Q3 SME Export Recovery... September Record High Performance Up 19.6%

4.0% Increase Year-on-Year to 25.6 Billion Dollars

[Asia Economy Reporter Kim Daeseop] In the third quarter of this year, small and medium-sized enterprises (SMEs) saw their export amounts return to an upward trend, marking a recovery.

According to the '2020 Third Quarter SME Export Trends' announced by the Ministry of SMEs and Startups on the 20th, export amounts recorded $25.6 billion, a 4.0% increase compared to the same period last year. Exports, which sharply declined in the second quarter due to COVID-19, gradually recovered after June and achieved the highest performance in September, driving the export growth in the third quarter.

In the third quarter, exports decreased in July and August but increased by 19.6% to $9.4 billion in September. The export growth in the third quarter was influenced by the top five export countries (accounting for 58% of total exports), centered on the United States and China, returning to an upward trend. Exports by country were $5.85 billion to China (up 6.8%), $3.35 billion to the United States (up 13.5%), and $2.5 billion to Vietnam (up 0.9%).

By product category, 13 out of the top 20 items, including other precision chemical products (including diagnostic kits) and cosmetics, showed an increase. Global demand for K-quarantine products expanded significantly, with exports of diagnostic kits increasing by 2042% compared to the same period last year. The export share of SMEs within total corporate exports in the third quarter rose by 1.4 percentage points compared to the same period last year.

Although SME exports increased in the third quarter, exports from January to September this year amounted to $72.1 billion, a 2.9% decrease compared to the same period last year. The number of exporting SMEs from January to September this year was 86,400, a 0.3% increase compared to the same period last year. Notably, new exporters of K-quarantine products such as other precision chemical products, pharmaceuticals, and other textile products (including masks) increased significantly.

Since COVID-19, online exports centered on SMEs have surged, and exports of promising items aligned with the untact (contactless) trend continue to expand. The top five online export items for SMEs this year are cosmetics, clothing, daily necessities (plastic products), fashion accessories, and stationery & toys.

The Ministry of SMEs and Startups expects the improvement in SME exports to continue into the fourth quarter of this year. However, considering the base effect compared to last year's fourth quarter performance and the possibility of a COVID-19 resurgence, there remain risk factors for exports in the fourth quarter.

Minister Park Young-sun of the Ministry of SMEs and Startups emphasized, "Our small and medium-sized ventures have performed relatively well even amid the COVID-19 crisis, serving as a pillar for our exports." She added, "We will actively promote support measures to create a foundation that allows SMEs to start online exports more easily and continuously build their capabilities, so they can seize new export opportunities such as online channels and expand SME exports."