Technology has been key to unlocking global markets for small and medium-sized enterprises (SMEs) in Asia Pacific. From finding new customers or suppliers in other markets to marketing a product overseas and facilitating payments across borders, technology has made international trade smoother and easier.
Despite the strides made, obstacles remain. Whether it’s importing raw materials or exporting finished products, the challenges are similar.
According to the recent FedEx Express Asia Pacific SME research report, SMEs’ top three concerns are customs, currency, and logistics. Almost half (49%) of APAC SMEs worry over customs procedures, while 45% cite currency exchange issues and 43% are concerned about logistics and delivery issues.
Customs clearance has been a perennial headache because regulations can vary significantly across markets. Customs administrations’ use of technology also varies widely, and manual systems and organisational challenges mean that the risk of mistakes remains high. Delays of shipments at customs is a very real concern for SMEs who do not necessarily have the expertise to handle them. Moreover, the FedEx Express research reveals that Asian SMEs are importing and exporting more than ever, so the risks and costs relating to customs are not surprisingly multiplied.
Another issue SMEs have no control over is currency exchange. Small businesses are especially vulnerable to global currency fluctuations caused by a host of geopolitical and macroeconomic factors. Currency weakness could lead to more overseas sales but could also mean more expensive raw materials or components imports. Despite growing productivity and efficiency, the inevitable time lag between the purchase of inputs and delivery of finished products creates additional currency risk. While there are ways to mitigate the effect of currency fluctuation on the bottom line, SMEs remain less able to deal with unstable market conditions than larger organisations, which can more effectively plan and thereby minimise their foreign exchange exposure.
Logistics and delivery, on the other hand, is an area that SMEs can manage so it becomes a clear and powerful competitive advantage. Once customers order a product, they are expecting to receive it in the shortest time possible. If the SME is unable to either ship the goods to the international customer or to get the product there on time, this will erode customer trust and impact the business negatively. That is why a reliable logistics service provider is critical to helping SMEs manage the whole supply chain process from inventory management, manage customs clearance paperwork and procedures across multiple locations and geographies, all the way to delivery to local, regional and global customers.
For example, to help businesses cope with the customs paperwork required by different countries, meanwhile, FedEx® Global Trade Manager, a free online shipping assistant, enables SMEs to find the proper documents required for international shipping and estimate duties and taxes. These documents can be saved online to be reused later, saving a lot of time.
International trade spells opportunity for Asia’s SMEs, but the challenges are significant. Having the right product is not enough if it can’t be delivered at the right place – wherever in the world that might be – at the right time. While some factors like currencies can’t be controlled, SMEs should do all they can to address customs and logistics hurdles in partnership with a trusted logistics partner like FedEx Express, who can create possibilities for businesses.
 “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, a commissioned research study conducted by Harris Interactive on behalf of FedEx Express, July 2018.