FedEx, Forbes survey shows rising growth potential in SEA region industries

In a rapidly evolving global landscape, small and medium-sized enterprises (SMEs) in the Asia Pacific region are facing both challenges and exciting growth opportunities.

A recent survey conducted by FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX), in partnership with Forbes Insights, has shed light on the key trends and barriers that these businesses are navigating.

The survey, which polled 250 small and mid-sized business leaders across a range of industry sectors in the Asia Pacific region, revealed that 68% of respondents see the greatest potential for growth in Southeast Asian countries such as Thailand, Vietnam, and Indonesia. This optimism is fueled by factors such as economic growth, cultural affinities, and improving regional trade deals.

However, the survey also highlighted the complexities that SMEs face when expanding their operations beyond their home markets. While 88% of those surveyed said they were planning customer base expansions globally over the next three years, they found it harder to do business with partners, suppliers, and customers in markets like Europe and North and South America.

One of the primary hurdles identified by the survey respondents was the complexity of customs requirements and documentation, cited by 50% of the respondents as their primary challenge. This was followed by finding new customers (45%) and finding partners or suppliers in global markets (42%).

Kawal Preet, president of the Asia Pacific, Middle East & Africa region at FedEx Express, emphasized the importance of expert partners in navigating these barriers. “Understanding how to navigate complex customs regulations is where expert partners like FedEx can add value, allowing SMEs to concentrate on their core strengths,” Preet said.

According to the survey, limited in-house trade compliance expertise is a significant factor in the difficulties faced by SMEs when expanding into international markets. This underscores the need for businesses to seek out specialized support and resources to streamline their cross-border operations.

The survey also highlighted the critical role of digital transformation in enhancing the customer experience, which was the most highly ranked business priority for SMEs (57%). While small businesses typically invest only 5% of their total revenue on annual IT budgets for digital transaction capabilities, they recognize the instrumental value of digital technologies in tackling customer experience challenges.

However, the survey revealed that nearly three-quarters (71%) of respondents stated that developing or implementing a digital strategy was their biggest challenge, followed by mitigating security threats (65%) and the cost of upgrading existing systems (64%).

To address these challenges, the report suggests that SMEs can simplify their digital transformation by partnering with providers that offer their own digital tools and platforms. This can help businesses overcome the specialized skills and costs that may be prohibitive for them to develop in-house.

The survey findings indicate that Southeast Asian markets are currently growing faster than many other parts of the world, making them a prime focus for Asia’s SMEs. According to the report, economic growth, cultural affinities, and improving regional trade deals are fueling optimism around the ASEAN (Association of Southeast Asian Nations) markets.

This sentiment is echoed by Maribeth Espinosa, Managing Director at FedEx Express Philippines, who said, “The latest FedEx survey presents valuable insights and opportunities for businesses in the Philippines to better serve their customers and tap into new markets. As SMEs and e-merchants continue to build and optimize their capabilities, FedEx remains a trusted logistics provider, delivering innovative solutions and expertise to enable cross-border growth and success.”

The FedEx and Forbes Insights survey provides a comprehensive understanding of the challenges and opportunities facing Asia’s SMEs in the global marketplace. By addressing the complexities of cross-border commerce, leveraging digital transformation, and tapping into the growth potential of Southeast Asian markets, these businesses can unlock new avenues for sustainable growth and success.

As Kawal Preet noted, “Yet there remains work to do in surmounting barriers to entry into international markets despite the rising number of regional and bilateral trade agreements. Understanding how to navigate complex customs regulations is where expert partners like FedEx can add value allowing SMEs to concentrate on their core strengths.”

The full FedEx research report is available at fedex.com and offers more data-driven insights to guide Asian SME strategies for success in the global arena.