- PayPal's 2024 Business of Change Report uncovers the growth
barriers Canadian small-medium enterprises are facing and the
potential opportunities that exist with operating online.
- 47% of Canadian online small business owners admit they have
not expanded in the last three years – with a lack of technical
expertise as a leading barrier to growth for more than half (59%)
of respondents.
- 70% of SMEs that sell online believe it is important to
invest in technology and Artificial Intelligence (AI) skills to
adapt to a rapidly changing online environment
TORONTO, May 22, 2024
/CNW/ - While nearly half (47%) of all Canadian online small-medium
enterprises (SMEs) report their business has not expanded in the
last three years, this lack of growth hasn't dampened their
optimism. Eighty-two per cent of SMEs believe that with the right
strategies to overcome barriers, their business has the potential
to experience decent growth.
PayPal's 2024 Business of Change
Report1 reveals more than half (63%) of
online businesses plan to expand their business online in the next
one to two years, but nearly six in ten (59%) feel the lack of
technical expertise will limit their business' growth. Surveying
500 small business owners across Canada, this report uncovers that although the
majority (88%) of online Canadian small business owners agree
online sales are key to expanding their business, 66 per cent say
that setting up a business has been harder than they thought.
Barriers to
growth
The research delves into the primary barriers Canadian SMEs
surveyed perceive as potential hindrances to their short-term
growth plans. These include:
- Challenging economic climate (42%)
- Competition in the industry (36%)
- Consumers purchasing less (32%)
It isn't just external factors that business owners feel will
limit their ability to expand – they feel a lack of business
confidence and skills will hold them back. Almost half (48%) of
respondents identify acquisition of new customers as a significant
challenge in expanding their online presence, whereas more than a
third (33%) face difficulties in boosting customer conversion
rates, and a quarter (24%) grapple with cashflow
management.
What's more, one in five (19%) say they find it difficult to
know which payment methods to offer, such as instalment payment
options like buy now, pay later or offering a range of digital
wallets that consumers prefer to pay with.
"With over 80% of online sellers encountering growth hurdles,
it's imperative that we help them overcome roadblocks," said
Nitin Prabhu, Vice President, Small
Business and Financial Services, PayPal. "With PayPal Complete
Payments, our most advanced offering in the market, we're committed
to simplifying the complexities faced by small business owners in
Canada. Our comprehensive solution
fosters growth, provides advanced fraud protection,
and streamlines cross-border trade, empowering entrepreneurs to
thrive."
Recent research shows there were over 70,000[2] reported
cybersecurity incidents in Canada
in 2023, marking a 25 per cent increase from the previous year. In
a world where cybersecurity risks continue to be a threat, tackling
the day-to-day responsibilities of operating a business online
isn't the only thing Canadian small businesses have to worry
about.
Nearly half (46%) report they do not feel prepared about their
ability to protect their business and customers from fraudulent
transactions. This is in addition to 43 per cent who are worried
about their ability to manage and protect customer information
online.
Looking Ahead
Despite the sentiment around short-term growth, Canadian small
businesses that sell online are continuing to seek different
strategies and tools to increase their impact. This motivation
comes from more than half (61%) of online small business owners who
believe the future is bright in Canada.
To compete on the global arena, many are looking to expand
beyond domestic borders and be a part of the global small business
community, with 42 per cent anticipating an uptick in international
sales this year. This builds on the 40 per cent who report that
cross-border sales have helped contribute to revenue growth in the
past year.
Additionally, 63 per cent of Canadian SMEs report that giving
shoppers more choice in how they can pay will be important in
helping them turn prospects into customers and grow sales,
reinforcing the value of being able to reach different markets and
exchange in their local currency. To manage these transactions, 80
per cent feel it's important for small online businesses to have a
comprehensive suite of solutions through a single integration to
ensure they have a strong and user-friendly platform both in the
front and backend to keep up with the demand.
Reflecting the belief that digital transformation will be key to
their future growth, 70 per cent of SMEs believe it's important to
invest in technology and AI skills to adapt to a rapidly changing
online environment. In 2024, Canadian SMEs say they will be
investing in areas such as improving their online and social media
sales, with 51 per cent planning to ramp up sales efforts through
these channels to foster growth. Other targeted areas for
investment include online marketplaces (39%), international sales
expansion (28%), and reinforcing online security and payment
methods (17%).
For more information on PayPal's suite of online payment
solutions for small businesses, please
visit www.paypal.com/ca/business/accept-payments.
About PayPal
PayPal has remained at the forefront of the digital payment
revolution for more than 20 years. By leveraging technology to make
financial services and commerce convenient, affordable, and secure,
the PayPal platform is empowering millions of consumers and
merchants in more than 200 markets to join and thrive in the global
economy. For more information visit https://www.paypal.com/ca/home.
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1 PayPal's 2024 Business of
Change Report of 500 CA SME owners conducted by OnePoll in April
2024.
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2
Source: Harvard Western Insurance (February 2024)
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SOURCE PayPal Canada