About 1 in 2 S’pore firms earns over 40% of revenue from overseas markets: Poll

SINGAPORE – Increasing numbers of firms in Singapore are earning a significant share of their income from overseas markets, according to a new survey.

It found that 56 per cent of companies polled generated more than 40 per cent of their revenue from abroad, up from 54 per cent in 2023, with more also planning to seek opportunities overseas.

The survey of 519 companies was conducted by the Singapore Business Federation (SBF) between August and October 2024. Small and medium-sized enterprises (SMEs) made up 87 per cent of those polled, with the remainder being large companies.

The survey found that more firms are planning overseas expansion in 2024 than in 2023, with Vietnam, Indonesia and Thailand now the top targets.

In 2023, Malaysia, Indonesia, Vietnam and China were among the most popular markets, but interest in Malaysia and China has since waned. Companies are also exploring more distant locations like the United Arab Emirates, Saudi Arabia and New Zealand.

SBF chief executive Kok Ping Soon said: “It is heartening that despite the uncertainties in the external environment, more businesses are considering overseas expansion and expect growth in sales in the next 12 months.

“It reflects the resilience of our businesses and their recognition that scaling internationally is critical for their growth.”

Firms cited strong demand for their products and services, revenue diversification, high manpower costs in Singapore and lower operating costs overseas as key reasons for expanding abroad, the survey found.

Ms Wong Peck Lin, founder of Udders Ice Cream, said the Singapore market is “small and saturated”. Udders’ products can be found in countries such as China and Britain, as well as the French island of Reunion, according to its website.

“The moment you start a business, you have to lay the foundation for overseas expansion in the future and always be ready for growth,” Ms Wong said.

Mr Sim Teck Lee, general manager at carpentry materials supplier Keminates, offered another perspective. Keminates is headquartered here but has an office in Thailand. He said: “In business, there are always risks involved. For SMEs, they may be constrained by manpower, funding, business connections and expertise in the countries they want to expand to.

“Support from the government body or trade association is important, as most SME members may not have enough resources or the network to navigate through the market’s challenges.”

The survey found that intense competition, geopolitical risks from conflicts in Europe and the Middle East, trade tensions between the US and China, and supply chain disruptions were some of the top challenges companies faced after expanding overseas.

Despite these hurdles, fewer of these companies reported sales declines in 2024 than in 2023.

But firms considering overseas expansion are held back by potential risks, limited resources and insufficient knowledge of foreign markets, the survey found. The number of firms with an overseas presence has also declined slightly compared with 2023.

The survey found that businesses are tackling these challenges by seeking more support to navigate regulatory hurdles, access centralised information on international expansion and build networks for partnerships.

They are also ready to invest in staff training for overseas roles and engage in networking activities to secure partnerships abroad.

Fewer firms are facing supply chain disruptions as they adapt to an environment where such challenges are becoming the norm.

Logistics delays have now overtaken raw material shortages and price fluctuations as the main issue. Companies are instead focusing on diversifying suppliers and markets rather than renegotiating prices or working with logistics providers to minimise delays, the survey showed.