Despite the ongoing economic uncertainties, small and medium-sized enterprises (SMEs) and large enterprises in the Southeast Asian and Greater China regions are eager to venture overseas in search of a boost to their profits and reputation. In particular, they have their sights set on the ASEAN region.
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The UOB Business Outlook Study 2024 (SMEs & Large Enterprises), which surveyed more than 4,000 businesses in seven key markets across the ASEAN and Greater China regions, found that more than 80 per cent of businesses want to expand overseas. This interest is most keenly felt in Indonesian and Vietnamese companies. The top two sectors looking to expand are manufacturing and engineering, as well as tech, media, and telecom.
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Overall, the study, which is into its fifth year, found that almost eight in 10 businesses are positive about the current business environment, with one in four expecting business performance to vastly improve this year. However, many businesses said they are still watchful of the impact of inflation, and higher operating costs and are recovering from the overall economic slowdown. Businesses said they plan to focus on reducing costs and adopting digital solutions to improve productivity.
Venturing overseas still key part of growth plans
Around three in five businesses highlighted ASEAN as the top market which they want to expand to within the next three years. In contrast, only one in three companies said they wanted to enter Mainland China. Within ASEAN, Malaysia is the most important country that businesses want to venture into, followed by Singapore, Thailand and Indonesia.
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However, businesses face several challenges such as:
difficulty in finding the right partners to work with (39%);
lack of in-house talent/expertise to drive overseas expansion (36%);
and inadequate financial support or funds (35%).
Most companies are seeking more support for funding or grants to enter new markets, connections to large corporations, as well as tax incentives. Around four in five companies said they are keen to use cross-border digital trade platforms for their overseas expansion.
