Recent research commissioned by FedEx Express, a subsidiary of FedEx Corp, reveals that Hong Kong small and medium enterprises are exporting as much within Asia Pacific as they are to other regions. More than 70% of these SMEs are now engaging in exports, a significant increase over the past three years.
The study also shows that emerging industry 4.0 technologies and the thriving digital economy, including e-commerce, mobile-commerce and social commerce, are key factors driving the growth of SMEs as well as helping SMEs overcome challenges in this highly competitive environment.
“Local SMEs are facing a rapidly-changing business environment,” said Anthony Leung, managing director, FedEx Express, Hong Kong and Macau. “We are pleased to see that local SMEs are increasingly expanding their global footprint and are generating more revenues from exports. FedEx Express is committed to supporting businesses going global.”
According to the research, exports now account for 88% of the total average revenues of Hong Kong SMEs, which is equivalent to HK$11.278m and higher than the Asia Pacific average of HK$9.415m. The total average export revenues of Hong Kong SMEs have increased by 24% (HK$9.056m) over the last two years. China (52%), Taiwan (37%) and Japan (30%) are the top export markets among Hong Kong SMEs in the Asia-Pacific region, whereas Europe and Central/South Asia are the top export markets outside the Asia-Pacific region.
Hong Kong SMEs are facing various operational challenges in expanding their business globally. More than 50% of Hong Kong SMEs agree customs procedures and currency exchange issues are their biggest challenges.
Most Hong Kong SMEs are already using e-commerce (87%) and mobile-commerce (79%) to source goods and find new customers outside of Hong Kong. The research shows that more SMEs are leveraging the power of social media in expanding their businesses. An overwhelming 8 out of 10 SMEs are now using social media, with more than half (52%) using this channel to export their products or services to overseas customers. Up to 26% of total revenues of SMEs are generated from social commerce, with 57% of them expecting to grow their businesses from social commerce over the next 12 months.
In addition, SMEs are harnessing new technologies to grow their businesses, with 62% of them agreeing that new technologies will help improve their supply chain and distribution channel efficiencies. Among current users, automation software (80%), mobile payments (72%) and big data analytics (71%) are the top technologies SMEs are deploying. They also expect to increase the usage of mobile payments (62%), big data analytics (59%) and 3D printing (52%) in the future.
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 conducted online or 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 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.