A new study by HSBC has found almost two-thirds (69%) of the world’s fastest-growing companies believe their international earnings will eclipse domestic earnings by 2030.
While overseas revenues currently represent less than half their income, business leaders believe expansion into overseas markets will generate the lion’s share of their earnings within the next five years. The survey suggested that businesses believe a key factor determining whether they are successful will be their ability to navigate mounting uncertainty.
The study involving 1,143 senior decision makers from mid-market enterprises across ten countries, including the US, the UK, the UAE, and India. It highlighted that 77% of executives view international expansion as more important than five years ago, with many looking to emerging markets as the key driver for growth.
Some 60% of those polled are considering global growth to help spread the risk in an increasingly complex economic landscape, and 64% believe global expansion will deliver economies of scale long-term.
The research identified the top factors supporting international success, which include having the right network (24.7%); capable local teams (13.8%); favourable macroeconomic conditions (13.4%) and in-depth market knowledge (10.9%). However, the top three challenges include: regulatory and compliance issues (31%), brand recognition (25%) and increased competition (24%).
In addition, the research reveals how businesses are increasingly using AI to drive their international expansion plans, with 57% stating that they are using it to help simplify tasks such as marketing and supply chain management.
To help companies maximise their growth opportunities abroad, HSBC is launching an online Global Expansion Assessment tool, designed to reveal the unique factors influencing the international growth of a business. The tool asks executives about their business and target market, revealing at the end their top strengths supporting international success, and areas to improve.
HSBC’s international network was a factor for Melanie Brownlow, founder of Hothouse Beauty, whose brands include self-tanning product St. Moriz [pictured].
“Launching in new markets was pivotal for our growth, giving us direct access to new consumers eager for our product,” said Brownlow.
“However, understanding the nuances of demand and navigating various regulations was crucial. With a partner like HSBC, we developed extensive knowledge across key markets such as Europe, Saudi Arabia, the UAE, and the US, enabling us to expand strategically.”
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