Asia Pacific Trade Finance Market - Industry Dynamics, Market Size, And Opportunity Forecast To 2030

Asia Pacific Trade Finance Market is estimated to witness a rise in revenue from US$ 3,444.3 Bn in 2021 to US$ 5,711.0 Bn by 2030. The market is registering a CAGR of 5.8% during the forecast period 2022-2030.

Trade finance signifies financing for trade, that is used by traders, buyers, sellers, manufactures, importers, and exporters which concerns both domestic and international trade transactions. In order to make a trade transaction, it requires a seller of goods and services as well as a buyer to ease financing activities and deal with cash, credit, investments, and other assets for trade purposes. 

Market Dynamics

The major factor responsible for the growth of the Asia Pacific trade finance market includes rapid expansion of BFSI sector in Asia Pacific region and policy reforms for better integration of SMEs in trade financing. Banks play a critical role in international trade by providing trade finance products that reduce the risk of exporting. The rapid expansion of banks and their increasing ability to adopt new technologies like Blockchain Technology, Internet of Things and Application Programming Interface (API) have helped them to remain as a cost-effective and trusted service provider for trade finance. Moreover, policy reforms for better integration of SMEs in trade financing have always remained a very core and essential ingredient for economic growth and employment generation across many regions of the global economy. Furthermore, collaboration between government and international institutions for development of digital infrastructure provides a lucrative growth opportunity in the Asia Pacific trade finance market. However, the continued use of paper-based transactions and lack of adequate business information on borrower firms are some of the factors that restrict the growth in the Asia Pacific trade finance market.

Report Summary

The study of the Asia Pacific trade finance market considers various market determinants, industry value chain analysis and competitor analysis of the market. The report discusses the analysis of the trade finance industry for the period 2017-2030, where the base year is 2021 and the forecast period is 2022-2030. The report provides a detailed analysis of the Asia Pacific Trade Finance Market across 24 Chapters and 311 pages. The report includes data presentation across 75 tables and 238 statistical figures. 

The report provides PESTLE analysis, which is a tool to examine the external market environment factors that have an impact on the industry. The PESTLE analysis examines the Political, Economic, Social, Technological, Environmental and Legal factors in the external environment. Thus, sufficiently examining the threats and weaknesses of the industry. The research report also provides Porter’s five forces analysis wherein bargaining power of buyers and competitive rivalry is high. 

The subsequent section provides details of the market analysis based on different segments such as offering, provider type, application, end user and country. The report includes detailed study of value chain of the industry. It includes exporters, financial institutes and importers. The report also covers extensively about the key competitors in the market for trade finance. 

Impact of COVID-19 on Asia Pacific Trade Finance Market

The Coronavirus (COVID-19) pandemic had a devastating effect on economies and societies worldwide. International trade has been affected by a reduction in the supply of trade finance. During this phase, the demand for trade was reduced due to lockdowns. Still, there was a surge in the specific demand for COVID-19 related goods and protective equipment, as well as for essential foods. The reduction in demand for goods had been compounded by liquidity shortfalls in the poorest countries. Moreover, social distancing and changes in working conditions have also resulted in the change in preferences of consumer toward trade finance in the market.

Key Takeaways from the Asia Pacific Trade Finance Market Report

• Based on offering, the Letters of Credit (LoCs) segment holds the highest share in the Asia Pacific trade finance market in 2021 owing to their wide usage in commodity trading. Whereas, the trade loans segment is anticipated to grow at the highest CAGR during the forecast period owing to their increasing demand by exporters, importers and domestic traders.
• In terms of provider type, the banks segment held the largest share in the Asia Pacific trade finance market in 2021 and is also anticipated to project the highest CAGR over the forecast period owing to the high preference of banks for finance related services, that includes trade finance. Also, banks are major provider of letter of credits as it is primarily used for international trade.
• On the basis of application, the international trade segment is estimated to hold the largest market share and highest CAGR over the forecast period as trade finance forms a very integral part of all international transaction that take place between two or more parties. Moreover, the rapid globalization and urbanization has helped to increase the share of international trade in the Asia Pacific market.
• By end user, the traders segment dominated the Asia Pacific trade finance market in 2021 and is also expected to register the highest CAGR during the forecast period owing to the steadily increasing number of traders as compared to the importers and exporters. Moreover, traders are generally financing intermediate that form an important link between the importers and exporters.
• Based on country, China holds the largest share in the Asia Pacific trade finance market and is also anticipated to project the highest CAGR over the forecast period owing to the growing awareness regarding trade finance. Moreover, the significant growth of China market is attributed to strong trading base country supported with strict regulatory reforms across the country.

Company Profile 

• Standard Chartered PLC is a global financial services provider that provides a range of personal banking, wholesale banking, private banking, SME banking, and business banking solutions. Moreover, the company provides services such as transactional banking services, mergers and acquisitions advisory services, investment advisory services, wealth management services, private banking services and e-banking services. It serves its customers through a network of branches and outlets across the globe.
• Citigroup Inc., is a diversified financial service holding company, that provides various financial products and services to consumers, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa.

Competitive Landscape

The key players in the Asia Pacific Trade Finance Market are Asian Development Bank, Banco Santander, S.A., Bank of America Corporation, Standard Chartered plc, BNP Paribas S.A., Citigroup Inc., Crédit Agricole Group and Goldman Sachs Group, Inc. among others. Through extensive research, it is found that big players have adopted various competitive strategies such as mergers & acquisitions in order to have a grip of emerging market. Furthermore, leading companies are expanding their geographical boundaries by acquiring small brands and domestic companies.

Segmentation Overview 

Asia Pacific Trade Finance Market is segmented based on offering, provider type, application, end user and country. The industry trends in the Asia Pacific trade finance market are sub-divided into different categories in order to get a holistic view of the Asia Pacific marketplace. 

Following are the different segments of the Asia Pacific Trade Finance Market:

By Offering segment of the Asia Pacific Trade Finance Market is sub-segmented into:

• Supply Chain Finance
• Letters of Credit (LoCs)
• Bonds/ Guarantees/ IndeBnities
• Trade Loans
• Other Services
• Cash Management
• Foreign Exchange Management

By Provider Type segment of the Asia Pacific Trade Finance Market is sub-segmented into:

• Banks
• Trade Finance Houses
• Others

By Application segment of the Asia Pacific Trade Finance Market is sub-segmented into:

• Domestic Trade
• International Trade

By End User segment of the Asia Pacific Trade Finance Market is sub-segmented into:

• Traders
• Importers
• Exporters

By Country segment of the Asia Pacific Trade Finance Market is sub-segmented into:

• China
• India
• Japan
• Australia
• South Korea
• ASEAN
  • Singapore
  • Thailand
  • Vietnam
  • Indonesia
  • Malaysia
  • Philippines
  • Rest of ASEAN
• Rest of Asia Pacific