Key Growth Trends for SMEs in Asia Pacific

Small and medium-sized enterprises (SMEs) are the driving force behind the booming Asia Pacific economy. A recent study by FedEx Express in partnership with Forbes Insights paints a promising picture. The survey, polling 250 business leaders across the Asia Pacific, reveals both exciting opportunities and challenges for SMEs in Asia Pacific.

Southeast Asia as a Hub for Growth

The study highlights how 68% of survey participants pointed to Southeast Asia (countries like Thailand, Vietnam, and Indonesia) as the region with the most significant growth potential. This optimism stems from strong economic performance, shared cultural ties within the region, and strengthened trade agreements within ASEAN.

Despite the positive outlook, navigating complex customs regulations remains a major obstacle for SMEs, even surpassing challenges like finding new customers or partners.  Limited internal expertise further complicates their ability to expand internationally.

Exciting Opportunities and Barriers

Improving customer experience is a top priority for SMEs. However, limited budgets can hinder implementing advanced solutions like data analytics and machine learning. Many respondents (66%) believe that automated technologies like AI are crucial for staying competitive globally. Overall, embracing digital transformation is seen as a key opportunity for international growth for SMEs in Asia Pacific.

While technology is crucial for enhancing customer experience, digital transformation itself presents challenges. Developing and implementing a digital strategy is the biggest hurdle for many SMEs, followed by cybersecurity concerns and system upgrade costs. Fortunately, partnerships with companies offering established digital tools can simplify this process for SMEs.

The report also identifies difficulties that SMEs need to overcome to fully capitalize on international opportunities. Interestingly, complex customs regulations and documentation emerged as the primary concern for half of the surveyed SMEs. It even ranks ahead of challenges like finding new customers (45%) and international partners or suppliers (42%). 

Bright Future for SMEs in Asia Pacific

While economic uncertainties and global competition pose challenges for small and medium-sized enterprises (SMEs) in Asia Pacific, there is a silver lining. The region’s Southeast Asian markets are experiencing rapid growth, making them a prime target for intra-Asian trade, says Kawal Preet, president of the Asia Pacific, Middle East & Africa region for FedEx Express.

By leveraging regional strengths, overcoming international hurdles, and embracing digital transformation, SMEs in Asia Pacific are well-positioned to become a dominant force in the global market. Governments across the region must actively implement policies to support their growth, fueling optimism for a bright future.

Editor: Nazalea Kusuma