A. M. According to the latest report on MSME business dynamics for the second quarter of 2025 in El Salvador, the competitive landscape has radically transformed. Since june 2020, the number of entrepreneurs who perceive increased competition as their main challenge has almost tripled. This trend not only demonstrates an increasingly saturated market but also underscores the need for Micro and Small Enterprises (MSEs) to adapt their strategies to survive in a constantly changing environment.
The retail sector, which constitutes 50% of MSEs, is the most affected by this new reality. 27% of respondents indicated that the emergence of new businesses with identical offerings is the dominant factor behind the perception of increased competition. This phenomenon is exacerbated by the proliferation of Asian-origin warehouses and stores, which serve not only end consumers but also small merchants, creating a cycle of incessant competitive pressure.
In addition to the emergence of new businesses, another significant factor is the presence of competitors with massive inventories. This factor, reported by 12% of entrepreneurs, has created a considerable competitive disadvantage. The arrival of mega-wholesale stores offering products at prices almost impossible for MSMEs to match has forced many to reevaluate their business models. Paradoxically, this situation benefits consumers, who now have access to a wider variety of products at more affordable prices.
Third, 10% of MSME entrepreneurs highlight unequal access to prices and promotions from suppliers. This gap favors larger businesses, allowing them to offer prices that MSMEs cannot match. This situation is exacerbated by direct access to imported products at lower prices, putting additional pressure on small merchants. However, for a portion of the wage-earning population, this accessibility to lower prices represents a relief for their family budgets.
The FUSAI MSME Observatory study highlights that the competitive dynamics in El Salvador are being reconfigured. The data reveal a challenging landscape for MSMEs, which are forced to compete not only with large corporations but also with a proliferation of similar businesses. To mitigate these effects, a strategic approach is needed that fosters innovation and differentiation, allowing MSMEs not only to survive but also thrive in this new environment.
