Majority of businesses plan to expand in Asean: Survey
Survey by The Business Times and Standard Chartered Bank on businesses' expansion plans
Four out of five businesses surveyed recently have plans to expand in Asean in the next three to five years, with Indonesia being the top destination.
Their expansion plans are motivated mainly by the growing domestic demand of the regional countries and requests from their customers, according to an online survey done by The Business Times and Standard Chartered Bank.
"Tapping into the region's growing wealth appears to be a primary motivation for our respondents' investments into the region," said Mr Edward Lee, chief economist for Asean and South Asia at Standard Chartered Bank.
"This is interesting when placed against the context of global exporters from North-east Asia that tend to focus on operational considerations."
Mr Lee also said it is no surprise that Indonesia tops the list as it accounts for about 40 per cent of Asean's gross domestic product and has strong growth potential.
He presented the findings yesterday at the 2018 Business Times Leaders' Forum, an annual event.
The survey, done between Mar 19 and Apr 22 this year, polled 129 business leaders and owners across industries.
Most who responded were small and medium enterprises. About 43 per cent said their annual revenue was below $10 million, 17 per cent record sales between $10 million and $50 million while 7 per cent have revenues ranging from $50 million to $99 million.
Among the larger companies, 16 per cent have a turnover that exceeds $1 billion; 7 per cent said their annual sales come in between $500 million and $999 million, and 9 per cent see sales of between $100 million and $499 million.
Almost all the respondents (92 per cent) have a presence in Singapore, followed by Malaysia, with 54 per cent having a presence there. Next comes Indonesia (48 per cent), Thailand (40 per cent), Vietnam (37 per cent) and the Philippines (30 per cent).
Mr Lee said: "Interestingly, only around 50 per cent of respondents have some presence in Asean outside of Singapore.
"There is clearly scope for expansion in the region."
Among those keen to expand in Asean, 34 per cent ranked Indonesia as their top priority in the next 12 months. Other popular countries were Malaysia (22 per cent) and Vietnam (22 per cent). Some respondents also said they are eyeing emerging markets such as Myanmar and Cambodia.
Among the 20 per cent with no plans to expand in the next three to five years, their two top reasons are the lure of other markets and manpower constraints.