Adapting to Change: Lessons from Singapore’s SMBs
The pandemic’s disruption has revealed unexpected opportunities for small and medium-sized businesses (SMBs).
Almost two years into the pandemic, the impact on global businesses is undeniable. However, one less-discussed aspect is how this turmoil has presented surprising opportunities for SMBs, particularly in Singapore.
Mastercard’s recent Recovery Insights report highlights notable trends. In the Asia-Pacific region, 2020 saw a 35 per cent rise in small retailers compared to 2019, surpassing the global average of 32 per cent. These insights shed light on the resilience and adaptability of SMBs, offering a blueprint for sustainable recovery.
A significant shift during the pandemic was the rapid move to online operations. Our research indicates this digital transformation occurred at three times the pre-pandemic rate. Many new businesses have embraced a “digital-first” approach, forgoing physical storefronts to reduce costs and risks. This trend is likely to persist, as location becomes less critical in a world embracing remote work and hybrid office models.
For instance, SMBs in residential areas outperformed those in commercial districts. In 2020, spending at non-CBD small businesses in Singapore reached 104 per cent of 2019 levels. Similarly, small lodging businesses, such as homestays and BnBs, outpaced large hotels during the pandemic, benefiting from the “stay local” trend.
Despite these positive developments, challenges remain. Working capital, particularly for payroll and rent, continues to be a pressing issue. Enhanced access to low-interest loans or extended grace periods could help SMBs maintain momentum. Businesses in city centres might need to adopt flexible strategies, integrating online and offline customer engagement to sustain growth.
Moreover, as Singapore opens green lanes for vaccinated travellers, small lodging operators should prepare to attract international visitors. This could include investments in digital marketing tailored for global audiences and implementing contactless solutions like QR code menus and digital payments.
The pandemic has reshaped traditional business norms, proving that adaptability is key. Many SMBs have excelled in digitisation, adopting innovative methods to meet evolving consumer needs. Moving forward, it is crucial for businesses to build on these lessons, enhancing resilience and ensuring sustainable growth in an uncertain future.
