A factory in the northern province of Vĩnh Phúc. — VNA/VNS Photo Danh Lam
Most companies in Việt Nam remain optimistic about the current business environment, the Business Outlook Study 2024 has revealed.
The study, which surveyed more than 4,000 businesses in seven key markets across ASEAN and Greater China, including 525 businesses in Việt Nam found that nearly 90 per cent of businesses expressed interest in venturing overseas in the next three years.
ASEAN is the top choice, with nearly seven in 10 businesses wanting to expand in this region. Mainland China is the second key market, with 37 per cent preferring to venture into this country. Within ASEAN, Thailand is the most important country that businesses in Việt Nam want to venture into, followed by Singapore, Malaysia and Indonesia.
About 60 per cent of businesses surveyed said their top motivator to expand overseas is to grow revenue. Cross-border digital trade platforms are a popular means of overseas expansion, with more than nine out of 10 businesses showing interest.
However, overseas expansion is challenging due to several main barriers including a lack of customers in the new markets (41 per cent), lack of legal, regulatory, compliance and tax support (39 per cent), and difficulty in finding the right partners to work with (38 per cent).
To successfully expand into overseas markets, businesses are expecting financial support such as tax incentives or rebates (42 per cent) and funding or grants available for new markets (40 per cent).
More than 40 per cent are also looking for non-financial support, like connections to large corporate businesses that are prospective anchor clients their company can supply to in overseas markets, according to the study.
Looking forward, nearly 90 per cent of businesses surveyed expect a positive outlook in 2024 with improved business performance. To achieve this, businesses are looking to adopt digital solutions, upgrade equipment or facilities to improve productivity and diversify sales channels to drive growth.
The study found that nearly nine out of 10 businesses have adopted digitalisation in at least one department. About 41 per cent of businesses have digitalised the entire business, the highest rate in the region.
At the same time, over 80 per cent are planning to spend more on their digitalisation efforts in 2024, with most budgeting an increase of 10-25 per cent.
However, businesses expect to face several challenges, including cybersecurity concerns, lack of digital skills among employees and increased risks of data breaches.
Businesses said they want more tax incentives/rebates, connections to the right technology and solution providers and training programmes to reskill/upskill employees to adopt digitalisation.
The UOB Business Outlook Study 2024 (SMEs & Large Enterprises) aims to understand the business outlook and key expectations among SMEs and large enterprises across seven markets including Singapore, Indonesia, Malaysia, Thailand, Việt Nam, mainland China and Hong Kong. — VNS