FedEx Study Indicates SMEs in Latin America Continue to Show Growth and Optimism
Miami, February 15, 2017 — FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX) and the world’s largest express transportation company, today announces the results of a new, global research study, which offers valuable insights into the import and export behavior of SMEs at a global and regional scale.
In Latin America and the Caribbean, 58% of small and medium-sized enterprises (SMEs) believe intra-regional export revenues will increase in the next 12 months; some 34% have seen steady growth and only 18% have reported a significant decline in intra and inter-regional exports, according to the recent research study titled “Global Trade in the Digital Economy: Opportunities for Small Businesses”.
“SMEs are a crucial segment of the Latin American economy and present a great opportunity for domestic growth,” said Juan N. Cento, president for FedEx Express LAC. “At FedEx, we equip SMEs with the tools to create new business opportunities, enable them to expand their businesses beyond the region, and grow the local economy in a responsible, resourceful, and forward-thinking manner.”
The study shows that the digital economy lies at the heart of SME optimism. In Latin America and the Caribbean, eight in ten SMEs are already generating e-commerce sales, contributing average revenues of $677,560 USD a year. 83% of all Latin American and the Caribbean SMEs generate revenue via e-commerce, which accounts for more than a quarter, 26%, of total revenue on average. Of the SMEs surveyed in the region, 39% reported an increase in e-commerce revenue and 54% believe they will generate greater e-commerce income in the coming year. The majority of SMEs reporting an increase in e-commerce profit also require a range of improved logistics services, including faster delivery (52%), flexible delivery options (48%), and the ability to handle extra work when orders spike (36%).
In contrast to the booming global e-commerce market, the penetration of mobile commerce (m-commerce) and social commerce (social media transactions) among SMEs is still relatively low. In Latin America and the Caribbean, 69% and 79% of SMEs are generating revenue through m-commerce and social media transactions respectively, versus a higher global penetration of e-commerce at 83%. Furthermore, 22% of total revenue stems from m-commerce, while social media transactions account for 24% of total revenue. Unlocking the full potential of these two fast-growing trends hinges on small businesses better integrating into the digital economy across the globe and 53% and 59% of SMEs already anticipate growth in m-commerce and social media transactions respectively during the next year.
The digital economy presents a world of opportunities, but also increased competition. In fact, 36% of SMEs in the region cited increasing international competition as a top challenge; a percent higher than that of the global outlook. The study reveals that in order to navigate this new world, SMEs must look to the adoption of new technologies and an efficient supply chain. The most frequently-adopted innovations that will likely reach a wider SME audience in the next few years include connected office/factory (30%), Internet of Things (20%) and office wearables (16%).
As a result, 68% of SMEs in Latin America and the Caribbean believe that new innovations in technology will help them export more in the next few years. Investment in new technology is seen as the number one solution to business challenges among SMEs (45%). On the other hand, 58% of SMEs agree logistics play an important part in their export business, with 41% of SMEs believing that they have become more reliant on logistics providers in recent years. This increased reliance on logistics providers is attributed to customer demands for faster (40%) and cheaper (33%) deliveries. However, a significant 66% of SMEs indicate that they are willing to pay a premium fee for faster delivery service.
“The study confirms the experience we have with our customers. In this increasingly competitive world, an efficient supply chain is what makes it possible to simultaneously enhance customer experience and better manage the bottom line, thus helping SMEs win business,” said Raj Subramaniam executive vice president, Global Marketing and Communications, FedEx Services.
The study also showed that SMEs in the region experienced an increase in average value of intra-regional exports to close to $1 million USD. Argentina and Chile represent the top export markets, with 37% and 28% of SMEs trading with these countries, respectively. The effects of deepening intra-regional exporting ties are becoming more evident, with 74% of SMEs at a global level currently exporting within their own regions, representing an average of $787,000 USD in revenue. This has particular resonance in Latin America and the Caribbean, where intra-regional exports represent 65% of total export revenue for the segment within the region.
* “Global Trade in the Digital Economy: Opportunities for Small Businesses”, a commissioned research study conducted by Harris Interactive on behalf of FedEx, September 2016.
About the research study
Harris Interactive carried out 9,000 interviews with senior executives in SMEs online and by telephone in 17 markets spanning four global regions between August and September 2016. Interviews were split equally by country with a representative mix of company sizes: micro (1-9 full-time employees), small (10-49 full-time employees) and medium (50-249 full-time employees). The sample size was approximately 500 respondents per market, with the exception of the UK, where the sample size was 1,000 respondents.
About FedEx Express
FedEx Express is the world’s largest express transportation company, providing fast and reliable delivery to more than 220 countries and territories. FedEx Express uses a global air-and-ground network to speed delivery of time-sensitive shipments, by a definite time and date supported by a money-back guarantee.
About FedEx Express Latin America and Caribbean Division
FedEx Express Latin America and Caribbean serves more than 50 countries and territories and employs more than 19,000 people committed to total customer satisfaction. FedEx Express LAC offers a broad portfolio of transportation and logistics solutions, acting as a pillar of growth for the region, and continues its commitment to small, medium and large exporters by offering innovative ways to access the global marketplace.
About FedEx Corp.
FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $58 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 400,000 team members to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. To learn more about how FedEx connects people and possibilities around the world, please visit about.fedex.com.
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