According to the ninth edition of the Report on the Situation of Micro, Small and Medium-Sized Enterprises in Poland prepared by Bank Pekao S.A., Polish companies are continuing their international expansion, gaining a competitive edge on global markets with their products, services and technologies.
The Report shows that a vast majority (68%) of medium-sized enterprises export their products and services primarily to Germany. The German market readily embraces the offer of Polish exporters; yet, its main asset is the fact that it is so close. Other popular expansion directions include: the United Kingdom and Northern Ireland (27%), France (22%), Netherlands (18%), Czech Republic (15%), Slovakia (8%), Sweden (12%) and Italy (9%). The market proximity and costs of logistics and transport to a large extent determine expansion directions (in particular in the case of small service providers).
Nearly half of the surveyed exporters believe that it is more profitable to sell on foreign markets than on the domestic one. Firstly, this results from a favourable exchange rate. Secondly, it may be a remedy to reduced or zero demand on the domestic market. What is more, companies are of the opinion that a foreign market may often offer more growth opportunities to businesses, with foreign customers willing to pay more for the same goods or services. That is why businesses tend to invest in getting new contracts abroad and do not confine themselves to the domestic market.
Medium-sized enterprises have a competitive edge abroad mainly owing to the price (54%) and the quality of their products and services (49%). As further assets of their business activity, companies mention fast and timely delivery of their products and services to foreign markets, along with uniqueness, diversity and availability of these products and services.
According to the results of the Report, the export dynamics was on average more than twice as high as the GDP growth rate in recent years. It is also clear that the stronger presence of Polish businesses on foreign markets has a good effect on the rate of economic growth in our country.
The main problems faced by SMEs that wish to sell their products and services abroad are entry barriers and the risk of staying in business on a given market. According to the Report, the most common barriers experienced by medium-sized companies include: competition of large businesses (28%), currency risk (44%), problems with hiring new employees (29%) and competition abroad (27%). The inability to verify the contractor (12%) is in the top five most challenging barriers for medium-sized enterprises.
According to the research, medium-sized enterprises suffer from extended payment terms (21%) and delayed payments from foreign contractors (19%) more than small businesses. The costs of intermediaries also play a role here, in particular for medium-sized enterprises: 19% of businesses said this is a problem.
Respondents were also asked if the introduction of the euro currency in Poland would be good for export activity. As many as 70% of medium-sized enterprises welcome this solution, saying it will have a positive effect.
The Polish SME sector is facing many challenges as regards exports financing. Polish companies on foreign markets are often forced to compete with entities with greater equity, which can offer very attractive financing conditions and extended payment terms to their recipients (importers). They also have to learn how to manage the risk of outstanding payments for performed contracts, and are looking for solutions that would reduce this risk in international transactions.
RSM Poland, being aware of the problems faced by Polish exporters from the SME sector, tends to support domestic businesses in their development abroad. Bartosz MIŁASZEWSKI, Managing Partner at RSM Poland, said: These companies need a trusted business partner who will support their expansion and make it easier to run businesses abroad. We can provide such services without any problems. Our clients are offered advisory at every stage of their business. As a member of RSM, a leading network of advisory and audit companies, with 750 offices in 116 countries, we have both the expertise and the resources to provide services to our clients practically all over the world. 40 per cent of our clients are companies that work with RSM also in other countries. The constant and close collaboration with our foreign partners, being recognised companies and trusted professionals, allows us to successfully help our clients to expand to foreign markets and grow anywhere they wish to do business.
For detailed information on the expansion of Polish SMEs into foreign markets please read the Report available here: https://www.pekao.com.pl/raport-msp/wyniki-badan.html.