6 in 10 businesses have had their supply chains affected
According to the UOB Business Outlook Study 2023, both small and medium-sized enterprises (SMEs) and large enterprises in the ASEAN and Greater China regions are eager to expand internationally to boost their revenue and profits. The study surveyed over 4,000 businesses in Asia, including Singapore, Indonesia, Malaysia, Thailand, Vietnam, Mainland China, and Hong Kong SAR.
Key findings of the survey include:
- Expansion Plans: 83 per cent of businesses expressed a keen interest in expanding overseas, with Indonesian, Chinese, Thai, and Vietnamese companies displaying the strongest desire. However, businesses in Hong Kong, Malaysia, and Singapore showed more hesitation. Most companies (4 in 5) value having a cross-border digital trade platform for their international expansion.
- Challenges: Some challenges hindering businesses from expanding overseas include difficulties in finding the right partners, a lack of in-house talent, and insufficient support regarding legal and regulatory compliance and tax matters. Many companies cited the need for more support, including connecting with overseas partners or clients and tax incentives.
- Target Markets: The top two markets businesses want to expand to are ASEAN and China, with only 1 in 4 companies interested in expanding beyond Asia. Within ASEAN, Singapore is seen as the most important country for business ventures, followed by Thailand and Malaysia.
- Supply Chain Concerns: Around 60 per cent of SMEs reported that their supply chains have been affected by ongoing geopolitical tensions. Global inflation and challenges in procuring suppliers were also highlighted as issues. Around 3 in 10 SMEs are seeking to diversify their supply chains, build stronger supplier relationships, and leverage data analytics for decision-making.
- Sustainability Practices: While around 90 per cent of businesses believe sustainability is important, only 45 per cent have implemented sustainability practices. SMEs in Thailand and Vietnam showed higher adoption rates (more than 50 per cent), while Singaporean SMEs lagged behind at 38 per cent. Concerns about increased costs to customers and impacts on profits and revenue were cited as barriers to implementing sustainability practices.
To address these challenges, UOB, a leading bank in Southeast Asia, aims to support companies in their transition to sustainability and provide access to sustainable financing options. The bank offers tools like the Sustainability Compass to help companies overcome barriers and kickstart their sustainability journeys.
The UOB Business Outlook Study 2023 aims to understand the business outlook and expectations among SMEs and large enterprises in ASEAN and Greater China. It has been conducted annually in Singapore since 2020 and was expanded this year to include the ASEAN and Greater China markets.