Ukrainian business is demonstrating resilience in the face of a full-scale war and finding new tools for development. The share of companies operating at full capacity has increased, and they have stopped losing clients and customers, which indicates that business activity will stabilize in 2023. More and more Ukrainian companies are finding a source of growth in entering foreign markets.
This data is published in the annual Kyivstar Business Survey, which is based on a survey of business representatives of various sizes and industries.
“Kyivstar works closely with Ukrainian business as a reliable partner and provider of innovative services. In order to offer relevant solutions, we constantly research changes in the business environment and the transformation of our partners’ behavior. The results of this survey show a tendency to increase business activity, as well as more intensive implementation of business innovations, revision of strategies and portfolio of goods and services,” said Konstantin Vechir, B2B Director of Kyivstar.
The situation has improved
The overall business situation has improved. The majority of surveyed companies (62%) are operating at full capacity, another 24% are operating with certain restrictions, and 5% have closed. The reasons for closure varied. One of the reasons was the mobilization of employees. However, some owners and managers managed to run their companies even from the ranks of the Armed Forces.
More and more companies are entering foreign markets. Over the past year, Ukrainian businesses have managed to strengthen international cooperation. Over the past year, the number of companies working with foreign markets has increased from 4% to 17%. These are mainly representatives of IT and industrial production.
Employees are returning to their offices. Almost 50% of companies worked completely offline in 2023. The hybrid format of work remains important (32%), but is no longer as popular as before. Only 18% of companies worked entirely remotely within Ukraine, and 3% from abroad.
Companies’ profitability is low, but there is progress. 32% of surveyed companies reported an increase in profits, compared to 20% in 2022. At the same time, 48% of companies decreased their profits, compared to 58% in 2022. Financial stability was maintained by 6% of companies that did not record any changes in profits.
Businesses continue to adapt their work processes. The most popular changes include redistribution of employee responsibilities (38%), short-term planning (31%), and changes in usual business processes (29%). 30% of companies were forced to reduce staff, but at the same time, 14% of companies expanded their staff.
New technologies and channels
Companies are actively using new technologies to optimize their operations. These include artificial intelligence (AI), cloud services for document management (e.g., Microsoft 365), QES, CRM, transition to a new IT platform, mobile application, chatbot, GPS transport monitoring service, tools for remote work, use of alternative energy sources, etc.
Overall, AI, cloud, and CRM are the most relevant technologies in 2022 and 2023.
Participation in events, exhibitions, and conferences has become one of the most popular channels for attracting new customers (almost 30%). These are mainly representatives of IT, medicine and pharmaceuticals, and manufacturing. Publications on media resources are in second place (25%), and social networks are in third place (24%).
The importance of attracting an audience through paid channels (ppc) and banner ads has decreased. Instead, the number of companies that started attracting customers through outdoor advertising has increased. At the same time, radio and television have not been popular for the second year in a row. They are sometimes used as an additional advertising channel by large companies.
Expert opinions
So, in 2023, companies changed their work processes:
- redistributed the functional responsibilities of employees,
- used short-term operational planning,
- The staff was being reduced,
- accelerated decision-making,
- adapted the range of goods and services,
- used artificial intelligence in their work, etc.
The number of companies implementing short-term planning for a month has decreased (from 41% to 36%). And the share of companies planning for a year or more has increased (from 17% to 26%).
Overall, the business situation improved in 2023 compared to 2022. Businesses resumed operations, with most companies (over 60%) operating at full capacity and almost a quarter operating with restrictions. Fewer companies suspended their operations.
So far, Ukrainian business is mostly focused on the domestic market rather than on foreign markets. Therefore, almost all regions have seen an increase in company activity compared to last year. However, we can hope that Ukrainian businesses will become more active in global markets.
