Small and medium-sized enterprises ( SMEs ) in Hong Kong are keen to grow their international trade, despite facing market complexities and transactional challenges, a new report finds.

About 92% of these businesses are optimistic about their overseas growth prospects over the next 12 months, with 75% planning to increase cross-border activities, according to the study conducted by Airwallex Hong Kong. 

The report, Distinctive Paths to Unlocking Global Commerce: Navigating Cross-Border Trade for Hong Kong SMEs, was based on a survey of 300 Hong Kong SMEs across more than 10 industries engaged in cross-border trade. The survey was undertaken from January 3 to February 5 2025.

“SMEs are the backbone of the Hong Kong economy, and in this dynamic environment where ambition meets opportunity, these businesses are increasingly exploring global markets. However, they face challenges with fragmented payment systems and escalating costs that hinder their growth," says Arnold Chan, APAC general manager, Airwallex.

"A robust financial infrastructure is essential for ensuring security, reliability, and scalability, equipping businesses with the foundation they need to thrive on a global stage.” 

Key strategies

SMEs engaged in cross-border trade are prioritizing two key strategies for short-term growth. They are expanding their customer base through cross-border development to drive revenue. This comprises 30% of those surveyed. About 51% of respondents also endeavour to minimize costs by sourcing better-value vendors locally or internationally, demonstrating a commitment to enhancing competitiveness and profitability.

The research also reveals that companies adopt strategies based on their size. Smaller firms predominantly target nearby markets, with 69% focusing on growth within Hong Kong, mainland China, and Taiwan. On the other hand, larger enterprises show a more ambitious appetite for geographical growth, with 59% aiming for expansion across the Asia-Pacific region beyond China.

This divergence illustrates how organizational scale influences strategic priorities, with smaller firms favouring regional familiarity and larger ones seeking out wider opportunities, the report says.

Varying challenges

As SMEs navigate the complexities of international trade, they encounter varying challenges. According to the survey, import/export, wholesale, and manufacturing sectors ( 30% ) face soaring expenses, while professional services ( 28% ) contend with high handling fees.

Retail SMEs lead in cross-border expansion, with 93% aiming for new markets, but face resource shortages and lag in payment knowledge compared to other sectors.

In the context of cross-border transactions, SMEs employ diverse payment methods for various purposes, such as disbursing salaries and collecting payments from customers.

Over 70% of respondents believe paying and receiving payments in foreign currency is a significant challenge. This is compounded by other major pain points, including high transaction fees ( 28% ), security concerns ( 23% ), long payment processing times ( 22% ), and unfavourable exchange rates ( 21% ).

These issues disrupt operations and erode profit margins, highlighting the need for efficient financial tools and smarter financial infrastructure to enhance profitability and streamline global activities, the report says.

Simplifying transactions

While 52% of cross-border SMEs have a solid plan and budget to transform their payment systems, nearly half ( 49% ) believe it will take one to four years to implement these changes, as they seek the right tools and resources to streamline transactions.

The survey also finds that 51% of SMEs lack clarity on overseas licensing requirements, 46% face resource shortages for establishing overseas offices, and 40% lack essential payment infrastructure such as multi-currency accounts.

These constraints highlight the need for a unified platform capable of consolidating transactions in multiple currencies, local payouts, and foreign exchange management, according to the report.

Also, the study finds notable knowledge gaps in cross-border payments among surveyed SMEs. While 69% consider themselves knowledgeable about international transactions, only 15% demonstrate a strong grasp of key payment concepts when assessed.

Fintech solutions

This disconnect presents an opportunity for fintech providers to pair financial solutions with trusted expert advice, empowering SMEs to navigate regulatory, operational, and financial complexities with confidence.

“As commerce becomes increasingly borderless, Hong Kong SMEs' success hinges on transforming cross-border payments from operational hurdles into strategic advantages,” says Paulina Leong, general manager, Hong Kong and Macau, Visa.

“By combining Visa’s trusted payment infrastructure with innovative fintech platforms such as Airwallex, we empower SMEs to overcome transactional barriers, streamline operations, and unlock new opportunities in global markets.”

Singapore-based fintech firm Airwallex provides cross-border payments and financial services to businesses. It has partnered with global card payment platform Visa on a multi-currency virtual  payment account, which enables businesses to pay their suppliers speedily while simplifying transactions and reducing payment fees.