Vietnam is one of the fastest-growing markets in the world. Even now, it retains major potential for growth. Amid a climbing e-commerce value, Vietnam has proven itself a prime location for small and medium enterprises (SMEs); especially start-ups that are focused on technology.
The ASEAN SME Transformation Study was conducted by the United Overseas Bank in Singapore at the end of 2018. It surveyed 1,235 SMEs in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
The study revealed Vietnamese SME’s appreciation for the critical role that technology plays in growing their businesses in a sustainable, competitive way. Software, such as mobile applications, are a primary interest among investors. These SMEs also understand the value and support that these technologies can provide to consumers, thus garnering satisfaction and loyalty. Two of three SMEs predicted their revenue would grow in 2019, and one in three SMEs anticipate that it will increase by double digits.
While it is important that SMEs focus on technology investments, the study concluded that there is another element to consider: tailoring their business to participate in regional and global production value chains.
The Vietnamese government understands that there are still several challenges that must be overcome before the nation can reach its true potential. These include upgrading production capacity and restructuring the economy towards industrialisation. Unlike other Asian countries, Vietnam participates in the assembling stage, the lowest part of the value chain and labour costs are currently increasing, a factor that will hold the country back.
The government has already begun taking steps to address these issues.
According to a draft plan submitted by the Ministry of Planning and Investment (MPI) in 2018, a support programme will be piloted over the 10-year period between 2020-2030. This initiative will focus directly on ways in which SMEs can be integrated into global value chains and foster links between businesses, demonstrating the state’s commitment to sustainable growth.