CPA Australia’s latest Asia-Pacific Small Business Survey shows Vietnamese small businesses’ swift recovery from the COVID-19 pandemic helped pave the way for growth last year. This momentum is expected to continue, with 83% of Vietnamese respondents expecting their business to grow.

Nine out of 10 small businesses surveyed in Vietnam also expect the local economy to grow in 2023. This was the strongest result of the 11 markets surveyed. Vietnam also topped the list for small businesses growth in 2022 (78%).

The COVID-19 pandemic was the most detrimental factor for Vietnamese small businesses last year but its impact had lessened. Fewer than one-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-19 has enabled them to rebound rapidly,” said Can Van Luc, Chair of CPA Australia’s North Vietnam Advisory Committee. 

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

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

Financing demand has eased in Vietnam last year. Half of the respondents found accessing external finance easy, but their need to borrow also 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 last year. Soaring interest rates are impacting small businesses’ intentions to seek external finance. It’s a sign that small businesses are increasingly cautious about financing costs. Tightening financial conditions across international markets also impact the appetite to borrow,” Luc said. 

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

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

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

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

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

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

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 Southeast Asia./.VNA