Navigating Start-Up Success In Asia

Asia’s booming start-up scene is more vibrant and dynamic than ever. With growth being fueled by cross-border commerce, start-ups that are able to expand beyond their home countries can be more competitive as they respond to constantly shifting market demands and dynamics.

Home to some of the fastest growing economies in the world, the Asia Pacific, Middle East & Africa (AMEA) is a hotbed for start-ups. Indeed, the region offers fertile ground for new companies to get up and running. Funding opportunities, demographics, government support and a robust logistics infrastructure are all helping to create more opportunities for new businesses that cater to the region’s growing economies and consumer base.

Leading the Race in Access to Capital

Newly founded companies in the region are taking an increasing share of global venture capital funding. For example, in the ten countries that make up the Association of Southeast Asian Nations (ASEAN), foreign direct investment is growing fast. And in the Asia Pacific region, private equity assets under management have grown at more than double the rate of Europe and North America over the past decade.

Favorable Demographics Offer Advantages

According to a recent McKinsey & Company report, Asian consumers will account for half of global consumption growth in dollar terms over the next ten years. By 2025, half of all consumer transactions will happen in Asia. This rise in purchasing power has surpassed even the most optimistic projections from a decade ago.

In addition to a growing pool of potential customers, there are other economic and demographic factors putting start-ups in Asia in a good position for success. More than half of ASEAN’s population is under 30 and are true digital natives—and a younger, tech-savvy population means more high-quality talent for companies to choose from.

Governments Keen to Nurture Start-ups

Seeking to drive economic growth in their respective countries, governments across the region have demonstrated support for start-ups through grants, technical support, beneficial tax regimes and other policies. Japan, for example, has an initiative called J-Start-up to support and incubate start-ups by providing business space, support grants, accelerator programs and subsidies, and many other territories in the region, including India and Hong Kong, have similar programs.

Strong Logistics Ecosystem Becomes an Enabler for Success

During the pandemic, e-commerce cemented itself as the dominant sales model across the globe. Today’s start-ups are establishing themselves on digital business principles to lower the costs of doing business, improve efficiency, and more easily reach vendors and customers overseas. But going international is not without its challenges. Logistics, including not just shipping itself but customs, duties and international payments, can take up a disproportionate amount of time and other resources that start-ups could be spending on other aspects of their growing businesses.

Typically, start-ups do not always have the bandwidth or expertise in all aspects of operations. Smaller companies can face bigger obstacles when dealing with foreign markets than their larger, established competitors do simply because of economies of scale. They also often lack funding and resources to throw at new opportunities as they arise.

Logistics providers like FedEx have been working in the region for decades to build networks and develop easy-to-use solutions to overcome these challenges for companies large and small. The digital economy has also accelerated the growth of a new wave of logistics products specifically tailored to this segment.

Cross-border transactions are now simpler than ever, with service providers using tech-enabled products that let sellers seamlessly integrate international shipping, trade documents for customs processing, and even foreign currency payments into their existing technology platforms.

This means start-ups are increasingly able to break free of borders and reap the benefits of buying and selling into international markets. This includes diversification of supply chains to make sourcing, production and inventory management more resilient; and being able to respond quickly to changing demand, regulatory environments and even product lifecycles. On this front, FedEx provides invaluable support to Asia’s start-ups looking to turn international opportunity into revenue reality.