Stay ahead of the curve: Top 10 business trends for SMEs in 2023
Even as Singapore’s economic growth slows down in 2023, small and medium-sized businesses (SMEs) still have plenty of reasons to be optimistic this year.
SMEs can re-engage proven strategies and identify their next moves to help make 2023 a year of growth. They can explore new markets, drive workplace productivity and make the most of the external support available to them.
Here are 10 key trends that SMEs can explore to fuel their success in the year to come.
Exploring new markets
Businesses can tap into four new sources of revenue:
1. Mobile and social commerce
More consumers are embracing the convenience of shopping online via mobile devices, especially with social media transforming into a retail channel as well. For example, TikTok has become a popular platform for advertising and selling products. With its live-streaming feature, businesses can better attract and engage with potential customers.
Learning how customers use social media and other mobile platforms to shop and pay will be beneficial. To expand their business online, SMEs can capitalise on the customer trend of going cashless. For example, DBS MAX provides access to a growing base of cashless customers and eases the collection process for businesses.
2. Growing customer interest in environmental initiatives
Green business initiatives will be a hotspot for innovation in 2023. Singaporean consumers are increasingly choosing products that have a positive impact on the planet. While the preference for sustainable products has historically been more prevalent among the younger generations, they have an influence their parents as buyers of all generations are becoming more willing to spend more on eco-friendly products and services.
SMEs of all sizes can do their part to promote sustainable practices and solutions by accessing sustainability financing to support a shift towards greener processes and products. Initiatives such as DBS’ SME Grant Programme will attract customers who gravitate towards products that take part in the circular economy.
3. Bringing the customer experience to the next level
In 2023, Augmented Reality (AR) and Virtual Reality (VR) will become mainstream tools for business. SMEs across different industries can adopt these tools to enhance the customer experience, by offering more immersive engagement that helps keep existing customers and attract new ones.
For instance, AR and VR in the retail sector can help customers virtually browse and shop for clothes and fashion items. They can also help customers visualise the best furnishings and interior design products for their homes.
4. Resumption of travel
International travel headcounts have bounced back to pre-pandemic levels, and ASEAN nations should be back on track to cater to 152 million tourists by 2025. As travellers revisit Southeast Asia, SMEs in Singapore can focus on attracting foreign visitors.
SMEs can partner with local travel agencies to get referrals for their business and offer discounts and perks to visitors. With many travellers also relying on social media and other online sources for directions and advice on the best places to visit – online marketing and social media can help SMEs reach tourists easily.
How can SMEs increase their productivity?
There are ways that businesses can tap into to boost their profit margins.
5. Business digitalisation and automation
In a robust digital economy like Singapore with advanced digital infrastructure and a vibrant tech start-up ecosystem, businesses should consider investing in digital solutions. Many businesses have started digitalising, and this year they should accelerate their digital efforts.
SMEs can become more agile by automating processes in accounting (invoices, payments, and financial report generation), HR activities (onboarding, payroll processing, employee time tracking, and performance reviews), supply chain management (inventory management, tracking, and order fulfilment) and more.
For example, businesses can increase access to working capital by making use of DBS and Xero’s hyper-personalised lending solution. Businesses using the Xero cloud-based accounting software can share their records with the bank to provide a more seamless view of their cashflows.
Increased access to cutting-edge developments in artificial intelligence (AI), cloud, and Internet of Things (IoT) in Singapore helps SMEs streamline operations and drive productivity. For example, the latest breed of AI-powered chatbots is making customer support more efficient for businesses.
6. A spotlight on the employee experience
With the Great Resignation and quiet quitting, business owners should adapt by coming up with different ways of improving their work environment. Remote and hybrid work will become more common in 2023, as businesses strive for greater flexibility and cost savings.
SMEs can adopt digital collaboration tools for file-sharing, online communication, project management, and virtual workspaces. With these tools, teams can stay connected and increase their work productivity regardless of their location. By supporting remote work, businesses can reap the benefits of mitigating staffing shortages and maximising Singapore’s talent pool.
7. Business and employee wellness
The business environment has seen a lot of uncertainty over the last few years. It is imperative that SMEs prioritise employee health and wellness to ensure uninterrupted operations and business longevity. They can offer health benefits, access to mental health support, and flexible work hours to support a better work-life balance.
Such initiatives can help reduce the likelihood of burnout and create a more positive work environment. With proper insurance, business owners can also protect their assets, workers, and themselves.
What are the trends in the business environment which will power the success of SMEs?
SMEs can stay competitive by tapping external sources of support.
8. Regionalisation and in-sourcing supply chains
Singapore will continue to serve as a gateway to ASEAN markets for global businesses, and thus an ideal base for multinational companies. Large corporations in these regions are striving to make their supply chains more resilient. They may look inward to leverage intra-regional economic linkages and alternative suppliers.
With the right resources and support, SMEs in Singapore can increase their profile in the supply chain in 2023. They can become reliable suppliers to big companies, helping to create more resilient supply chains.
9. Ongoing government support
The Singapore government will continue to simplify business regulations and offer incentives. For example, SMEs can receive support from the government’s Productivity Solutions Grant (PSG) scheme.
Under PSG, businesses can receive a grant to fast-track their onboarding of new technologies. The PSG will enhance its support level to 80% until 31 March 2023 for eligible businesses in the Food Services and Retail sectors.
10. Easier access to financing
SMEs looking to grow require a reliable source of working capital and cash flow. Yet managing finances becomes more challenging as a business expands.
Thanks to new digital banking solutions, SMEs now have simpler ways to access financing options in 2023. For instance, DBS accepts digital loans and offers an application process via SingPass with 30% less paperwork compared to previous methods. Businesses can take advantage of this to support their goals of growing their sales and operations in the coming financial year.
Fuelling growth in 2023
SMEs can get ahead of the curve by capitalising on the ten trends we’ve listed above. In the coming year, technological solutions and financing opportunities will underpin growth and expansion.
DBS offers a range of services and solutions that can help businesses support their growth objectives. Get started today by opening an account with us.