 "72% Indian firms expect higher spending on travel, entertainment: survey")
Investment in technology is expected to boost business-to-business (B2B) spending in India in 2023, followed by expenditures on travel, entertainment, and related expenses, revealed a survey on Tuesday.
The survey commissioned by American Express with the Centre for Economics and Business Research (CEBR) found that a significant 72 per cent of Indian businesses foresee a notable upswing in B2B spending, surpassing the global average of 49 per cent.
“The surge in B2B spending in India is fueled by technology investments leading the way with 88 per cent of businesses planning to spend more on it in the rest of 2023 compared to the first half of the year,” said Trendex: B2B edition.
Trendex: B2B edition, commissioned by American Express with the CEBR polled 513 senior decision-makers in India overseeing a minimum of three expenditure categories. The businesses surveyed included private enterprises, MSMEs as well as large businesses.
According to the survey, another key factor driving B2B spending is business travel, with 72 per cent of businesses anticipating higher spending on travel, entertainment, and expenses. Notably, the Covid-19 pandemic severely restricted business travel. Reports have earlier suggested that business travel is likely to come back to 2019 level by 2024.
Source: American Express
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Spending priorities of Indian businesses as per the survey:
- 88% of businesses plan to allocate more funds to technological advancements, driven by the need to improve payment speed and effectiveness (71 per cent), enhance productivity (69 per cent), and meet customer demands for digital products (63 per cent).
- 79 per cent of businesses aim to increase investments in advertising and marketing, with a focus on exploring new marketing channels (69 per cent), targeting international markets (58 per cent), and promoting new products and services (58 per cent).
- 72 per cent of businesses expect increased spending in this category, with a primary aim of attending more industry events (68 per cent) to network, gain insights, and explore partnerships. Businesses are also expanding domestic (63 per cent) and international (60 per cent) business travel to grow their reach and seize opportunities.
- Anticipated spending also includes IT and technology consultancy services (61 per cent) to leverage technological advancements effectively and increased accountancy/financial advice (59 per cent) for financial challenges and potential restructuring. The rise in IT and technology consultancy is the top sub-category driving this trend.
The survey also revealed that 92 per cent of Indian businesses consider improving security around payments as a top priority. A large share of Indian businesses (90 per cent) also agree that managing cash flow and working capital has gained greater significance over the past year.
- 84 per cent of Indian businesses have partially automated payments to suppliers, and 39 per cent have fully automated their payment processes.
- Businesses with automated processes reported faster and more accurate invoicing (58 per cent) and reduced human error (54 per cent).
- 86 per cent of firms plan to start or increase automation for receiving payments from customers, while 83 per cent intend to enhance the current level of automation for payments to suppliers.
- For businesses not fully automated, 34 per cent seek partners to assist in automating their payment processes.
“As the business landscape becomes increasingly competitive, the need to adopt smarter and more efficient payment solutions becomes paramount. For example, corporate cards, with their offering of extended payment terms, rewards on B2B expenditures, and seamless payment convenience, can make their spends more rewarding and efficient, effectively earning as they spend," said Manish Kapoor, Vice President and Head, Global Commercial Services (GCS), American Express Banking Corp., India.