Friday, May 24, 2024
Southeast Asia emerges as top growth market for APAC Region

Southeast Asia emerges as top growth market for APAC Region

FedEx Express (FedEx) has released the findings from its latest research report, conducted in partnership with Forbes Insights and aimed at identifying key international growth trends for small and medium-sized enterprises (SMEs) in the Asia Pacific region over the next three years.

The survey identified growth opportunities for small businesses as well as challenges to international cross-border commerce.

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Polling 250 small and mid-sized business leaders, including founders and C-suite executives, across a range of industry sectors in the Asia Pacific region, the key finding was that 68% have seen the greatest potential for growth in Southeast Asian countries such as Thailand, Vietnam, and Indonesia.

Economic growth, cultural affinities, and improved regional trade deals are fuelling optimism around ASEAN markets, according to the report. While 88% of those surveyed said that they were planning customer base expansions globally over the next three years, APAC business leaders find it harder to do business with partners, suppliers, and customers in markets like Europe and North and South America.

Challenges remain for truly realizing cross-border opportunities even within the APAC region. When asked about barriers to international expansion, half of the respondents cited complex customs requirements and documentation as their primary hurdles ahead of finding new customers (45%) and finding partners or suppliers in global markets (42%). With limited in-house trade compliance expertise, navigating different customs regulations across markets remains complicated, according to those surveyed.

“Our data shows that economic headwinds and global competition are seen as the most pressing business challenges for Asia’s SMEs today. Southeast Asian markets are currently growing faster than in many other parts of the world, so it makes sense for them to focus on intra-Asia trade,” said Kawal Preet, president of Asia Pacific, Middle East & Africa region, FedEx Express. “Yet there remains work to do in surmounting barriers to entry into dinternational 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.”

According to Ross Gagnon, Executive Director of Research, Forbes Insights, “the findings provide valuable insights into high-growth areas and the continuing barriers facing export-driven SMEs. Collaborations focused on unlocking border compliance and bridging digital divides will be key to realizing their international ambitions.”

Enhancing the customer experience was the most highly ranked business priority for SMEs (57%). While small businesses typically invest only 5% of the total revenue of their annual IT budget on digital transaction capabilities, digital technology was seen as instrumental in tackling customer experience challenges by applying analytics, machine learning, AI, real-time tracking and visibility solutions and technology training to upskill employees. Although the potential of technology is clear, 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%).

Where specialized skills and costs are prohibitive, digital transformation can be simplified by choosing partners that have their digital tools and platforms they can use or incorporate into their own.

Picture of Anastasiya Simsek

Anastasiya Simsek

Anastasiya Simsek started her journalism career in 2016 at Ukrainian TV-Channels: 24 Channel and 1+1 Media. Having worked across a number of different sectors, including news, medicine and lifestyle, she joined the Air Cargo Week editorial team in 2024. To share your news and exclusive insights, contact Anastasiya.Simsek@AirCargoWeek.com

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