Based on an interview with Kirsty Godfrey-Billy, Chief Financial Officer and
Kevin Fitzgerald, Managing Director

For over a decade, Xero’s cloud accounting software has been helping small and medium sized enterprises (SMEs) simplify their business back office functions. Xero’s applications allow businesses to better track inventory, payroll, billing and many other business functions in real time. Its tax and reporting functions help businesses meet their obligations and measure their performance. Since it is a cloud computing platform, businesses can access their ledger from any location using any operating system. In addition, Xero has an open API, meaning that developers can work with Xero to design plug-ins that create extra functionality. There are more than 70,000 users of Xero’s API developer tools and over 800 connected apps in Xero’s ecosystem. In Australia and New Zealand, over a million businesses subscribe to its ‘Software as a Service’ platform. Globally, Xero has more than two million subscribers.

Xero’s focus on the constantly evolving needs of SMEs also drives its Asia strategy. Reaching these customers and meeting their needs has depended on the relationships it has built with banks, government departments and software developers. Demonstrating a commitment to the region has established its reputation as a market leader in multiple regions. It has also equipped it with the network of collaborators it draws on to rapidly customise its platform to the particular banking, tax and regulatory requirements of SMEs in each market to keep up with technological change.


Xero applies insights gained from success in its home markets (New Zealand and Australia) to identify opportunities overseas. Kevin Fitzgerald, Xero’s Managing Director, Asia, has led Xero’s expansion into Singapore, Hong Kong and across Asia. He points out that consumers have the biggest impact on when and how SMEs digitise. In many parts of Asia, it is normal to pay through a QR code or the vast numbers of digital wallets now in common use. The growing popularity of these tools, more than anything else, has driven SMEs’ decisions to invest in digitising the point of payment. Fitzgerald explains that the moment businesses are satisfied that they have adapted their front offices to the demands of their customers, they turn their attention to the back office. “We digitise the back office and then the business realises all the other things Xero can do. It then becomes a wider digital platform when they realise the power of it.” Xero had observed this inflection point occurring in Singapore, which in part drove its decision to begin its Asia expansion there.


Policies to digitise SMEs in Hong Kong and Singapore have enabled Xero to position itself between banks, governments and SMEs as a trusted partner. “We recognised pretty quickly that the banks have a much stronger relationship with SMEs versus anywhere else I’ve seen in the world,” Fitzgerald says. “The banker is still the go-to person for business advice. They go to talk to banks about software. The reason is that Singapore and Hong Kong have a lot of grants to help businesses digitise. But they shift them through the banks. It’s a well-controlled and well-oiled mechanism.” Xero was in a strong position as a global market leader to build relationships with banks when it entered the Singapore market. It was quick to launch partnerships with DBS Bank, OCBC, HSBC, UOB and CIMB to enable transactions to flow into their Xero files each day providing real-time information. Xero realised that to convert SME-facing banking partners to advocates for its product, it needed to demonstrate a commitment to the market. As a leader in the kind of technology that the banks and governments need to further digitise, Xero has been able do this by offering itself as a trusted advisor. “We went in with the approach that we can help you understand what you need to do, rather than approaching it as a race to get it done. So we became a consultant to them. In turn, they’re talking about us with the SMEs and communicating the message about Xero,” explains Fitzgerald.

Building relationships with the developers that make up its API community in Asia relies on a similar dynamic. When Xero entered Singapore, it was seeking to build relationships with developers. It needed to assure them they were investing their resources in a partner that would stay around. Xero now finds that it is being approached by developers across Asia to help it customise its platforms to tax and other requirements across the region.


Xero’s commitment to building and maintaining partnership networks in Asia is driven by more than the need to build its brand. It also allows Xero to quickly adapt to tax and regulatory requirements to meet the particular needs of SMEs in each market it enters. As an example, payroll is different in each country. Xero has partnered with the leading cloud Payroll/HR partners in each country to ensure local compliance is met; this is where Xero works with the best of breed in each country to localise its product offering. Allowing these partners to focus on their technical solution and partner with Xero brings the SME a powerful cloud solution.

When the Singapore government announced it would be integrating a new e-invoicing system, Xero tapped its developer community and found a solution that could be easily integrated in weeks, ensuring Xero was one of the first companies to apply it. “We went with an ecosystem partner that already had the e-invoicing capability built. Within a matter of two weeks we had completed the beta testing. We worked with them and the government, achieved sign-off and launched.”