SME Export Outlook Brightens... Positive Growth for Three Consecutive Quarters

SME Exports Reach $57.1 Billion in First Half
Exporting SMEs Hit Record High for First Half

A green light has been turned on for exports by domestic small and medium-sized enterprises (SMEs). Exports have increased for three consecutive quarters, and the number of SMEs participating in exports reached the highest level ever recorded in the first half of the year.

On the 24th, the Ministry of SMEs and Startups announced the "2024 First Half and Second Quarter SME Export Trends." SME exports in the first half of this year amounted to $57.1 billion, a 4.4% increase compared to the same period last year. SME exports turned positive starting from the fourth quarter of last year (+1.6%) and continued to increase through the second quarter of this year, marking three consecutive quarters of export growth. The number of SMEs participating in exports was 77,078, a 1.2% increase compared to the same period last year.

Among the top 10 export items of SMEs in the first half, eight items showed an increase compared to the previous year. Cosmetics, the number one export item for SMEs, increased by 30.8% compared to the previous year, setting a record high export value of $3.3 billion in the first half. The diversification of export destinations to emerging markets, in addition to the traditional key markets of the United States and China, is analyzed as a major factor for this increase. Additionally, semiconductor manufacturing equipment, ranked fifth with $1.9 billion, set a record high export value in the first half due to improvements in the semiconductor market conditions. Electronic application devices ($1.3 billion) also achieved the highest export value in the first half, driven by strong exports to the U.S.

Exports to seven of the top 10 SME export countries increased compared to the previous year. The United States surpassed China, which had been the top export destination in the first half, becoming the number one export market. The U.S. recorded the highest export value ever in the first half, with increases in cosmetics (61.5%), other machinery (170.1%), and power equipment (59.3%). Among emerging markets, Mexico and Thailand also recorded their highest export values ever in the first half. Mexico stood out as a North American production base due to nearshoring, with notable exports of automotive parts and molds, while Thailand showed strong performance in seaweed including gim, and cosmetics, driven by the popularity of K-food and K-beauty.

In the second quarter of this year, SME exports reached $29.3 billion, a 5.1% increase compared to the previous year. The growth trend continued in April and May compared to the same months last year, while June ended with a slight decline. Among the top 10 SME export items in the second quarter, seven showed an increase. Cosmetics, the top export item, recorded the second highest performance ever in the second quarter, supported by strong exports to the largest market, the U.S., and double-digit growth rates in exports to Japan, Vietnam, and Hong Kong. Semiconductor manufacturing equipment (26.8%), ranked fifth, saw double-digit increases in major export countries including China, the Netherlands, the U.S., and Taiwan due to the recovery of the semiconductor market.

Exports to eight of the top 10 SME export countries increased in the second quarter. China was the top export destination in the second quarter. However, exports of major items such as cosmetics and plastic products to China decreased. Exports to the U.S., the second largest country, recorded the highest export value ever in the second quarter and have increased for four consecutive quarters since the third quarter of last year, expanding their export share. Mexico, ranked eighth, achieved the highest export performance ever in the second quarter, with significant increases in exports of intermediate goods for manufacturing such as automotive parts, industrial electrical equipment, molds, and other machinery.

Choi Won-young, Director of Global Growth Policy at the Ministry of SMEs and Startups, said, “Exports this year, which were relatively sluggish compared to last year, have been increasing since the beginning of the year, and the growth of cosmetics, the number one export item among SMEs’ main export products, is particularly remarkable.” He added, “The government will also make every effort to contribute to achieving a total export volume of $700 billion in 2024 by preparing measures to expand exports of SMEs’ main export items.”