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International trade drives small business success

Anuradha Shukla | Feb. 4, 2013
Findings from a global study on small and medium enterprises across 12 countries including China, India and Japan.

Cooperation and trade between countries drives the success for small businesses, according to findings from DHL Express commissioned global research study by HIS on small and medium enterprises across 12 countries, including China, India and Japan.

Small and medium-sized enterprises (SMEs) that trade globally are likely to be twice as successful as those that cater to a domestic customer base.

This is evident from the fact that 26 percent of the companies that were involved in international trade were more successful than the 13 percent of enterprises that had operations only in their home country.

When asked about the advantages of taking their business outside the country, SMEs said that it gave them access to new markets and helped them diversify their offering.

"From companies surveyed in our region from China, India and Japan, we see a strong link between improved business performance and cross-border trade," said Jerry Hsu, CEO, DHL Express Asia Pacific. "As a global trade facilitator, servicing over 270,000 SME customers in Asia Pacific, we see tremendous value that international trade presents to small businesses."

Plans to increase exports

Recognising the benefits of global trade, the majority of SMEs that gained competitive advantage with exports have decided to put even more efforts in international trade.

These companies will increase the percentage of exports over the next three years. However, they face certain hurdles to achieve this goal and are also working towards removing constraints in business infrastructure.

SMEs also face problems while accessing information related to foreign markets and struggle with issues such as high customs duties and establishing a customer base in an alien land. 

Research shows that Chinese SMEs have a high level of international activity but a weak macroeconomic environment is holding Japanese SMEs back.

Indian SMEs have to deal with weaknesses in domestic infrastructure and the effects of a slight slowdown in the economy.

"There is clearly an opportunity for policy makers, but also for large companies, to support this sector as a means to create more jobs, add value, and increase export earnings by developing personalised solutions to help SMEs to grow," said Dick Buttigieg, managing director, IHS.


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