FedEx Research Shows Increased Importance of Exports for Japanese SMEs
E-commerce and Technology Increasingly Important for Small-and Medium-Size Japanese Businesses; Exports on the Rise as Destinations Diversify
TOKYO, July 10, 2018 – FedEx Express, the world’s largest express transportation company and a subsidiary of FedEx Corp. (NYSE: FDX), announced the results of a new study into trading trends among small- and medium-sized enterprises in nine markets in Asia Pacific, including Japan.
Results of the survey indicate that exports by Japanese SMEs have increased and export destinations have become more diverse since 2016. E-commerce is seen as the driver of future revenue growth, and new technologies are expected to enhance supply chain efficiency.
The 2018 survey reveals that on average Japanese SMEs generate US$698,000 of revenues through exports. The importance of exports has increased, as exports now represent 41% of total revenues, up from 35% in 2016. Export destinations are also diversifying: while Asia Pacific markets remain the most important, their share of exports has fallen sharply from 98% to 57%. Similarly, 64% of all imports were from outside Asia Pacific.
Currency exchange issues were the most commonly named challenge among Japanese SMEs for both imports and exports. And, as their trading partners are increasingly global, the potential impact of foreign exchange risks on their bottom line is also growing.
Among the surveyed Japanese companies, 27% cited finding new customers in other markets as a concern for exports, making it the third most common response. E-commerce is seen as one way of addressing such issues: the use of digital technologies is expected to grow rapidly, as 45% of Japanese SMEs that are currently using digital commerce to find new customers expect to see their e-commerce revenue increase in the next 12 months. Despite this, use of digital technologies is low: only 40% of Japanese SMEs engage in e-commerce, 28% in social commerce, and 23% in mobile commerce platforms. With Asia Pacific averages being twice as high, Japanese SMEs are behind their competitors from other Asian markets.
In terms of challenges, logistics and delivery issues were among the most common both in terms of exporting (fourth: 24%) and importing (second: 25%). At the same time, over half (54%) of Japanese SMEs believe that new technologies can make supply chains and distribution channels more efficient. As was the case with the Asia Pacific region as a whole, the three technologies most often utilized by Japanese SMEs were automation software, mobile payments, and big data/advanced analytics. However, while the average rate of use for the new technologies included in the survey was 57% for Asia Pacific markets, the rate was only 22% for Japanese SMEs.
In conclusion, the importance of importing and exporting to generate revenues is increasing, and the expansion of import and export destinations is creating new challenges for SMEs in terms of exchange risks, finding new customers, logistics solutions, and delivery options. Utilizing e-commerce and new technologies are vital to addressing those new challenges and achieving further growth through importing and exporting.
This recent survey, which follows a similar study conducted in 2016, comprises interviews of approximately 500 SMEs in each of the nine markets.
Method: Online and telephone interviews
Period: March 26 – April 9, 2018
Target: 4,543 senior executives (507 in Japan) representing SMEs across nine markets (China, Hong Kong, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Vietnam) with 249 employees or less
Conducted by: Harris Interactive