SME success dependent on right market access support

By Hardy Diec - Managing director, FedEx Express Indochina

Recent research commissioned by FedEx shows that in Vietnam, eight out of 10 SMEs that engage in imports and exports are exporting to markets outside of the Asia-Pacific, higher than the regional average of 71 per cent. Around 57 per cent of those are optimistic and believe they will see a further increase in exports beyond the region in the year ahead. At the same time, SMEs in Vietnam are even more bullish about exports within the Asia-Pacific, with almost two-thirds anticipating increased revenue growth. Clearly, there is significant opportunity for trade within these markets.

SMEs are increasingly looking for opportunities to grow their cross-border commerce. Many SMEs in Vietnam understand the importance of moving up the global value chain. They recognise that it is a driver for job creation and growth that opens up possibilities previously only available to global players.

Some Vietnamese SMEs have made great strides in participating in the global value chain. Thousands of products ranging from robotics to sophisticated medical devices, many of which came from SMEs, have helped Vietnam steadily move up the trade partner list of many markets, including the United States. E-commerce is also opening doors for SMEs in Vietnam, where revenues are expected to grow by about 15 per cent to reach more than $4 billion in 2022.

These shifts and developments present exciting advantages as well as daunting challenges for SMEs. They will need to develop focused strategic plans and take advantage of the support that is in place to reap benefits from the current market opportunities. Providing SMEs with the right support will help them ignite business growth.

The right regulatory environment is one of the key components to support SME engagement in global trade. Trade facilitation reforms are important to streamline trade and reduce administrative time and costs, especially for small- and medium-sized exporters who are the ones most affected by varying customs procedures around the world.

It is important to invest in education to help SMEs understand the rules of trade as well as the processes and challenges of venturing into new markets. Networking and having access to information from industry bodies and SME associations can help SMEs learn about current market issues and conditions.

In addition, SMEs need to take advantage of technology, which is a great enabler of success and growth. Using technology to transform payment systems and simplify processes for e-retailers can help create effortless transactions and enhance the shopping experience for consumers.

At FedEx, we have been consistent in our drive towards developing solutions that will empower SMEs to take the regional and global leap. For example, we have a range of digital tools that are simple and convenient for SMEs to manage their shipping needs and we offer resources that help SMEs understand the trends and customs requirements for different markets. FedEx also has a website for small businesses and the FedEx Business Insights Hub, which offers valuable information on doing international business, ecommerce, and shipping.

Connectivity and access to a global network plays an important role in SMEs doing cross-border trade. In July 2018, FedEx launched a new route between Hanoi and Guangzhou, home of the FedEx Asia-Pacific Regional Hub, which benefits all Vietnamese businesses with shorter transit times for deliveries within and outside the region.

With the right support and access to regional and global markets, SMEs can harness the possibilities around the world and elevate their competitiveness. SMEs have the potential to build Vietnam into one of the most dynamic Asian economies.