How To Navigate Start-up Success In Asia
Asia’s booming start-up scene is more dynamic than ever. With growth fueled by cross-border commerce, start-ups expanding into international markets are responding more competitively to shifting market demands.
Leading the race in access to capital
Newly founded companies in the region are taking an increasing share of global venture capital funding. For example, in the 10 countries that make up the Association of Southeast Asian Nations (ASEAN), foreign direct investment is growing faster, and in the Asia Pacific region, private equity assets under management have grown at more than double the rate of Europe and North America over the past decade.
According to a recent McKinsey & Company report, Asian consumers will account for half of global consumption growth in dollar terms over the next ten years. By 2025, half of all consumer transactions will happen in Asia. This rise in purchasing power has surpassed even the most optimistic projections from a decade ago.
In addition to a growing pool of potential customers, there are other economic and demographic factors putting start-ups in Asia in a good position for success. More than half of ASEAN’s population is under 30 and are true digital natives—and a younger, tech-savvy population means more high-quality talent for companies to choose from.
Governments keen to nurture start-ups
Seeking to drive economic growth in their respective countries, governments across the region have demonstrated support for start-ups through grants, technical support, beneficial tax regimes and other policies. Japan, for example, has an initiative called J-Start-up to support and incubate start-ups by providing business space, support grants, accelerator programs and subsidies, and many other countries in the region including India and Hong Kong have similar programs.
Strong logistics ecosystem becomes an enabler for success
During the COVID pandemic, e-commerce has cemented itself as the dominant sales model across the globe. Today’s start-ups are establishing themselves on digital business principles to lower the costs of doing business, improve efficiency and more easily reach vendors and customers overseas. But going international is not without its challenges. Logistics, including not just shipping itself but customs, duties, and international payments, can take up a disproportionate amount of time and other resources that start-ups could be spending on other aspects of their growing businesses.
At FedEx, we’ve been working in the region for decades to build networks and develop easy-to-use solutions to overcome these challenges for companies large and small. The digital economy has also accelerated the growth of a new wave of logistics products specifically tailored to this segment.
This means start-ups are increasingly able to break free of borders and reap the benefits of buying and selling into international markets. This includes diversification of supply chains to make sourcing, production and inventory management more resilient; and being able to respond quickly to changing demand, regulatory environments and even product lifecycles. On this front, FedEx provides invaluable support to Asia’s start-ups looking to turn international opportunity into revenue reality.
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A version of this article first appeared in Forbes Brandvoice on December 22, 2022.
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