Small business confidence high as Vietnam expects robust economic growth
Small business confidence high as Vietnam expects robust economic growth
Small businesses in Vietnam are confident of a positive 2024, with 86 per cent projecting they will grow on the back of robust economic growth, improving on the previous two years, CPA Australia’s annual survey shows.
Seventy-seven per cent of local small business grew in 2023, well above the survey average of 60 per cent, and outperforming all but two of the 11 markets included in the Asia-Pacific Small Business Survey.
Chair of CPA Australia’s South Vietnam Advisory Committee Nam Nguyen said, “With small business confidence in Vietnam’s economy the highest of the markets surveyed, it’s not surprising that almost nine in ten local small businesses expect to grow this year. It's not only a robust economy that’s supporting local small businesses to be successful. Many Vietnamese small businesses have characteristics strongly associated with high growth businesses, including high levels of technology uptake, a focus on improving business management and strategy, and innovation. Given this, we may see some Vietnamese small businesses evolve into large, global entities in the next few years, if provided access to funding to support such growth.”
Another factor that is contributing to the success of Vietnam’s small businesses is they have, on average, the youngest owners or CEOs, with 65 per cent under 40 compared to the survey average of 43 per cent. The data reveals that younger business owners or CEOs are more likely to be running businesses that are growing, investing in technology, and innovating.
Vietnamese small businesses were the most likely to devote time and resources to ESG-related activities, including diversity and inclusion policies, staff health and safety policies, and community volunteering programmes.
Vietnam’s small businesses are the second most likely to innovate this year, with 44 per cent stating they will introduce a new product, process, or service to the market or the world in 2024. However, access to finance became less easy, with 27 per cent finding access to finance easy in 2023, down from 50 per cent in 2022.
“The focus on innovation should support long-term growth and improve the competitiveness of Vietnam’s small businesses, but there must be a concerted effort to improve access to finance, with a significant drop in the number of businesses that found sourcing funding easy in 2023,” Nam said.
Vietnam’s small businesses lead the region in generating a quick return on their technology investment, with 76 per cent saying their technology investment in 2023 improved their profitability, up significantly from 51 per cent in 2022.This is reflected in the strong returns from online sales, with 77 per cent of small businesses receiving more than 10 per cent of their revenue from e-commerce in 2023, the highest on record for Vietnam. Social media usage has also seen a marked improvement, with only six per cent not using such platforms for business purposes, compared to 26 per cent in 2022.
While most local small businesses reviewed their cybersecurity in the past six months, there is scope for an even greater focus on cybersecurity. Sixty-four per cent of Vietnam’s small businesses lost time and/or money due to a cyber incident in 2023, and 70 per cent anticipate further cyberattacks this year.
“Small businesses must take proactive measures to safeguard against major damage from cyberthreats as they can seriously affect the bottom line, customer trust, and staff morale. It’s positive the government has announced its national cybersecurity strategy. This strategy includes several major measures that are designed to keep Vietnam in the top 30 global cybersecurity rankings. For small businesses, they should focus on steps the government is taking to create a safe and trustworthy cyberspace and combat cybercrime,” said Nam.
