8 out of 10 Exporting SMEs Say "Worsening Due to COVID-19"

Photo by Yonhap News

[Asia Economy Reporter Moon Hyewon] Eight out of ten small and medium-sized export enterprises expect their exports to worsen after April due to the global spread of the novel coronavirus infection (COVID-19).

According to the 'Survey on the Impact of COVID-19 on Exporting Small and Medium Enterprises' announced by the Korea Federation of SMEs on the 28th, 78.7% of the 300 exporting SMEs responded that exports would deteriorate. The survey was conducted from the 22nd to the 24th of this month via telephone, email, and fax.

The reasons cited included ▲decrease in new orders and delays in delivery of existing orders due to reduced demand in export countries (69.5%) ▲restrictions on business activities in export countries due to entry bans (50.0%) ▲reduced opportunities for orders due to cancellation of overseas exhibitions (25.4%), among others.

Additionally, 68.0% of the responding companies reported worsened financial conditions in the first quarter of this year, and 22.7% of companies secured external funding.

Among the companies that secured external funding, 77.9% obtained less than 50% of the required funds.

As countermeasures against deteriorating trade conditions, SMEs prioritized discovering alternative markets (32.7%). This was followed by ▲strengthening management of existing clients (31.3%) ▲tightening management such as wage cuts and unpaid leave (29.3%) ▲strengthening non-face-to-face marketing such as online methods (29.0%).

They requested the government to ▲strengthen support for operating funds such as labor costs (55.3%) ▲prepare support measures for shipment delays and payment delays (38.0%) ▲strengthen responses to allow businesspeople entry into export countries (22.3%).

Choo Moon-gap, Head of Economic Policy at the Korea Federation of SMEs, said, "As COVID-19 prolongs, damages such as order cancellations and payment delays from overseas buyers are becoming apparent," adding, "It is necessary to promptly implement export policies such as providing working capital support and deploying charter flights to major trading countries."

This content was produced with the assistance of AI translation services.