Key Highlights

• Supply Chain Finance (SCF) Service, also known as supplier finance or reverse factoring, is a financial service that optimizes the management of working capital and cash flow within the supply chain of businesses. In SCF, a financial institution facilitates the timely payment of invoices between a buyer and its suppliers. This service helps businesses, especially large corporations, to extend their payment terms without adversely affecting their suppliers' liquidity. Here's how it works: A financial institution partners with the buyer's company and assesses the creditworthiness of the buyer. Once approved, the financial institution agrees to pay the supplier on behalf of the buyer, often at an earlier date than the agreed-upon payment terms. In return, the seller receives the remaining amount from the price he paid, minus any discount or fee. This arrangement benefits both parties; The buyer can improve working capital by extending payment terms, and the seller can improve cash flow by receiving early payment. SCF's services guarantee the quality of products, reduce financial risks and strengthen the relationship between buyers and sellers. It provides suppliers with reliable resources, allowing them to manage their operations efficiently. For buyers, it strengthens the relationship between suppliers, makes the supply chain stable and reliable, and contributes to overall economic growth and stability.

• The market size of the worldwide Supply Chain Finance Service Industry surpassed USD XX Billion in 2023, and by 2032, it is projected to reach USD XX billion, boosting at a CAGR of XX%.

• In August 2022, Hexr announced the launch of its new Voronoi helmet with design. The launch is expected to drive the market share of the company in the forecasted period across the globe especially in European region.

• The demand for financial chain services (SCF) is driven mainly by the need to improve operational management and increase efficiency throughout the supply chain. Businesses, especially larger ones, are realizing the importance of good cash flow to support operations and drive growth. SCF services provide integration that allows buyers to extend payment terms with suppliers, save cash and ensure timely delivery of payments to customers. This change helps improve relationships between suppliers, making it an attractive option for companies looking to promote their products. In addition, changes in interest rates and economic uncertainties in the global economy cause businesses to seek stable financial solutions. SCF services ensure stability and predictability of cash flow, thus reducing financial risks due to business changes. In addition, as business continues to globalize, the provision of financial services supports cross-border trade by providing financial services to international suppliers and strengthening the relationship advantages that international trade provides. The digitalization of the financial process and the availability of technology have simplified financial services, making them more accessible and efficient for businesses. In today's economy, the strengthening of demand for these services depends on the environment.

Scope of the Industry Profile

Key Players

• Asian Development Bank (Philippines)

• BNP Paribas Group (France)

• Bank of America Corporation (US)

• Citigroup, Inc. (US)

• Eulers Herms (Allianz Trade) (France)

• HSBC Group (UK)

• JPMorgan Chase & Co. (US)

• Mitsubishi UFJ Financial Group, Inc. (Japan)

• Royal Bank of Scotland plc (UK)

• Standard Chartered plc (UK)

Segmentation

By Type

• Pre-Shipment Finance

• Post-Shipment Finance

• Distributor Finance

By Service Type

• Letter of Credit Service

• Export-Import Bills & Invoice

• Performance Bonds

• Shipping Guarantees & Finances

• Other Offerings

By Transaction Type

• Cross-Border Transactions

• Domestic Trade Transactions

By Service Provider

• Banks

• Trade Finance House

• Private Financial Institutes

• Other Providers

By Industry

• Automotive

• Food & Beverages

• Leather & Textile

• Pharmaceutical

• Retail

• Chemical

• Agriculture

What to Expect from Industry Profile

1. Save time carrying out entry-level research by identifying the size, growth, major segments, and leading players in the Supply Chain Finance Service market in the world.

2. Use the PORTER’s Five Forces analysis to determine the competitive intensity and therefore market attractiveness of the Global Supply Chain Finance Service market.

3. Leading company profiles reveal details of key Supply Chain Finance Service market players’ global operations, strategies, financial performance & their recent developments.

4. Add weight to presentations and pitches by understanding the future growth prospects of the Global Supply Chain Finance Service market with forecast for decade by both market share (%) & revenue (USD Million).

Recent Development

• In March 2023, Eni announced a new project in collaboration with a group of banks to provide companies on the market with the opportunity to improve financial management through support to improve their ESG profiles.

Segment Insights

By Type

The demand for pre-shipment financing in service financing (SCF) is mainly driven by the need for adequate capital in the early stages of the production cycle. Even before the product reaches the market, companies often face significant costs associated with purchasing, production and shipping. Pre-shipment payments can enable companies to receive money to pay these expenses and ensure on-time delivery of products, production and transportation. This financial support is especially important for SMEs or suppliers in emerging markets where access to traditional financing methods is limited. By providing advance payment, advance payment can improve business efficiency and working capital, allowing them to fulfill orders, produce products on time, and control the product smoothly. This service is important, especially for businesses with seasonal or changing market needs, to ensure that companies can seize business opportunities and achieve timely customer satisfaction, ultimately contributing to efficiency and competitiveness in the global market.

By Industry

In the automotive industry, the financing need for supply chain finance (SCF) services is driven by the unique challenges and complexities of the business. Automobile manufacturing has a large network of third-party suppliers of products and raw materials. The need for seamless production planning and real-time inventory management is critical, and disruptions in the supply chain can have a significant impact, causing production delays and financial losses. SCF services provide a valuable resource for original equipment manufacturers (OEMs) and suppliers. Manufacturers often negotiate longer payment terms, and financial instruments help sellers bridge the gap between production costs and delayed payments. This financial stability is important to ensure that suppliers can produce on time, invest in technology and innovation, and maintain consistent product quality. In addition, intense competition in the automotive industry causes companies to optimize cash flow and invest in research and development. SCF services provide the financial flexibility necessary to enable companies and suppliers to adapt to business needs, maintain operational efficiency, and manage, power and operate their supply chains in the fast-paced automotive industry.

Regional Insights

Europe should take the lead and is expected to maintain its leading position in the 2020-2027 forecast period. Increasing use of Mountain Bicycles as a means of transportation in countries in the region will contribute to economic growth. For example, the Netherlands is estimated to have more Mountain Bicycles than citizens, and half of home-to-work trips in Amsterdam are made by Mountain Bicycle, according to a February 2020 report from the World Economic Forum. The expansion of tourism has also played a significant role, pushing places to create more activities, including cycling. For example, according to data published by the World Travel and Tourism Council in 2018, the contribution of European travel and tourism to the European economy is 9.7%. North America is expected to lead the Supply chain finance service market due to the growing Mountain Bicycle market. It affects the number of cycling championships and championships where people own bikes. For example, there are several well-known cycling competitions in the United States, including the Cross-America Challenge, the Iditaroy Invitational, and the USA Cycling Elite BMX National Championships. Additionally, more people participating in outdoor activities, including cycling, will increase consumption. For example, according to National Parks Travel.Org, nearly half of the U.S. population, or 50.5%, participated in outdoor activities in 2018, up 3.1% from the previous year.