Asia-Pacific SMEs that export twice as likely to achieve double-digit growth

Asia-Pacific SMEs exporting to overseas markets are growing faster than those that do not export, which shows the benefit of offshore trade to the region.

Small-to-medium enterprises (SMEs) in Asia-Pacific (APAC) that export to overseas markets are twice as likely to grow at least 11% per year than SMEs that do not export, according to a new global research study commissioned by FedEx Express.

The survey reveals that 22% of exporting Asia-Pacific SMEs were growing rapidly, compared to just 11% of those that sell only in their domestic market, and illustrates the considerable revenue opportunities on offer to SMEs that do export.

APAC SMEs reported that exports generate an average of US$1.8 million in revenue each year, the highest of the four global regions* in the study. In certain APAC markets, this figure was far higher – in Taiwan the average is US$2.8 million in revenue per year from exports, the highest level in the study, with Hong Kong in second place with an average of almost US$2.6 million.

‘Small businesses are a critically important part of the APAC economy, and this study shows how they are able to thrive when they grasp the opportunity to sell to markets beyond their own borders,’ says Karen Reddington, president, FedEx Express Asia Pacific.

‘However, while many APAC SMEs see the potential of exporting, they are not confident in their ability to translate that potential into business success as they feel they lack the necessary advice and support. This should serve as a wake-up call to all stakeholders – helping SMEs to succeed in overseas markets can only be good for the entire region,’ Reddington adds.

The lack of confidence means many SMEs are still hesitant about targeting overseas markets. Currently, only 36% of APAC SMEs are exporting, despite a much higher proportion – 77% – recognising the significant opportunities it offers. Only 10% believe that they already have sufficient support to succeed in international markets, the lowest level among the four regions in the study.

Logistics plays a vital role in tackling this confidence gap. SMEs in Taiwan and Singapore ranked logistics providers as their top source of expertise on exporting, and in other APAC markets logistics providers were rated highly as sources.

Despite the perceived barriers, SMEs are optimistic about the prospect of exporting in the future. 52% of Asia-Pacific SMEs anticipate they will be doing so by 2020, an increase of 16% on the current level. They are even more positive when it comes to international business growth, with 61% anticipating greater revenue from overseas business in five years’ time, compared to just 45% predicting this for their domestic business.

The independent study, entitled Global opportunities: Examining import and export trends among small businesses was conducted by market research consultancy Harris Interactive on behalf of FedEx Express.

* The four regions the study covered were: APAC; Europe; Latin America and the Caribbean; and the Middle East, India and South Africa.