Why SMBs need to prioritise their digital strategies

We are racing towards the last quarter of this year and six months have already passed since I last shared an update from our State of Small Business report. Since the early months of the pandemic, Facebook has been surveying small businesses around the world at regular intervals to find out what they’re going through and what help they need.

We recently published the results of our latest survey of more than 35,000 small business leaders, across 30 countries and territories, carried out this July and August. It finds that closure rates are falling around the world in a majority of surveyed countries, a sign that the small business recovery is underway. But there is still a long way to go and many challenges to tackle.

In Asia Pacific, we surveyed small businesses in Australia, Indonesia, India, Pakistan, Philippines, Taiwan and Vietnam. There is both good and bad news from the survey. First, the good news: Majority of SMBs on Facebook in the Asia Pacific countries we surveyed reported that they were operational or engaging in revenue-generating activities. The bad news is that their sales have dropped significantly. More than half of SMBs surveyed said that their sales continue to be significantly lower, leading to cuts in employment. Businesses in Vietnam, Indonesia and Taiwan are struggling the most from the impact of Covid-19 as more than 75 percent say that their sales performance decreased during this time.

There are some silver linings. One is that many small businesses have found success by shifting online. For some, shifting online has been the difference between staying afloat or going under. For others, it’s given them a whole new lease on life. Globally, the use of digital tools has increased during the pandemic, and it’s up again in this latest edition of the survey: 88 percent of all businesses said they use digital tools compared to 81 percent when I last wrote about it in April. More than half of those surveyed expect their use of digital tools to be permanent. In Asia Pacific, nearly 50 percent of SMBs we surveyed on Facebook reported at least 25 percent or more of their sales were made digitally.

The other silver lining is that women-owned businesses in the countries we surveyed in Asia Pacific are doing as well or even better than men-led counterparts in closures and sales performance. Taiwan is leading this trend with 92 percent of female-led SMBs (vs. 80% of male-led SMBs) on Facebook reporting that they were operational or engaging in any revenue-generating activities, followed by Vietnam, Indonesia and Australia. This is an interesting trend as last year we saw the female-owned businesses were consistently harder hit than male-owned businesses. Supporting these gains is important as one Boston Consulting Group study has shown that if women and men participated equally as entrepreneurs, global GDP could rise by approximately 3% to 6%, boosting the global economy by $2.5 trillion to $5 trillion.Take the story of Hayati Fauziyah, founder of Lovely Zia , which takes local Indonesian batik designs international while supporting single mothers in the community who make up 70 percent of her workforce.?

So what does this all mean? Throughout 2020 and 2021, our State of Small Business reports have painted a consistent and sobering picture. But the consistently positive takeaway from all the surveys is the power of digital transformation in helping businesses weather the storm. This is why we continue to invest in new products and tools to help businesses connect with their customers and simplify day-to-day management.

Today, I’m excited to share five key updates that will help businesses meaningfully connect with people:

Ads that click-to-message: Businesses can already buy ads that encourage people to message them, whether in Messenger, Instagram Direct, or WhatsApp. For example, Organicwa , a Thai restaurant, leveraged click-to-message ads to scale up its delivery operations. Now, businesses can choose all the messaging platforms where they’re available to chat, and we’ll default the chat app in your ad based on where a conversation is most likely to happen.

Start a WhatsApp chat from an Instagram Profile: For many small businesses, Instagram is the virtual storefront for customers to discover brands and WhatsApp is the counter to discuss products, answer questions and close sales. Businesses can now add a WhatsApp click-to-chat button to their Instagram profile — and , starting soon, the option to create ads that click to WhatsApp directly from the Instagram app -- so people can start a chat with just one tap. These updates will help small businesses find new customers and get business done.

Lead Generation on Instagram: In the coming months, we will begin testing paid and organic tools to help small businesses find and qualify leads directly within the Instagram app. Advertisers use lead generation ads to connect with customers and connect leads in a more personal way, while reducing costs — like Seoul Spa, a Vietnamese beauty clinic, did with their Messenger campaign , lowering their cost per lead by 72 percent.

Facebook Business Explore to help people discover businesses relevant to themWe will soon expand Facebook Business Explore in Australia, Malaysia, New Zealand, Philippines and Singapore. By putting more businesses in front of interested people who are actively looking for them, Facebook Business Explore will help connect people with new and relevant businesses in one, easy and centralized place. This will also help businesses reach new customers and drive deeper consideration that can lead to purchases.

Lastly, business owners have told us they want more separation between their personal and professional identities. To simplify this, we are testing Work Accounts, which will allow business users to log in and operate Business Manager without requiring a personal account. Businesses will be able to manage these accounts on behalf of their employees and have access to enterprise-grade features like single sign-on integrations, giving them more control over the security of their employees’ accounts. We are testing Work Accounts through the remainder of the year with a small group of businesses, and expect to expand availability globally in 2022.

If you were to take away one thing from all this - it is the importance of business messaging in the post-COVID-19 world. Over the years, we’ve seen how person-to-person messaging has defined the norm for person-to-business communication.?

This is why we will continue to invest in ways to help drive better business results across the customer journey. We see messaging as a powerful way for businesses to connect, support and build a bridge to their increasingly digital-savvy customers.?

My goal in sharing these updates is to bring you along as we reimagine discovery and relevance for people, creators, and businesses. Together, we can build a vibrant digital economy with the potential to drive recovery and the next lap of economic opportunity for all.?