SME Blog: Hong Kong SMEs gear up for growth amid inflation, economic concerns
QBE Blog: Hong Kong SMEs gear up for growth amid inflation, economic concerns
As we enter the post-pandemic period and the Year of the Rabbit, Hong Kong’s small and medium enterprises (SMEs) are regaining confidence in their businesses and the wider economy, writes Lei Yu, Chief Executive Officer for North Asia and Regional Head of Distribution, QBE Asia.
QBE’s latest annual SME survey shows that almost half (47%) of SMEs in the Special Administrative Region are anticipating rising sales and a positive economic outlook for 2023. China’s rapid reopening of its border augurs well and visitors are once again able to move freely (with some caveats) across the Greater Bay Area and beyond.
It is great to see that many of Hong Kong’s SMEs are expecting to increase spending on staff training, hire more staff, and boost marketing expenditure.
However, despite the optimism, challenges remain. While each business sector has its own unique characteristics, SMEs are worried about a combination of deteriorating investor and consumer confidence, local demand holding up, and rising global inflation. Besides an economic downturn, 37% of SMEs are also concerned about customer retention and acquisition, and 34% are worried about rising business costs.
Caution is clearly a prudent strategy, and one of the lessons from the last few years is that SMEs should be flexible in their approach. Cost control and prudent risk management will also be important.
Other risks high up the agenda of Hong Kong’s SMEs are a loss of income because of business interruptions, losing key staff, and equipment breakdown. While SMEs’ concerns about these events have increased steadily over the last three years, currently fewer than 20% have the relevant insurance cover in place.
Strategic planning for business continuity is critical to SMEs as it ensures business resilience and helps companies respond quickly in case of interruptions. At QBE, we believe having the right insurance protection in place gives SMEs peace of mind and the confidence to focus on their business.
An exciting way to bolster growth is through overseas expansion.
Encouragingly, 14% of Hong Kong’s SMEs are looking to expand abroad for the first time. However, such plans come with their own risks. Multi-country insurance policies can help manage them: from ever-changing local laws, market practices and coverage requirements, to tax regulations, logistics, and cultural differences.
While 72% of those looking to expand are considering purchasing multi-country insurance, it is important more SMEs become aware of the cover as a risk management tool.
We at QBE wish your business every success in 2023. Feel free to reach out to me or our team if you would like to seek counsel about any of these issues.
You can read more about the survey results here: Press Release | Infographic
Lei Yu, Chief Executive Officer for North Asia and Regional Head of Distribution, QBE Asia