Up to 87% of businesses in Vietnam plan to invest more inside ASEAN, while 69% of them plan to do so outside the 10-nation bloc, according to an HSBC survey of financial decision-makers in the region’s six biggest economies.
Businesses are planning to invest in entering new ASEAN markets (69%); technology and digitalization (60%); sustainability (56%); new business lines (49%); and supply chain resilience (44%), the “ASEAN Business Sentiment” survey finds.
Local technological capabilities and supply chain challenges are the top barriers for businesses in Vietnam looking to expand into new ASEAN markets. Other hurdles include supply chain challenges, competition, lack of market information, and understanding local regulations.
Product development ranks as the top priority for Vietnam businesses, ahead of growing in ASEAN. The surveyed companies also prioritize improving customer services, diversifying supply chain, and digitization of operations.
The survey also finds that in almost all ASEAN markets, over half of the respondents surveyed express their interest in expanding into Vietnam as a new market.
Confidence runs high on growing business across ASEAN markets. Up to 98% of Vietnam-based respondents express confidence about growing their business in the country.
Some 94% of the respondents in Vietnam expect their intra-ASEAN trade to increase in 2024, with 27% of them expecting an increase of more than 30%.
The survey gathered 600 responses from companies with annual revenues of at least $150 million, split equally across the six biggest ASEAN economies: Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.
EuroCham Vietnam said in a January survey that Vietnam's investment hotspot status increased significantly in the last quarter of 2023. An impressive 62% of those surveyed ranked Vietnam among their top 10 global investment destinations, with 17% placing it at the very top.
This strong endorsement is matched by 53% of respondents anticipating increased foreign direct investment in Vietnam by the end of Q4.
The survey also highlights Vietnam's strategic position in the ASEAN region. While only a small fraction (2%) consider it an 'industry leader', a noteworthy 29% rank it among the “top competitive countries” in ASEAN. The majority (45%) view Vietnam as a competitor, albeit acknowledging certain challenges. This perspective emphasizes Vietnam's growing influence and potential for further advancement within the ASEAN economic landscape.