FedEx Research Finds Significant Export Growth to Asia Pacific Markets by Korean SMEs
- Among APAC markets, Vietnam has become the third largest export market for SMEs in South Korea
- SMEs find currency exchange and logistics issues are most critical for their business success
- The digital economy and new technology adoption continue to drive business growth for SMEs
SEOUL, South Korea, July 9, 2018 — FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX) and the world’s largest express transportation company, announced today the results of the research study, “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, which offers valuable insights into the import and export behaviors of SMEs in APAC markets.
The results show that 67% of South Korea’s SMEs were exporting to markets in Asia Pacific in the past year, which is a significant growth from 22% in 2016. Among Asia Pacific markets, Vietnam has become the third largest export market for SMEs in South Korea, reaching 22%, a big jump from 9% three years ago. The top two markets for Korean exports within Asia Pacific are China and Japan. Export revenues for Korean SMEs have become more important over the past three years, accounting for 59% of total revenue compared with 44% in 2016.
Prospects for the import market into South Korea were also positive as respondents believe the value of imports will increase in the next 12 months. Forty-seven percent said low prices are the biggest benefit of imports, followed by greater product variety (36%) and high-quality products (36%).
As more SMEs are looking to import and export further afield, common challenges in the form of foreign currency exchange (49%) and logistics issues (47%) continue to be the obstacles to SMEs building their business internationally. The general consensus among Korean SMEs is that logistics providers can do more to support SMEs as many feel that exporting and importing is becoming increasingly difficult. Specifically, SMEs have reported that they are looking for different shipping options including slower, deferred shipments traveling over ocean (69%) in addition to express shipments travelling by air (53%).
“FedEx recognizes the challenges local SMEs face and their need for a reliable logistics partner,” said Eun-Mi Chae, managing director of FedEx Express Korea. “Whether selecting sea, air or ground transportation, FedEx offers a range of tailored services to SMEs to facilitate the shipments into and out of South Korea. We continue to support SMEs with discount programs through partnerships with local organizations as well as trade mentoring programs.”
A thriving digital economy is one of the key factors driving business growth among Korean SMEs. In fact, businesses in this region are more enthusiastic and optimistic about how the digital economy will benefit their business (49%), than about the overall economic outlook (31%). In addition, mobile and social commerce are now more widely used in driving growth compared to a few years ago.
New technologies are another key business driver. SMEs in South Korea are harnessing new Industry 4.0 technologies to expand their business with a number of them widely adopted by businesses. There is optimism among Korean SMEs about increased adoption of these technologies, including mobile payments (53%) big data or advanced analytics (51%), Augmented Reality/Virtual Reality (49%), in the next 12 months. Fifty-nine percent of Korean SMEs indicated that their main motivation to adopt these new technologies is to drive efficiencies in supply chain and distribution channels, thereby driving business growth.