Top 5 Challenges Small and Medium Enterprises Face When Expanding Globally

Why global expansion isn't just about ambition

Around 25% of SMEs in OECD countries engage in exports, compared to over 90% among large enterprises—highlighting serious gaps in performance and opportunity across sizes. While global trade offers lucrative growth, entering a new market requires more than product readiness—it demands readiness across knowledge, operations, and strategic positioning.

Here are the top five challenges small businesses face when going global:

1. Inadequate market intelligence and misaligned positioning

Without accurate research, businesses often enter international markets based on hearsay, trade-show buzz, or personal networks. Misreading consumer preferences, regulatory frameworks, or pricing norms can result in poorly positioned products and unsustainable offers.

For instance, OECD data shows that SMEs active in global value chains outperform others—but the majority remain unprepared due to limited insight into partner expectations or compliance needs.

2. Language barriers and cultural communication gaps

Effective communication goes beyond translation—it reflects understanding of tone, documentation standards, and negotiation etiquette.

According to FedEx’s Asia-Pacific survey, nearly 70% of SME respondents admit that language and procedural misunderstandings caused them to miss export opportunities. In global B2B environments, even minor miscommunications can derail deals.

3. Limited export marketing budgets

Building global visibility demands investment—in digital marketing, participation in trade fairs, multilingual content, logistics, and compliance. However, only 20–25% of SMEs in OECD countries report having dedicated reRead more:s for export promotion.

This restricts reach to mature platforms like Alibaba, Amazon, or global B2B marketplaces, widening the market advantage gap between larger firms and SMEs.

4. Difficulty finding trustworthy partners

Unlike large firms with global offices or agents, many SMEs rely on unverified networks, local groups, or generic platforms to find partners abroad. This leads to wasted outreach, mismatched inquiries, and missed opportunities.

FedEx data indicates that only 10% of APAC SMEs feel they receive adequate support for entering global markets, with most attempting to establish connections without enough verification or guidance.

5. Absence of structured export procedures

Exporting successfully requires synchronized planning—product readiness, logistics, packaging, trade documentation (CO/CQ), payment protocols, deadlines, compliance, and customs coordination.

Yet significant surveys show that over 60% of SMEs do not have a structured export roadmap or compliance framework, increasing their risk exposure and likelihood of operational delays.

Why international companies should consider SMEs now

Despite challenges, SMEs remain the engine of inclusive global growth. Those integrated into global value chains are more productive, innovative, and resilient. FedEx research further reveals that APAC SMEs exporting abroad saw growth of up to 250% over four years, with more than 70% exporting beyond their region.

This momentum suggests that SMEs—particularly in Southeast Asia—offer strong value to global buyers seeking agility, local insight, and authentic value beyond scale.

Final thoughts

Globalization isn’t reserved for large firms. With thoughtful planning, agile marketing, and reliable processes, small businesses can make meaningful inroads into international markets. As global buyers or trade partners, engaging with these SMEs can lead to mutually rewarding relationships—fueled by transformation, innovation, and scalable trust.