FedEx latest studies reveal both SMEs and micro-multinationals in APAC are generating considerable financial benefits from selling beyond their own borders. Check the infographic to learn more about the trend of SMEs and micro-multinationals in APAC going global and top 5 best practices on how.

1. In APAC, SMEs account for 98% of all businesses, employ 50% of the workforce1
and
contribute 42% of regional GDP2
. Today, technology is enabling businesses of all sizes to
expand beyond their borders.
SMES ARE DRIVING THE REGION’S ECONOMY
LOOKING FORWARD
In APAC, both SMEs and micro-multinationals rank logistics service providers among their
top sources of advice on exporting and an important aid to operating internationally:
TURNING CHALLENGES INTO OPPORTUNITIES
GOING GLOBAL:SMES AND MICRO-MULTINATIONALS SPREAD
THEIR WINGS AND DRIVE ECONOMIC GROWTH
Recent FedEx research reveals an increasingly global mindset
among the small- to medium-size enterprise (SME) sector and
the emergence of a new class of businesses in Asia Pacific
(APAC) known as ‘micro-multinationals’.
Findings are based on two FedEx-commissioned studies, entitled Global Opportunities: Examining Import and Export Trends Among Small Businesses and Micro-multinationals and Cross-Border Growth. Completed in September 2015, Harris Interactive interviewed senior decision-makers in SMEs and micro-multinational companies across four regions: Asia Pacific;
Europe; Latin America & the Caribbean; and Middle East, Indian Sub-Continent & Africa. In Asia Pacific, the two research studies were conducted in China, Hong Kong, Japan, Singapore, South Korea and Taiwan.
Workforce Regional GDP
42%50%
Micro-multinationals are a sub-set of SMEs that operate in multiple markets. They enjoy
advantages that are unavailable to SMEs operating in a single market, such as the ability
to exploit global variations in knowledge, skills and labor costs3
.
THE RISE OF MICRO-MULTINATIONALS
In APAC, 58% of micro-multinationals export goods to overseas markets, compared to just
36% of SMEs as a whole. What’s more, 63% of micro-multinationals are reporting revenue
growth from their international operations, versus 50% of all SMEs.
Micro-multinationals are small, self-starting and service-driven companies
that are either ‘born global’ or else complement their domestic operations
by entering one or more overseas markets. Micro-multinationals rely on
online business platforms and the increased openness of the global
economy to operate across borders4
.
WHAT MAKES MICRO-MULTINATIONALS DISTINCT?
By leveraging technology, APAC SMEs are harnessing considerable business benefits from selling
beyond their own borders.
While APAC SMEs recognize the considerable potential of going global – through exporting to other markets or establishing
a presence there – they feel held back by certain barriers and a lack of support to overcome them.
APAC SMEs generate the highest annual average revenue from exports among all regions:
E-COMMERCE – THE NEXT FRONTIER FOR SMES AND
MICRO-MULTINATIONALS?
APAC SMES STILL HAVE CONCERNS ABOUT “GOING GLOBAL”
88% of APAC SMEs that export have encountered barriers. Their top concerns are:
Legal and trade rules are among the top challenges that APAC micro-multinationals face compared
to single-market SMEs.
58%
Micro-multinationals
SMEs
63%
36%
50%
EXPORT GROWTH
Finding the right sources of support is essential for SMEs exporters and micro-multinationals to go global.
23% of SMEs rate logistics
providers as their top source
of support for exporting.
50% of micro-multinationals regard
logistics providers as an important
aid to operating internationally.
With clear evidence of the benefits of going global, APAC SMEs and micro-multinationals are increasingly
looking to overseas markets to drive business growth.
52% of SMEs believe they will be
generating international revenue in five
years’ time – an increase of 16% on the
36% that are currently exporting.
59% of micro-multinationals believe
having a presence in multiple markets
makes it easier to sell goods across borders.
TOP 5 BEST PRACTICES TO HELP SMES AND MICRO-MULTINATIONALS GO GLOBAL:
APAC
Europe
MEISA
LAC
US$1.78 million
Global US$1.51 million
US$1.39 million
US$1.05 million
US$1.14 million
Your company website is your “window to the
world”. Having a multi-language website is
essential. Consider offering alternative
payment methods for online purchases too.
The way products are presented and even
the products themselves need to conform
to the cultural norms and expectations of
each market.
There’s no substitute for effective research
prior to market entry, and support from local
experts is invaluable, e.g. free advice via
government programs.
Ensuring market-specific requirements and
complexities are understood and handled in a
few markets paves the way to successfully
expand more widely later on.
Customize for an international audience Go ‘Glocal’ Fail to prepare? Prepare to fail! Test market validity of your product first
APAC SMEs that export are
twice as likely to experience
rapid growth5
as SMEs that do
not export.
22% of exporters are growing
rapidly compared to 11% of
non-exporters
77% agree with this statement 42% agree with this statement,
making online marketplaces the
biggest single enabler for
micro-multinationals in the region
A majority of APAC SMEs
recognize there is a whole
world of customers out there.
APAC micro-multinationals report
that access to online marketplaces
has made it possible to operate
across multiple markets.
Develop a strategic plan and follow it.
Consider the business scale, market reach
and logistics arrangements for each
market.
Go broad or narrow?
Potential costs
of exporting
Increased administration Different trade rulesLegal challengesDifferent culture
Risks of not
getting paid
Potential foreign
exchange losses
Lack of technical knowledge,
e.g. taxation requirements
in international market
1
“The Role of SMEs in Asia’s Economic Growth”, SME Finance Forum, April 25, 2014
2
“Asia SME Finance Monitor 2014”, Asian Development Bank, 2014. Note that this figure refers to the ADB’s 20 Asia SME Finance Monitor countries, covering Central Asia, East Asia, South Asia, Southeast Asia, and the Pacific.
3
Varian, H., Micromultinationals Will Run the World, Foreign Policy, 2011
4
Source: Mettler and Williams, The Rise of the Micro-Multinational, The Lisbon Council 2011.
5
This is defined as growth of 11% of more.
22%
11%
21%
34%
32%
29%
36% 35% 34% 33%