APAC micro-MNCs optimistic on digital trade, view technology and brand as key to success: Deloitte

30.08.2024 - 07:30:09

Business Wire India

Asia Pacific has sustained rapid trade growth, accounting for approximately 40% of global trade activity in 2023
71% of surveyed micro-MNCs are upbeat about cross-border digital trade
88% prioritise brand, and most are increasingly adopting big data, AI, e-payment, and other digital technologies to grow
Report unveils Going-Global Potential Index assessing APAC nations’ trade environment

Deloitte has launched a new report that finds micro multinational companies (micro-MNCs) in the Asia-Pacific region are increasingly adopting digital technologies and investing more in branding amid optimism on cross-border e-commerce and digital trade.

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Deloitte and WorldFirst launches the report at Global Voyage Singapore Stepping Out conference on August 27. (Photo: Business Wire)

Strong APAC growth and new trends

report, in collaboration with WorldFirst, reveals that Asia Pacific (APAC) has maintained its status as a key driver of economic growth amid a global slowdowns, geopolitical tensions, and rising protectionism. The region’s import and export trade in goods accounted for approximately 40% of global trade activity in 2023, nearing USD18 trillion—up 30% from USD13.7 trillion 10 years ago. WorldFirst is a one-stop digital payment and financial services platform for global businesses, especially SMEs in international trade.

Of the surveyed micro-MNCs—enterprises engaged in cross-border e-commerce and digital trade—71% remain optimistic about prospects for cross-border e-commerce over the coming year. This suggests most companies are confident in market demand, the policy environment, and technological advances, anticipating continued market expansion with substantial growth in sales and profits.

Meanwhile, there is a broad consensus among the surveyed enterprises on the importance of brand, with 88% recognising brand power as crucial to sustaining long-term business growth. Brand not only helps businesses establish differentiated competitive advantages in the market but also enhances customer loyalty and market share. As a result, 68% of businesses said they will increase investment in branding.

Big data analysis will lead the application of digital technologies among micro-MNCs, the survey found. At 75%, it is currently the most prominent and widely applied technology, followed by AI (47%), as both technologies are directly related to business optimisation and enhanced customer experience. Meanwhile, technology applications in payment and settlement (20%) and risk management (18%) demonstrate the importance of security and stability for enterprises.

“Digital trade enterprises are leveraging leading-edge digital technologies such as big data analytics, AI, IoT, and cloud computing to forge innovative business models and value chains, enriching the global marketplace with a broader spectrum of goods and services," says Cheng Zhong, managing partner of Technology, Media and Telecommunications Industry, Deloitte China. "Moreover, digital platforms—represented by cross-border e-commerce, are transcending space and time, fostering seamless collaboration across the global value chain."

Echoing this sentiment, Lydia Chen, Deloitte China Research partner, adds, "The vast majority of SMEs are making a pivotal shift into cross-border e-commerce, leveraging platform enterprises, their expansive international service ecosystems, and digital technologies.”

Cross-border businesses seek comprehensive payment and financial services platforms

The Deloitte-WorldFirst survey also found that more micro multinational enterprises have begun to run multiple business lines across different e-commerce marketplaces, and established local operations in overseas markets, a shift partly due to fiercer competition in cross-border e-commerce. This trend has led cross-border businesses to seek integrated payment and financial services providers.

Consequently, cross-border trade payment firms have transitioned to one-stop, comprehensive platforms that offer payment, trade financing, and other financial services. They have also integrated upstream and downstream supply chain services, such as logistics, taxation, and advertising, to support the various business scenarios of micro MNCs.

“WorldFirst is proud to collaborate with Deloitte to explore the opportunities and challenges confronting today’s micro multinationals. This report’s findings are designed to better support SMEs across APAC—key drivers of regional economic growth and employment—in leveraging the vast potential of cross-border digital trade,” says Clara Shi, CEO of WorldFirst.

Going-Global Potential Index of Asia-Pacific Digital Trade

Digital trade in APAC is growing rapidly, representing a quarter of global trade in digitally deliverable services. From 2017 to 2022, APAC’s digitally deliverable services exports grew at an annual rate of 10.3%, outpacing the global average of 7.1%. The region’s leading export markets include China, Japan, Singapore, and Australia. The European Union (EU) and North America stand out as the region’s primary external trading partners, accounting for 27% and 20% of APAC export trade, respectively.

Deloitte and WorldFirst developed the Going Global Potential Index of Asia-Pacific Digital Trade to assess the digital trade environment for each country in the region based on their growth potential and market scale. The findings segment APAC markets into the following categories:

High Potential Markets: Indonesia, Malaysia, Vietnam, Thailand, and the Philippines
Mature Markets: Singapore, Japan, and South Korea
Early-Stage Markets: Cambodia, Myanmar, and Laos
Budding Markets: Brunei

As a mature market, Singapore’s position as a global commercial centre and an international logistics hub provides a firm foundation for businesses to conduct digital trade. It consistently ranks at the top of global business environment indices. Singapore has also contributed to the construction of the digital trade ecosystem and reduced digital trade barriers through extensive trade partnerships. Although its domestic e-commerce market is not large, its advantages in trade, transportation, and digital infrastructure endow it with a pivotal role in Southeast Asia’s digital trade.

The Deloitte research surveyed approximately 300 cross-border SMEs, typically with fewer than 500 employees and primarily based in East and Southeast Asia.

About WorldFirst

WorldFirst is a one-stop digital payment and financial services platform for global businesses, especially SMEs in international trade. WorldFirst empowers SMEs to successfully execute their strategic growth plans with technology. The World Account, by WorldFirst, caters to SMEs engaged in international business, supporting online businesses selling on marketplaces and websites, as well as importers and exporters. Services include receiving payments, making payments, currency conversion, risk management and supply chain financing to help customers reduce costs, improve turnover efficiency to generate more revenue and sales, and quickly capture global business opportunities. Founded in London in 2004, WorldFirst joined Ant International in 2019. Learn more about WorldFirst at https://www.worldfirst.com.

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