Riding ASEAN’s Growth To Power Long-Term Success

Small businesses in Asia-Pacific are targeting Southeast Asia for growth by prioritizing digital and sustainability strategies..

The survey polled 250 business leaders of small and mid-sized companies in APAC, including founders and C-suite executives across a range of industries.

According to S&P Global Market Intelligence, the ASEAN region is expected to continue to be one of the fastest-growing in the global economy over the next decade, and an increasingly important growth engine for APAC.

In the near-term, ASEAN’s growth will be supported by the continued expansion of domestic demand in several large economies in the region. Foreign direct investment inflows are also expected to remain strong, as multinationals continue to diversify their manufacturing supply chains.

However, challenges remain for small businesses to truly realize cross-border opportunities. Half of the respondents in the Forbes study cited complex customs requirements and documentation as their primary hurdles, ahead of finding new customers and partners or suppliers in global markets.

With limited in-house trade compliance expertise, navigating different customs regulations across markets remains complicated, according to those surveyed.

In the face of these obstacles, SMEs can partner with experienced logistics suppliers who have the capabilities to ensure that their international shipments are delivered efficiently and intelligently. For instance, FedEx enables businesses to transmit their trade documents electronically, and is leveraging data to generate predictive algorithms, to prepare customs clearance information, ensuring that shipments can be delivered as soon as they arrive in their destination country.

In particular, many companies are exploring the use of generative AI (Gen AI) in various functions, transforming them into more efficient and effective processes. Tech consultants Forrester predicts that 30% of APAC businesses will benefit from Gen AI’s transformative impact. Among other use cases, SMEs are using Gen AI to power tools that can rapidly analyze feedback to improve customer experiences, automatically generate reports to boost employee productivity, and generate content to enhance marketing efforts.

Businesses will also need to boost their cross-border e-commerce capabilities to stay competitive. That said, 54% of respondents say less than 5% of their organization’s annual IT budget supports such capabilities.

Small businesses with limited budgets can overcome these constraints through collaboration with logistics experts who integrate with e-commerce ecosystems for ordering, invoicing, and delivery. For example, FedEx is providing services within e-commerce marketplaces. Among other benefits, these services enable small businesses to access shipping options and generate shipping labels without leaving the platform. To further enhance convenience, FedEx has integrated instant messaging services like WhatsApp with its interactive e-commerce delivery solution FDMi which provides customizable delivery options and alerts to shoppers.

Integrating sustainability is increasingly important for business expansion, even for smaller businesses. Policymakers and regulators increasingly require corporations to embed Environmental, Social and Governance (ESG) considerations within their own operations and value chains, and to disclose them. While SMEs may be exempt from such requirements at this time, they may be required by their large customers to satisfy certain sustainability standards. Furthermore, with more consumers globally demanding sustainably produced products, it makes sense for small businesses to incorporate ESG into their operations even if they are not required to do so by regulators.

Indeed, some 66% of companies surveyed are focusing their ESG efforts on producing or delivering products and services that have positive social impact, as well as promoting social awareness and addressing issues facing society at large.

To help them in this effort, FedEx offers a Sustainability Insights dashboard that companies can use to better understand their emissions for reporting and planning. This cloud-based data tool utilizes near-real-time data from FedEx’s network to estimate CO2e emissions from shipping activities.

By employing digital tools such as AI and analytics, along with prioritizing sustainable practices, more SMEs in APAC are seeking to enhance their operational efficiencies and align with the global green transition to drive their long-term growth.

This article was originally published on Forbes.com on May 30,2024.