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Global Is The New Local: FedEx Research Shows APAC SMEs’ Shift in the Flows of International Trade

254% Increase in SME Exports Beyond the Region over Four Years; Logistics Continues Ever More in Demand

July 8, 2018

HONG KONG, July 9, 2018 — Recent research from FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX) and the world’s largest express transportation company, reveals the rapidly accelerating global reach of small- and medium-sized enterprises (SMEs) in Asia Pacific (APAC) driven by the thriving digital economy. Overall, the number of SMEs exporting to other regions is up 254% over four years with 71% now exporting beyond APAC. The research also shows that the patterns of imports and exports into and out of the region have changed with a significant increase in imports[1] and exports[2] within the Asia Pacific region over the past three years.

Entitled “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, the research suggests a shift in international trade patterns. Trade within the region no longer dominates as it has in the past[3] as the level of exports to other regions (71%) is reaching a similar level to that of exports within the Asia Pacific region (70%). In addition, among the APAC SMEs who source materials from other markets, 62% are sourcing from other regions, which is a significant increase from 26% in 2015.

The contents of imports and exports by APAC SMEs are evolving as well, with professional services and designs now making up a considerable proportion, which suggests an increasingly prevalent borderless online marketplace today.

“The global footprint of APAC SMEs is bigger than ever,” said Karen Reddington, president, FedEx Express Asia Pacific. “This growth momentum is expected to stay as majority[4] of APAC SMEs believe that they will continue to or increase their exports and imports beyond the region in the next 12 months. We are pleased to see that more SMEs are growing their business beyond Asia Pacific with an increasing need for more sophisticated logistics solutions.”

According to the study, the thriving digital economy is one of the key factors driving business growth among SMEs in APAC. In fact, businesses in this region are more enthusiastic and optimistic about how the digital economy will benefit their business (61%), than about the overall economic outlook (41%). In addition, mobile and social commerce are now more widely used in driving growth compared to a few years ago.

New technologies is another key business driver. SMEs in APAC are harnessing new Industry 4.0 technologies to expand their business with a number of them widely adopted by businesses. There is optimism among APAC SMEs about increased adoption of these technologies—including mobile payments, big data or advanced analytics, and software automation—in the next 12 months. Sixty-six per cent of APAC 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.

As more SMEs are looking to import and export further afield, common challenges in the form of customs clearance, foreign currency exchange, and logistics issues continue to be the obstacles to SMEs building their business internationally. Across the region, the consensus among 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 (70%) in addition to express shipments travelling by air (62%).

“As a company committed to helping SMEs go global, there are significant opportunities for us to help meet the demands and needs, as well as address the challenges SMEs face in this region.” added Reddington.

[1] 26% of SMEs source materials from other markets outside the region in 2015.

[2] 35% of SMEs in APAC are exporting to other regions in 2015.

[3] 35% of SMEs are involved in intra-regional export in 2018 vs 28% in inter-regional in 2015

[4] 79% of the SMEs in APAC believe that inter-regional exports will increase or stay the same

About the Research Study

The independent study, entitled “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, was conducted by Harris Interactive on behalf of FedEx Express to offer insights into import and export opportunities and challenges facing SMEs. The results are based on interviews with 4,543 senior executives of SMEs held online and by telephone in nine markets in Asia Pacific between March and April 2018. The markets included in the research were: Mainland China, Hong Kong, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. Interviews were split equally by market 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.

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