E-COMMERCE

By Airwallex | November 24, 2024

Airwallex, a leading global payments and financial platform for modern businesses, has released its first Hong Kong import and export trade report. Check out the key insights on Hong Kong's role as a gateway for business expansion.

• Hong Kong companies continue to see the city as a vital international business hub for global import and export trade, with 61% planning to expand into Northeast and Southeast Asia as a strategic imperative.
• However, over 50% said the rising costs of doing business and the complexities of managing global money movement have added to current challenges.
• The Airwallex report shares insights on why digital finance and e-commerce market expansion are critical investments for future success.

Hong Kong has always been a vital hub for international trade, and its role remains crucial as global business continues to flow through the city. Payment platform Airwallex has launched its first Hong Kong import and export trade report to examine how businesses are harnessing technology to stay competitive and drive cross-border growth amidst rising costs.

With Hong Kong’s total merchandise trade reaching US $1,131 billion (HK$8,822 billion) in 2023, its economic impact is substantial as a key gateway for businesses looking to expand into new markets.

Here are three key takeaways from the report.

1. Businesses continue to see Hong Kong as a vital international business hub for global trade

Hong Kong’s prominence as an international trade hub is well established. In the Airwallex survey, 75% of respondents highlighted the city’s tax-friendly environment as a major draw. Nearly 70% value Hong Kong’s strategic proximity and access to the Mainland China market, while over half of those surveyed appreciate the region’s robust financial infrastructure, including the free flow of capital and liquid financial markets.

Building on these advantages, companies are making the strategic decision to establish themselves in Hong Kong as a gateway to new markets. In fact, 82% of respondents revealed plans to enter at least one new region within the next six months, with Northeast Asia, Southeast Asia and Europe top of the list.

2. The rising costs of doing business and the complexities of managing global money movement are key concerns

Global supply chain disruptions and inflationary pressures have posed significant challenges for traders who strive to remain competitive. In the report, 55% of respondents identified rising operational costs, particularly in supply chain and logistics, as a top concern.

51% reported increasing difficulties in managing local and international cash flow, especially when cross-border transactions are complicated by varying regulatory requirements and currency risks.

In response to these challenges, nearly half of the respondents are actively seeking ways to cut costs associated with logistics and inventory, professional fees, office rent and utilities. They’re also trying to better manage financial market volatilities, including banking fees, payment transaction costs and foreign exchange fluctuations.

3. Digitalization of finances and e-commerce are critical investments for future success

As outlined in the report, businesses recognize the potential of emerging technologies and solutions. Many plan to invest in the automation and digitization of finances, global e-commerce platforms, marketing and CRM technology over the next three years.

Notably, 40% of respondents see their companies as pioneering innovators, keen to explore new technologies to enhance their operations.

Among the three in four respondents already using fintech for payments, 92% expressed satisfaction with the pay-in, pay-out and FX services provided by fintech, demonstrating the effectiveness and reliability of these solutions in enhancing financial operations.

As cross-border trade accelerates, the advantages of digital payment and fintech solutions are becoming increasingly evident for SMEs’ bottom lines. An overwhelming majority (90%) shared that they are open to incorporating more fintech solutions for FX and international transfer services. The growing adoption of fintech reflects the significant benefits that SMEs are already experiencing.

The way forward: Embrace tech-driven solutions and reliable cross-border service providers for operational excellence and growth

The survey findings underscore a significant trend among Hong Kong traders, encouraging businesses to embrace tech-driven solutions for operational excellence and global growth.

As operational costs rise and financial landscapes grow more complex, strategic investments in digital transformation and market expansion will only become more pivotal for sustainable growth.

The findings indicated that businesses require fast, reliable and cost-effective shipping solutions, especially during cross-border expansion to address these challenges.

Airwallex has been collaborating with us at FedEx since 2012 to provide a seamless, integrated solution that combines logistics and financial services.

By combining Airwallex’s deep fintech expertise with our global supply chain network, Airwallex can help businesses overcome inefficiencies by streamlining shipping, simplifying customs clearance and providing valuable data management through digitization and smart logistics. This makes businesses more competitive and agile in today’s demanding marketplace.

For more insights and recommendations, download the full report here.

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The Airwallex SME Import and Export Survey is based on insights from 105 cross-border trading companies operating out of Hong Kong.