This focus on technology was partially in response to the pandemic, with Vietnam’s small businesses being the most likely to increase their emphasise on online sales and up their investment in technology in reaction to COVID-19. This change saw the percentage that earned more than 10 per cent of their revenue online jump from 60 per cent in 2020 to 73 per cent in 2021.
Despite a challenging 2021, Vietnam’s small businesses expect to strongly rebound this year. Seven in ten expect to grow this year, the third highest result in the Asia-Pacific. Strong investment in technology and government support are likely to be key drivers of this turnaround.
CPA Australia’s 13th Asia-Pacific Small Business Survey surveyed 4,252 small business owners or managers, including 309 from Vietnam, across 11 Asia-Pacific markets to understand their business conditions and confidence.
Of the markets surveyed, Vietnam was most adversely impacted by the pandemic, with 78 per cent of small businesses nominating it as their biggest barrier to growth last year. In response, many local small businesses invested in improving their business, with 44 per cent increasing their investment in technology and 42 per cent shifting to online sales. Both results were the highest of the markets surveyed.
Their efforts have translated into positive outcomes. Eighty-two per cent of respondents said their investment in technology last year improved their profitability. This is the highest result for the Asia Pacific; maintaining Vietnam’s leading position held since 2019.
This high level of investment in technology and online sales augers well for the future of Vietnam’s small business sector, as the survey results show the more a small business is digitalised, the more likely they are to grow.
Dr. Can Van Luc, FCPA (Aust.) – Chief Economist of BIDV & President of BIDV Research and Training Institute, Chair of North Vietnam Advisory Committee – CPA Australia said, “While 2021 was a difficult year, 45 per cent of Vietnamese small businesses still managed to grow. Under the government’s dual goals of ‘preventing the pandemic and promoting socio-economic recovery’, inflow of foreign direct investment has grown steadily over the past year (up by 9.2 per cent in 2021). Recovering domestic and overseas demand, together with government policy support, have bolstered small businesses operations and accelerated their digital transformation.”
The high levels of investment in technology has resulted in enhanced awareness of cybersecurity. Leaping from last to first place in this survey, 60 per cent of Vietnam’s small businesses stated they reviewed their cybersecurity protections in the past six months, nearly double the 32 per cent recorded in 2020. Further, 42 per cent sought professional advice from IT consultants or specialist in the past 12 months.
“Threats of cyberattacks are on the rise as small businesses digitalise. Sixty-four per cent of respondents are concerned that their business could be cyberattacked in 2022. Given that our country has increased the pace of the development of its digital economy, small businesses should keep investing in capabilities to safeguard themselves against increasing malicious cyberattacks. Measures such as enhancing cybersecurity and consulting IT consultants are crucial to protecting vital assets and customer data.
“The government’s VND 347 trillion stimulus package should support small business recovery. Given that more than nine in ten respondents expect they will or may seek external funds in 2022, the loan interest rate subsidy of two per cent per annum for two years should help to relieve their financing burden and address concerns over rising costs, thus further boosting the country’s recovery”, Dr. Luc stated.
Vietnam’s small businesses were also the most likely in the Asia-Pacific to spend time and resources on staff health and safety in the past 12 months.
Dr. Luc said, “Investing in employee health and safety reflects increasing efforts of Vietnamese small businesses to focus on Environment, Social and Governance. Creating a safe and caring workplace for employees will not only help attract and retain staff, but also drive sustainable growth.”
CPA Australia recommends that Vietnamese small businesses consider the following actions:
- Review cybersecurity measures regularly and continue to invest in enhancing cybersecurity protections
- Seek professional advice to help review business’ finances, manage costs such as material and borrowing costs, and prioritise resources
- Continue to look for ways to innovate and improve business productivity.
Read CPA Australia’s Asia-Pacific Small Business Survey 2021-22
About CPA Australia
CPA Australia is one of the largest professional accounting bodies in the world, with more than 170,000 members in over 100 countries and regions, including more than 21,000 members in South-East Asia. Our Vietnam offices, located in Hanoi and Ho Chi Minh City, opened in 2008. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
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