Virtual business debit card company Spendesk have released their 2019 ‘spend trend report’, giving some insight into what European businesses are spending their money on.
Looking at spending patterns of more than 1000 Spendesk users in 35 European countries, making 800,000 transactions totalling over €120million, the ‘Spend Trends Report 2019’ has some interesting takeaways and trends.
One thing that stands out in the report is how vital online services are for modern businesses. Spendesk CFO Fabien Dawidowicz said: “The most striking finding from this report is just how important the Internet economy has become.
“Whether it’s for marketing, subscriptions, or travel, businesses are taking advantage of the convenience and savings they can find online.”
Below are five key takeaways from Spendesk’s report.
1 – Amazon most popular vendor for business spending
The most popular place for businesses to spend their money is the Amazon Marketplace, which had almost twice as many marketplace purchases as any other supplier, with Uber in second at 22,255.
Out of the 800,000 transactions, 41,516 were spent in the Amazon Marketplace. Both Amazon and Amazon retail were also in the top 10, and when the three are combined they made up more than 76,000 transaction, which is closer to four times as many as the any other vendor on the list.
Amazon topping the list was true no matter the company size or country they operate in, and the spending was not just on office supplies; modern businesses are becoming increasingly reliant on Amazon services to support their IT infrastructure.
The online retail giant also dominated the amount spent, leading the likes of Apple, Google and Facebook with €8.68M, followed by Apple with €5.28M.
This shows how many businesses are following consumer trends. While we think of Amazon as a consumer destination, these figures show that modern European businesses have embraced Amazon in the same way consumers have as the go-to marketplace.
2 – Uber is now widely used on Europe
Despite backlash from countries, cities and established taxi drivers, Uber is now the go-to travel choice for businesses.
The 22,255 transactions in Spendesk’s sample put it at the top of the list for travel purchases, and with twice as many transactions as traditional taxi trips (13,632).
Factors such as the simplicity of booking and paying for an Uber, as well as the fact that every ride is logged removing the need to ask for a receipt for expenses has likely contributed to this trend.
Much like with Amazon, so many employees use Uber in their private lives, they are likely using Uber out of habit and personal preference.
The one exception to this trend was Germany, with traditional taxis remaining the preferred option. However, Uber is currently only available in certain German cities and is likely to overtake as it is adopted in more.
3 – SaaS spending going up
The data in the report goes back to 2016, and even in this short amount of time there has been a significant increase in company spending on subscription software, which is used to support critical business functions including finance, marketing, sales, operations and IT.
Between 2016 and 2019, SaaS (Subscription as a service) spending increased by 267.91%.
Businesses are using more tools than ever that require subscriptions in favour of developing their own, which is a more costly exercise in terms of both time and money.
4 – Travel spending also on the rise
Business travel expenses are increasing again having slowed significantly following the financial crash of 2008, with travel spending more than doubling between 2016 and 2019, rising by 217.85%.
Companies are sending teams out of the office to meet clients, attend conferences and visit other offices, and according to the data they are spending more than ever to do so.
This could suggest that travelling for business is becoming more common, or that those travelling are spending more.
New players in the market such as Uber, Airbnb, Kayak and Skyscanner give businesses added flexibility when booking travel and as these businesses become more widely used by consumers, this habit is transferring into the world of business as well.
5 – Marketing teams spend more than other departments
A large chunk of business spending is online in social media and search advertising, with Google, Facebook and LinkedIn among the top 10 vendors for business spending.
Marketing teams do also have more traditional expenses such as travel, design and collateral, and this combined with the online spending puts them at the top of the list with €6.15m being spent by marketing teams. This reflects the rise in Digital Marketing and its importance to modern businesses.
Administrative and tech teams are in second and third place respectively. Administrative teams tend to pick up other company expenses such as catering, repairs, furniture and decor, while tech teams are responsible for the spending increase seen in SaaS.