Asia offers an array of opportunities to SMEs looking to realize their potential. Although the Covid-19 pandemic caused economic downturn around the world, Asia remained fairly robust in face of this hardship and now, new opportunities for growth are opening up in this region.
Resilience of intra-Asia trade is unshakable
Around half of all trade in Asia is accounted for by trade with neighboring countries, known as intra-regional trade, rather than international trade. This tendency to favor trade with neighboring Asian countries helped buffer the continent from the worst of the economic impact of the Covid-19 pandemic that was felt hard all around the world. Asia’s economic rebound from the pandemic is partially due to its strong intra-regional tradethat has increased over the last three decades. SMEs in Asia are taking advantage of this stronghold in their own region, and are further helping to facilitate economic growth by increasing trade between Asian nations.
Asian economy set to grow in the next year
While many countries around the world have fallen into recessions following the far-reaching impact of the Covid-19 pandemic, countries in Asia may have resisted the worst of the economic fallout.
In 2020, the world economy shrank by 3.2%. Even the world’s largest economies felt this, with the UK economy shrinking by 11% in 2020, facing its worst downturn since 1709, and the US economy shrinking by 3.5%, the worst economic decline witnessed since 1946. The Asian economy, however, faired better, only contracting by 1.5%, indicating that this region would rebound from the impact of the pandemic faster than others.
Now, the Asian Development Bank reports that Asian economies are growing strong in 2022, at an increase of 4.3%. This growth is predicted to accelerate in 2023 to 4.9%. These figures predict a better outlook than other major global economies face.
Small companies and start-ups are fueling growth in Asia
Small companies and start-ups are at the heart of the future of Asia’s economic growth. Around 40% of “unicorns”, start-ups that are valued at more than $1 billion, are located in Asia, and roughly two-thirds are based in China.
Asia’s wealth of start-ups and SMEs are able to explore new growth opportunities close to home. This has resulted in the rapid growth of Asian B2B cross-border commerce.
Asia’s rising middle class represents strong and growing consumer base
Asia’s rapidly growing middle classoffers SMEs a growing consumer base to tap into. The rising middle-class spending share in India, for example, is greater than 70% and this figure is expected to rise to 80% by the end of the decade.
The growing middle class is increasing the demand for imports from within the region. By 2030, Asia will count for 65% of the global middle class, which will represent a huge market with disposable cash to target.
Growth and prosperity in Asia
The Covid-19 pandemic radically changed the world and today, many of the world’s biggest economies are still trying to overcome its impact. Asia’s strong intra-regional commerce has helped it to weather the storm. As a result, SMEs stand to benefit from continued intra-Asia trade, particularly with the region’s middle-class population set to grow rapidly.
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