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Edwards: SMEs are not naive about the obstacles to unlocking new markets

Edwards: SMEs are not naive about the obstacles to unlocking new markets



Technology vital for SMEs growth: study

Shipa Freight’s global study of 800 SMEs from developed and emerging markets shows that smaller companies are remarkably upbeat about their ability to expand through trade

June 2018

Small and medium-size (SME) businesses that have struggled for equal footing in the global economy are increasingly looking to cross-border trade for growth, seeing technology as a way past obstacles in shipping and compliance, according to new research from Shipa Freight.

Shipa Freight is a new online platform powered by Agility which makes it easy to get air and ocean freight quotes, book, pay and track shipments online.

Shipa Freight’s global study of 800 SMEs from developed and emerging markets shows that smaller companies are remarkably upbeat about their ability to expand through trade.

A total of 89 per cent of exporting SMEs surveyed say their export revenue will grow over the next three years. 71 per cent say they are concentrating more on international markets than on their home markets. The Shipa Freight survey included exporters and importers from the UAE, UK, US, Germany, Italy, China, India and Indonesia, said a statement.

Smaller companies account for an estimated 95 per cent of all businesses and employ two-thirds of the world’s workers. Critics of globalisation have argued that decades of efforts aimed at easing the flow of goods, capital and jobs across borders has come at the expense of SMEs and disproportionately benefitted multi-nationals and other large businesses.

Toby Edwards, CEO of Shipa Freight, said: “Smaller businesses used to think they couldn’t compete in trade. Now many see it as their best path for growth.”

“SMEs are not naïve about the obstacles to unlocking new markets. They see online tools and other technology as a way to conduct transactions, get financing and gather market intelligence,” he said.

Three-quarters of SME executives surveyed by Shipa Freight believe businesses that operate internationally are more resilient. Nearly 80 per cent say they are already using online platforms for freight quotes and bookings, it added.

SMEs identified numerous obstacles they face in international trade. With 42 per cent revealing that the costs of shipping abroad are too high, or that they don’t have an accurate picture of their costs. 40 per cent said they find it difficult to understand documentation
 requirements.

A significant minority say their cargo has been held up in customs (39 per cent) or lost in transit (27 per cent).

Small and medium-sized businesses based in emerging markets are finding export regulations particularly challenging: 67 per cent identify export regulations as a difficult issue, compared with just 44 per cent of SMEs based in mature European markets. Seventy-nine per cent of exporters from India, China and Indonesia say they find it challenging to penetrate markets in Europe.

SMEs that view the UK as one of their top export markets are looking elsewhere because of Brexit. Seventy-three percent say Britain’s vote to leave the European Union has prompted them to prioritise trade with other European countries. 60 per cent of UK SMEs that export and 52 per cent of UK SMEs that import say that leaving the EU Single Market would be “disastrous” for them.

Smaller companies clearly see technology as a way to close the gap with bigger competitors, cope with documentation requirements and get quick access to competitive shipping options. 86 per cent say that tech is “levelling the playing field” for SMEs to operate globally; 89 per cent believe technology is transforming the logistics industry.

Edwards said: “The logistics industry has traditionally ignored SMEs and done far too little to help them find new markets and grow.”

“Technology is giving them the ‘virtual’ scale that they’ve needed to lower their costs, get real-time information and compete,” he added.

Shipa Freight’s Ship for Success research was conducted in winter 2017 amongst 800 companies (400 exporters and 400 importers). There were 100 respondents from each of the following markets: UK, USA, Germany, Italy, India, Indonesia, China and the UAE.

Participating companies were drawn from the following sectors: retail and fashion, fast-moving consumer goods (FMCG), automotive (including supply chain), industrial and manufacturing, and technology.




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