Vietnam records highest rate of SMEs in SE Asia looking for expansion

The majority of firms are looking to invest in technologies and employee’s skill development during the COVID-19 pandemic.

vietnam records highest rate of smes in se asia looking for expansion hinh 0
Source: UOB, Accenture and Dun & Bradstreet

Around 52% of small and medium enterprises (SMEs) in Vietnam indicated that they would continue to invest in 2020, the highest ratio in Southeast Asia, according to findings from Singapore’s United Overseas Bank (UOB), Irish services company Accenture and US analytics firm Dun & Bradstreet.

The rate is significantly higher than the region’s average of 36%. Singapore and Thailand were at second rank with 34%.

Such insights were gained from two surveys with 1,000 SMEs conducted before and during the COVID-19 pandemic in July 2019 and May 2020 in five major countries in ASEAN of Indonesia, Malaysia, Singapore, Thailand and Vietnam.

Meanwhile, 47% of Vietnamese SMEs said they would put off their investment for the year and 2% expected no change.

vietnam records highest rate of smes in se asia looking for expansion hinh 1
Source: UOB, Accenture and Dun & Bradstreet

For a more specific look into areas of investments that Vietnamese SMEs are planning, 63% of respondents added they are looking to invest in technologies, down from 67% in the pre-COVID-19 period; and 49% in employee’s skill development, a 38% increase over the previous plan.

Firms are also refraining from investing in machinery and equipment, or land, building and furniture, with the corresponding rates at 37% and 32%, a sharp decrease from 55% and 37% before the COVID-19 pandemic, respectively.

Notably, 90% of Vietnamese firms said they expected less revenue during the COVID-19 this year, slightly higher than the regional average of 88%, with only 4% expecting the opposite.

The survey also revealed SMEs in Singapore (72%) and Vietnam (68%) were the most satisfied with the government’s relief measures, while those in Thailand (47%) and Indonesia (45%) felt that more could be done for them.

More than half (52%) of Vietnamese SMEs expressed their optimism about post COVID-19 recovery, and 22% were pessimistic.

UOB and its partners anticipate that Vietnam's GDP in 2020 will grow by 3.5% and will recover by 6.6% in 2021, returning to the growth path, somewhat like the growth rate of 6.8% seen in 2019.