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Apr 19, 2024 / 16:27

Vietnam among Asia-Pacific's fastest growing economies: FedEx

The Southeast Asian market is growing faster than many other regions worldwide.

A survey conducted by FedEx Express found that 68% of respondents consider Vietnam one of the economies with the highest growth potential in the Asia-Pacific region, alongside Thailand and Indonesia.

 Production of Home appliances at SunHouse Group. Photo:Thanh Hai/The Hanoi Times

FedEx Express (FedEx), a subsidiary of FedEx Corp. (NYSE: FDX), one of the world's largest express delivery companies, has released the findings of its latest research report in partnership with Forbes Insights.

The report aims to identify key international trends in the growth of small and medium-sized enterprises (SMEs) in Asia Pacific over the next three years. The survey of 250 leaders of SMEs from a range of industries in the region, also explores growth opportunities for small businesses as well as challenges of international cross-border trade.

According to the survey, economic growth, cultural awareness, and improved regional trade agreements indicate positive signs in the ASEAN market. While 88% of respondents have plans to expand their global customer base over the next three years, Asia Pacific business leaders acknowledge the significant efforts required to collaborate with partners, suppliers, and customers in European, North American, and South American markets.

There are still many challenges to seizing opportunities across borders, even within the Asia-Pacific region. When asked about barriers to international business expansion, half of the respondents cited differing and specific customs requirements in each country as a significant hurdle for companies seeking new customers (45%) or global partners and suppliers (42%). Respondents noted that a lack of in-house trade expertise makes navigating customs rules in different countries a persistent issue.

"The data shows that economic obstacles and global competition are among the biggest business challenges for SMEs in the Asia-Pacific region. Currently, the Southeast Asian market is growing faster than many other regions worldwide, so it makes sense to focus on intra-Asia trade," said Kawal Preet, President of FedEx Express for Asia-Pacific, the Middle East, and Africa.

"However, there is still much work to be done to remove barriers to accessing international markets, even as the number of regional and bilateral trade agreements continues to grow. Understanding and knowing how to navigate customs regulations in each country is a value that professional partners like FedEx can offer to businesses, allowing SMEs to focus on their core strengths," added Kawal Preet.

Ross Gagnon, Managing Director of Forbes Insights, said: "The report’s findings provide valuable insights into high-growth areas and the challenges facing exporting SMEs. Collaboration focused on removing regulatory barriers and bridging the digital divide will be key to realizing SMEs' international market ambitions."

Improving customer experience is the top priority for SMEs (57%). While small businesses typically invest only around 5% of their annual revenue in enhancing digital transaction capabilities, the use of digital technologies such as data analytics, machine learning, artificial intelligence, real-time tracking, display solutions, and technology training for staff is seen as critical to addressing customer experience challenges.

Despite the clear potential of technology, nearly three-quarters (71%) of survey respondents cited developing or implementing a digital strategy as their biggest challenge, followed by mitigating security threats (65%) and the cost of upgrading existing systems (64%).

As expertise and budget constraints persist, digital transformation can be simplified by partnering with firms that own digital tools and platforms, which can be used or integrated into their systems.