs and maintaining staff among concerns
About 56% of regional SMEs in retail mentioned the challenge to maintain and grow their business was their top issue, revealed the Mastercard SME Confidence Index. Looking at concerns over the next 12 months, over half (54%) identified the rising cost of doing business, while 41% cited access to capital.
From an operational perspective, concerns for the next year include maintaining current staff levels (42%), training staff (37%) and finding the right talent for new needs (36%) – highlighting the growing trend around the development of people as a key theme for small business success.
As consumer trends evolve in a post-pandemic world, Mastercard says businesses must adapt and prepare for the future.
The company’s Economic Outlook 2021 estimated that 20-30% of the COVID-19 related surge in e-commerce would be a permanent trend in share of overall retail spending globally.
In late 2020, a Mastercard study showed that 73% of consumers in the Middle East & Africa are shopping more online than they did since the start of the pandemic.