Founder of Virtue Drinks, Rahi Daneshmand, says international trade now accounts for 40% of his business
While the coronavirus lockdowns led to people being told to stay at home, more small businesses spread their wings to sell around the world, new research shows.
Two thirds of small businesses experienced a growth in online sales since the start of the pandemic, according to a Mastercard report, with 68 per cent of SMEs planning to do more business internationally.
A rapid acceleration of digital online sales helped drive this, but the shift online also helped open up conversations that people were now willing to have remotely.
Clean energy drinks firm founder, Rahi Daneshmand, says his Virtue Drinks brand ramped up its international trading, as the UK’s severe lockdown meant many retailers and supermarkets weren’t considering new brands
But more opportunities opened up from abroad and Rahi said: ‘The focus abroad was eased by moving conversations digitally, which allowed us to talk to international buyers more easily.’
‘Pre-pandemic – we were doing some international business, but it wasn’t very proactive. We were in high end stores and not in mainstream retail, which is where we are now. Before, 25 per cent of the business was international whereas now it’s 40 per cent.’
The company, which is about go live in Netherlands, France and Ireland this year, says business was also fuelled by the demand for health products and boosted by investor and footballer Chris Smalling who’s helping distribute the product in Italy.
Stephen Grainger, executive vice president, Mastercard says fast and predictable payment solutions are vital
Mastercard said that its survey conducted internationally revealed that 73 per cent of small businesses said the ability to receive online cross-border payments from doing business abroad helped them survive in the pandemic.
As local businesses went into lockdown and retailers closed themselves off to new and emerging traders, being able to conduct business abroad proved a vital lifeline the study found.
Stephen Grainger, executive vice president, Mastercard said: ‘It has never been so important to ensure safe, convenient and reliable cross border payments are in place for businesses across the world.
‘As small business owners embrace new ways of operating in a post-pandemic world, it’s clear that fast and predictable solutions are vital to companies looking to expand into new markets.
‘While real borders have been closed throughout the pandemic, keeping payment borders open has often allowed many small businesses to survive a challenging year – finding new markets to do business with, with new global suppliers and customers.’
Mastercard’s researchers surveyed 1,532 firms across ten countries including the United Kingdom, UAE, Saudi Arabia and South Africa.
Yonder, which conducted the research on behalf of Mastercard, surveyed 1,532 firms across ten countries including the United Kingdom, UAE, Saudi Arabia, South Africa, China, Singapore, India, USA, Canada and Mexico between November and December last year.
It showed that traditional operating methods, such as customers browsing brick and mortar shops, had been significantly affected and that there were more opportunities for online business through increased cross border trade.
Disruption to domestic supply chains led companies to source and rely on supplies from elsewhere, which also catalysed cross-border trade.
Half of Chinese businesses admitted to using suppliers and services outside of China – more than they were before the pandemic.
While having people on the ground mattered in the past, more firms found that a physical footprint wasn’t necessary during the pandemic as it became more acceptable to enter and transact within new markets digitally.
Increased optimism in spite of challenges
The report also focused on the challenges that many small businesses have faced, with many reporting a drop in earnings by 43 per cent.
South African business owners recorded the biggest loss (60 per cent reduction in earnings) with the UK closely behind (52 per cent reduction in earnings).
According to Mastercard’s 2020 global state of pay research, 75 per cent of small businesses felt the pandemic also had a negative impact on their cash flow.
However, despite a challenging year, 55 per cent of small business owners across the world stated that they felt optimistic about their business’ chances of recovery this year.
Natalie Neal founder of NKrush – a sport event company, that specialises in motorsport, automotive and sailing – admits to having a positive outlook.
‘I am 100 per cent optimistic. Everyone pulled together, during the pandemic, and no one wanted things to fall apart. Sponsors of teams didn’t tell us “we’re not getting value for money”.
‘Everyone realised what’s going on and are itching to get back to some sort of normal. We had clients thanking us for finding ways to encourage them to stay in sport and highlight how they were getting value for money. As soon as the bans lifted we picked up new customers as they want to get ‘back into some sort of normal’ and get back to travel and business.’
Small Business Essentials
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