FedEx Research Shows More than Half of SMEs in Vietnam Forecast Export Growth in the Next 12 Months
E-Commerce and Digital Economy Seen to Continue Driving Export Growth for small and medium-sized enterprises in Vietnam
HO CHI MINH CITY — Recent research from FedEx Express, a subsidiary of FedEx Corp. (NYSE: FDX) and the world’s largest express transportation company, reveals small- and medium- sized enterprises (SMEs) in Vietnam are highly optimistic about export and import prospects.
Entitled “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, the research shows that 87% saw stable or increased exports over the past year, generating an average of VND 23,648 billion in revenue, which accounts for almost half (48%) of their overall revenues. Eight out of ten (80%) SMEs in Vietnam are exporting to markets outside of the Asia-Pacific region, higher than the APAC average of 71%. Some 57% are optimistic and believe they will see further increase in exports to markets beyond Asia-Pacific in the year ahead. At the same time, SMEs in Vietnam are even more bullish on exports within the Asia-Pacific region, with almost two-thirds (62%) anticipating increased revenue growth in the coming months.
Half (50%) of Vietnamese SMEs are importing from other markets, almost to the same extent that they source within their own markets. Greater product variety and superior product quality are two of the most cited benefits of importing goods. Although raw materials and components top the list of imports, closely followed by professional services and designs, which suggests an increasingly prevalent borderless online marketplace today.
“At FedEx, we see enormous potential for SMEs to grow their business in the international marketplace,” said Hardy Diec, managing director, FedEx Express, Indochina. “As shown in the research, the strong optimism from small and medium-sized businesses in Vietnam demonstrates that they are looking to drive further growth of exports and imports within the local and global economies. To support SMEs, FedEx will continue to enhance our services to deliver fast and reliable connectivity for SMEs to markets within Asia and worldwide. We are committed to help SMEs thrive internationally by facilitating exports and imports, including offering customs support and integrated solutions.”
According to the study, the thriving digital economy is one of the key factors driving business growth among SMEs in the region. In fact, SMEs in Vietnam are more enthusiastic and optimistic about how the digital economy will benefit their business (73%), than about the overall economic outlook (57%). Nine out of ten SMEs in Vietnam are using e-commerce, mobile and social commerce and 76% expect these channels will continue to drive growth in the coming years.
New technologies is another key business driver. SMEs in APAC are harnessing new Industry 4.0 technologies to expand their business with a number of them widely adopted by businesses. There is optimism among APAC SMEs about increased adoption of these technologies, including mobile payments, big data or advanced analytics, software automation, in the next 12 months. Forty-three percent of SMEs in Vietnam indicated that their main motivation to adopt these new technologies is to drive efficiencies in supply chain and distribution channels, thereby driving business growth.
As more SMEs are looking to import and export further afield, common challenges in the form of customs clearance, foreign currency exchange, and logistics issues continue to be the obstacles to SMEs in Vietnam building their business internationally. Across the region, the consensus among SMEs is that logistics providers can do more to support SMEs as many feel that exporting is becoming increasingly difficult. Specifically, SMEs in Vietnam have reported that they are looking for different shipping options including slower, deferred shipments traveling over ocean (83%) or by road (17%) in addition to express shipments travelling by air (71%).
About the Research Study
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 held online and 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, Thailand 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.