Chinese SMEs expand into ASEAN through digital-first model

Consumer goods, digital solutions, and logistics are driving outbound expansion.

Chinese small and medium enterprises (SME) are accelerating expansion into Southeast Asia through low-cost digital strategies as war and shifting supply chains push firms to diversify beyond their home market, according to OCBC Bank (Hong Kong) Ltd.

OCBC is positioning its Hong Kong and Singapore network to capture rising cross-border activity as mainland Chinese and Hong Kong firms expand into ASEAN markets including Indonesia, Vietnam, Thailand and Malaysia.

“The key trend is they will build brands targeting overseas middle-class customers and leverage e-commerce platforms for quicker market entry,” Mimi Tsang, head of commercial banking cash, emerging business at OCBC Bank, told Asian Banking & Finance.

She said SMEs are increasingly entering overseas markets through a “small batch” strategy, letting firms test demand digitally before gradually expanding distribution and production operations.

Consumer goods, digital solutions, logistics and environmental, social and governance-related businesses are among the sectors driving outbound expansion, she added.

China’s Ministry of Industry and Information Technology in April rolled out measures identifying “quality” SMEs and encouraged local governments to support overseas expansion through financing, tax, and industrial policies, according to state-owned news agency Xinhua.

“We see our clients using Hong Kong for capital structuring and treasuries, whilst Singapore serves as their ASEAN operation hub,” Tsang said via Zoom.

She said firms continue to face financing, compliance, and operational challenges even with digital-first expansion models. One issue that SMEs often face when expanding overseas is lack of financing, she pointed out.

OCBC lets clients open multi-market accounts across Hong Kong and ASEAN using a single set of documents, reducing setup costs and processing time, Tsang said.

The bank also provides multicurrency settlement services and offshore financing support to help firms deploy Hong Kong-based capital into Southeast Asian operations. “That will help the clients to have lower setup costs,” she said.

OCBC’s regional network spans 250 branches across Singapore, Malaysia, Indonesia, Thailand, and Vietnam, giving SMEs local banking access without rebuilding relationships in each market.

Tsang said SMEs are also increasingly seeking support beyond financing, including tax, legal, and compliance guidance as they navigate unfamiliar regulatory environments and fragmented supply chains.

“How do they acquire the talent on the ground in specific countries and build the brand?” she asked. “In these kinds of challenges, we could support our clients and provide seamless connectivity across different markets.”

She added that structural shifts in global supply chains and the rise of Southeast Asia’s middle class would continue pushing Chinese SMEs to expand overseas.

The rapid growth in young populations and the middle class will also push SMEs to go global, Tsang said.

OCBC earlier revealed plans to more than double its support for small and medium-sized enterprises (SMEs) through sustainable financing.

The Singapore-headquartered bank aims to support 12,000 SMEs across Singapore, Malaysia, Hong Kong and Indonesia by 2028, up from just 5,000 in 2025, it said in an April announcement.

Commitments will include social loans as well as dedicated programmes to women entrepreneurs and women-led businesses in the four markets.

OCBC expects this move to drive its SME sustainable finance commitments from nearly $10.14b (S$13b) to $19.5b (S$25b) by 2028.

In 2025, OCBC said that the total number of SMEs it supported with sustainable financing rose by 34% group-wide, and its total commitments in the space for SMEs grew by approximately 40%. The number of sustainability-linked loans extended to SMEs also more than doubled, with over 70% of these borrowers are small SMEs with less than 25 employees, it said.

Sectors that drove the growth included building and construction, manufacturing, and transport and logistics.