Hanoi (VNS/VNA) - Vietnamese small business ownersoverwhelmingly expect to grow in 2023, with a new survey showing they are themost confident in their local economy across the surveyed markets in the Asia-Pacific. 

CPA Australia’s latest Asia-Pacific Small Business Survey showsVietnamese small businesses’ swift recovery from the COVID-19 pandemic helpedpave the way for growth last year. This momentum is expected to continue, with83% of Vietnamese respondents expecting their business to grow.

Nine out of 10 small businesses surveyed in Vietnam alsoexpect the local economy to grow in 2023. This was the strongest result of the11 markets surveyed. Vietnam also topped the list for small businessesgrowth in 2022 (78%).

The COVID-19 pandemic was the most detrimental factor forVietnamese small businesses last year but its impact had lessened. Fewer thanone-third (32%) reported that COVID-19 negatively impacted their business in 2022.This is down from 78% in 2021.

“The Government’s support to small businesses to overcome COVID-19has enabled them to rebound rapidly,” said Can Van Luc, Chair of CPAAustralia’s North Vietnam Advisory Committee. 

“Vietnam reopened its borders in the first quarter of 2022,boosting foreign investment, international trade and tourism. The country’sdigital economy boomed as businesses moved more online in response to COVID-19.This has significantly contributed to solidifying Vietnam’s economicdevelopment."

The country’s institutional reforms and implementation of freetrade agreements might further boost confidence, Luc said. 

Financing demand has eased in Vietnam last year. Half of therespondents found accessing external finance easy, but their need to borrowalso dropped. 47% sought external funds last year, decreasing sharply from 79%in 2021. Six in 10 have plans to seek external funds this year.

“The majority of small businesses relied on banks for finance lastyear. Soaring interest rates are impacting small businesses’ intentions to seekexternal finance. It’s a sign that small businesses are increasingly cautiousabout financing costs. Tightening financial conditions across internationalmarkets also impact the appetite to borrow,” Luc said. 

According to the survey, e-commerce maintained steady growth lastyear, with 75% saying that they received more than 10% of revenue from onlinesales.

However, the percentage of businesses reporting that theirtechnology investment was profitable slumped to 51% in 2022, from 82% in 2021.Their focus on innovation remains strong with nine in10 having plans tointroduce new products or services this year.

Of the 11 markets surveyed, Vietnam had the highest percentage ofsmall business owners aged between 30 to 49. Nine in 10 small businesses hadbeen established for less than 11 years.

“This is an interesting characteristic of Vietnamese smallbusinesses. It implies that Vietnamese small business owners are likely moredigitally sophisticated than their peers in the region. They are not onlytech-savvy and embrace innovation, but also have solid working experience toexpand their businesses, Luc noted. 

He added a booming economy and an increase in foreigninvestment into Vietnam may be prompting mature employees at management levelto launch businesses. Their experience may help ensure a higher success rate.

Small businesses have experienced strong growth in digitaltransformation and technology adoption over the past three years driven by thepandemic. However, they should seek advice from professional advisers toimprove the profitability of their technology investments, Luc suggested. 

CPA Australia is one of the largest professional accounting bodiesin the world, with more than 170,000 members in over 100 countries and regions,including more than 21,000 members in Southeast Asia./.