UPS ABM 2009 Highlights Adaptability of SMEs in China
Shanghai, June 11, 2009 -- The UPS Asia Business Monitor
(UPS ABM) 2009 highlights the adaptability of Chinese SMEs in the face of the
current global economic recession as they fight to sustain business growth by
introducing contingency plans to their business models.
Results from UPS ABM 2009, an annual survey which monitors the changing
perceptions of SMEs in the
Asia-Pacific region show that in the face of a
challenging economy, 64 percent of Chinese SMEs surveyed plan to diversify or
explore new revenue lines. Meanwhile 59 percent will focus on reducing costs and
55 percent will tighten cash management.
"Whilst the economic downturn has seriously impacted the business of a huge
number of SMEs in China, the
ABM 2009 results highlight the adaptability of
the sector as SME managers strive to add business value and control costs to
weather the current climate," said Steven Wong, vice president, Supply Chain
Operations, UPS China.
UPS ABM 2009 also shows the importance attached by SMEs in China to their
supply chain efficiencies. In fact,
93 percent of Chinese SMEs believe
supply chain efficiency is a necessity to business success in terms of
cost-cutting (25 percent), quality assurance (23 percent) and a means to
forecast demand (18 percent).
"We are encouraged by the attention paid by Chinese SMEs to their supply
chains and also note with interest
that 49 percent of Chinese SMEs will
change their supply chain practice in the current economic conditions by
focusing on reducing transportation and distribution costs. With a full range of
supply chain solutions and a global network at hand, UPS is ready to help SMEs
transition through this difficult period by providing cost effective products
and value-added tools for them to operate a more efficient supply chain,"
continued Mr. Wong.
As the only player in the industry with the widest time-definite offerings in
the world, UPS also provides an array
of economy products such as Air
or Ocean Freight and UPS Expedited service. Customers focused on cost over speed
can choose UPS Worldwide Expedited rates (for 3-5 days delivery) which are as
low as nearly half of UPS Express (1-2 days delivery) rates. Advanced UPS online
tools integrate directly into customers' website or systems and offer real-time
tracking of shipments, resulting to a more accurate billing forecast, reporting
and faster cash-for-inventory turnaround. A newly introduced UPS eBilling Tool
also allows customers to analyze and allocate shipping expenses quickly and
easily without paper-based invoices, for seamless reporting and visibility
across functions, projects or business groups.
UPS ABM 2009 also investigates the challenges faced by and obstacles they
need to overcome. Results show
that 81 percent of Chinese SMEs polled
believe the lack of innovation is the biggest obstacle to their competitiveness;
78 percent of Chinese SMEs believe lack of access to business financing is
another concern that blocks SMEs growth. Furthermore, 93 percent of Chinese SMEs
believe government should play a greater role helping SMEs gain better access to
capital and funding, particularly in this challenging period.
"In order to survive the recession and maintain competitiveness, in addition
to calling for help from government,
Chinese SMEs should explore the
opportunities among the challenges. They should adopt what we call "Dual
adjustment and stimulus" tactics. This means firstly, to adjust business
strategy and revenue lines; and secondly, to stimulate technological innovation
and overall competitiveness", said Mr. Chen Nai Xing, Director of the Research
Center for SMEs under the Chinese Academy of Social Sciences.
Although impacted by the global economic downturn, the results of UPS ABM
2009 show that Chinese SMEs
still remain competitive in the region.
Sixty-five percent of SMEs polled in Asia believe China is more competitive than
its own country. Overall, China ranked second behind Japan in terms of
competitiveness.
Furthermore, results indicated more confidence among SMEs in China with 78
percent anticipating a global
economic recovery by 2011 compared with an
average of 47 percent for other markets in the region.
Further Highlights for China in the UPS ABM 2009 include:
SMEs business growth prospects fall.
Whilst 78% of
Chinese SMEs are hopeful that the global economy will recover by 2011, overall
optimism is down
with only 16% of Chinese SMEs polled forecasting
growth for the regional economy in 2009, compared with 47% in 2008. However,
Chinese SMEs still appear more optimistic than their counterparts with 36% of
Chinese SMEs polled this year believing their business will grow compared with a
regional average of 25%.
Government focus is key to economic recovery.
Fifty-one
percent of Chinese SMEs believe government regulations are the key measure
leading to economic recovery. The importance of government regulations also are
recognized by the overall region (46%).
SMEs want local governments to do more to help them weather the
recession.
Eighty-six percent of respondents say that governments
should focus on helping them gain better access to capital, financing and loans.
China growth is a positive thing for the
region.
Forty-six percent of SMEs in the region view China as more
of a boost to their business rather than a threat this year. This percentage
hits the highest level since 2005. A key reason for this is that SMEs believe
China growth can lead to a healthier overall market.
Africa becomes the trading market with the greatest potential for
China.
Forty-eight percent of SMEs in China see their trade with
Africa growing in 2009, with Asia Pacific in second place at 36%.
SMEs are focused on delivering new value and targeting new
markets.
Twenty-nine percent of the SMEs polled cite moving to
higher value-added products and services as the single biggest growth
opportunity under current global economic conditions, while 16 percent feel that
exploring new markets would help them achieve growth. Similarsentiment is
reflected when SMEs discuss their contingency plans ? 63 percent intend to
diversify and/or explore new revenue lines, while 33 percent say they would
change the business model in order to fight the effects of the global economic
recession.
The UPS Asia Business Monitor
Since its launch in 2005,
the UPS ABM has been conducted annually to deliver the latest insights on the
changing business needs of SMEs, the largest business community in the region.
As discussed at the 3rd APEC Business Advisory Council Meeting in August 2008,
SMEs make up 95 percent of all businesses in the Asia-Pacific region and employ
80% of the workforce. This year, the UPS ABM 2009 surveyed 1,200 company owners,
proprietors, CEOs, Managing Directors and other top management across 12
markets.
UPS
UPS (NYSE: UPS) is the world's largest package
delivery company and a global leader in supply chain and freight services,
offering an extensive range of options for synchronizing the movement of goods,
information and funds. Headquartered in Atlanta, Georgia, USA, UPS
serves more than 200 countries and territories worldwide. UPS's stock trades on
the New York Stock Exchange (UPS) and the company can be found on the Web at
www.UPS.com. To get UPS news direct, visit pressroom.ups.com/RSS.
Notes to Editors
- UPS ABM series provides the latest insights into the changing opinions,
attitudes and habits of business leaders from the region's small and medium
sized enterprises.
- UPS ABM 2009 surveyed 1,200 decision-makers of SMEs between January 8, 2009
and February 27, 2009. Interviews were conducted by an independent research
organization, TNS, in Hong Kong using the respondents' native language. SMEs are
defined as companies with fewer than 250 employees.
- Interviews were conducted in the following 12 markets: Australia (100),
China (150), Hong Kong (100), India (100), Indonesia (50), Japan (100), South
Korea (100), Malaysia (100), Philippines (100), Singapore (100), Taiwan (100),
Thailand (100).
- Respondents were from a range of industries: automotive, electronics &
electricals, garments & textiles, gifts & housewares, healthcare &
pharmaceuticals, timepieces, jewellery & optical goods, toys & sporting
goods, and others.
- The UPS Asia Business Monitor is available for download at www.ups.com/abm.
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