The evolution of SMBs
Over the course of the last decade, countries around the world displayed a new economic attitude toward small and medium-sized businesses (SMBs), recognizing their contribution to economic growth and stability.
Consequently, smaller brands are taking up a growing piece of the pie, showing consistent growth across all regions.
While countries made major moves such as funding for start-ups, consumers are also showing a shift in attitude towards those brands.
Official definitions of SMBs are usually centered around the number of employees, total revenues, and contribution to GDP—but how do consumers themselves define them?
According to NielsenIQ data, among the leading traits according to global respondents are that smaller brands tend to be “local” (33%), “independent” (31%), and “unfamiliar” (27%). On the other hand, large brands are viewed as “very popular, recognizable, or world-renowned” by 46% of those surveyed.
These distinctions form a very compelling baseline for brand perception, where small and medium-sized businesses can strive to hone and create demand for their strengths as new, different, or locally affiliated options for consumer interest.
A quick look at SMBs in Africa and the Middle East
In comparison to other regions, SMBs in Africa and the Middle East can be considered ”late bloomers.” However, this does not deny the fact that the regions’ growth progression is consistent and has potential.
Further investigation into the region shows that the market to watch is Nigeria, and while the pace of growth might be slow overall, the impact of SMBs on FMCG market growth is noteworthy.
Consumers evolve toward smaller brands
The pandemic shifted consumer buying dynamics in more ways than one, and a preference for smaller brands (versus well-known and popular brands) was one of them.
NielsenIQ’s global study, the 2022 Brand Balancing Act*, shows that more than half of the respondents in Africa and the Middle East (54%) have started buying a greater variety of brands across multiple categories. The highest ranking on that sentiment was Egypt at 65%.
It is also important to note that in Egypt a phenomenal 70% of respondents claimed that they prefer to buy locally made products. Going over to South Africa that sentiment is shared by 55% of the respondents.
Meanwhile, Saudi Arabia presents a remarkably interesting case. SMB market share is lagging in terms of pace of growth and influence, but on the other hand, consumers are ready for what they have to offer. In fact, 59% of Saudi Arabian respondents plan to buy small brands. They find them better suited to their needs and 68% note they are the more cost-efficient option.
What’s next for SMBs?
Market and consumer indicators show signs of an indisputable fact: the future belongs to SMBs.
There are three pillars of success for you as a small business owner:
- Get others to believe your vision by highlighting growth potential and opportunities
- Understand your consumer
- Stay agile with the market changes
It is critical for entrepreneurs and key decision makers for small manufacturers to stay connected to the most accurate and up-to-date information. Be sure to take the necessary steps to ensure you are keeping up with the ever-changing SMB landscape.