Canadian SMEs continue to lag on foreign market expansion

UPS Study reports a strong domestic growth for SMEs while international markets remain untapped

MISSISSAUGA, ON, Oct. 12, 2016 /CNW/ - While 74 per cent of Canadian small-to-medium sized enterprises (SMEs) are meeting or exceeding their business goals, many have not yet reached success on the international scale. In UPS (NYSE: UPS) Canada's sixth annual Small Business Challenge survey conducted by Leger, 61 per cent of Canadian SMEs said exports are the key factor for continued growth and success to remain competitive in a global market. And while 57 per cent of Canadian SMEs agree their business will benefit from a low Canadian dollar, only 43 per cent are doing business with other countries outside of Canada and the U.S.

"It's encouraging to see Canadian SMEs are thriving domestically. However, it's important for them to recognize that continued growth relies heavily on expansion, and international exports are key contributors to success," said Paul Gaspar, director of small business, UPS Canada. "Canadian and international governments are focusing on the easy exchange of international goods. Today, three-quarters of Canadian SMEs recognize that Canadian Free Trade Agreements create opportunities within foreign markets by reducing trade barriers. While, 45 per cent of Canadian SMEs exporting to the U.S. said the increase in U.S. de minimis from $200 to $800 has permitted their company to move goods across the border more efficiently and at a lower cost."

Nearly one quarter of SME executives surveyed in this year's Small Business Challenges survey said they plan to expand internationally: 61 per cent are hoping to do business in Europe, while another 42 per cent are setting their sights on South and Central America.

"As international exports and e-commerce continue to be catalysts of growth for Canadian SMEs, a well-planned supply chain is fundamental for success," said Gordon Reed, director of customer solutions, UPS Canada. "In fact, 43 per cent of Canadian SMEs not meeting their business goals identified bottlenecks in their supply chain as a restriction to their business growth."

More than three-quarters of Canadian SMEs said e-commerce is essential to the future competitiveness of a business. Today, 76 per cent of Canadian SMEs exporting to consumers in the U.S. and international markets are more likely to have their website as their main commerce channel.

Canadian SMEs have an opportunity to grow internationally. Their products are sought after due to quality, reputation and the low Canadian dollar; marry this with the continuing rise in e-commerce, a proper and well planned supply chain is a must to enhance current processes and offer an optimal customer experience. 

Almost all (95 per cent) of Canadian SMEs with a supply chain strategy are strong believers it will assist with business expansion into global markets. However, from the Canadian SMEs that do not have a supply chain strategy in place, 48 per cent said their business is not large enough to have one. Although every entrepreneur has a supply chain, they must anticipate and plan for business growth to eliminate business challenges.

According to the survey, 40 per cent of Canadian SMEs identified managing their supply chain to ensure a seamless delivery and coordination of returns as their biggest challenge and one-quarter of respondents said inventory management. 

"On a regular basis, Canadian SMEs should analyze their supply chain to incorporate shifts in e-commerce, international sales, enhance business operations, improve customer delivery and identify areas of improvement," adds Reed.

Additional highlights of the 2016 Small Business Challenges survey include:

  • Of the 74 per cent of SMEs that have met or exceeded their business goals, one quarter of them attribute this to the low Canadian dollar, followed by approximately one-fifth of SMEs citing a boost in e-commerce and expansion to foreign markets
  • Of the 39 per cent of Canadian SMEs that currently do not have a supply chain in place, 9 per cent were unsure of where to find or how to create a supply chain
  • Of the 52 per cent of Canadian SMEs that have a supply chain strategy, 42 per cent partner with a third party
  • Facebook is the second most common e-commerce platform, with 41 per cent of SMEs using the social network for business

UPS Canada celebrates more than 1 million small and medium-sized enterprises in Canada during Small Business Week taking place October 16-22, 2016. For more on UPS' small business solutions, visit ups.com/new/ca

Leger Survey Methodology:
This survey was completed online from August 5 to August 25, 2016 using Leger's online panel, LegerWeb, with a sample size of 300 respondents. Individuals working for, or running a small or medium-sized enterprise (SMEs) spending at least $5,000 annually on shipping were interviewed. Only those at or above a director or senior manager level qualified. A probability sample of the same size would yield a margin of error of +/- 5.7%, 19 times out of 20.

About UPS:
UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the web at ups.com® and its corporate blog can be found at longitudes.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS and follow @UPS_Canada and @UPS_SmallBizCA.

SOURCE UPS Canada Ltd.

For further information: For all media inquiries, please contact: Julie Ibrahim, UPS Canada, mediarelations@ups.com, 905 676 1708

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