Digitalisation and overseas expansion are deemed as the best new strategies for medium-sized companies in Vietnam and other ASEAN member states to promote economic growth in the context of drastic market changes, Standard Chartered Bank said in its reported announced on April 22.
|Medium-sized companies should go digitalised and expand business in foreign markets to futher grow.
Titled “ASEAN – a region facing disruption: positioning mid-corporates for growth in Southeast Asia”, the report looked at the critical impacts of trade tension and digital breakout on the bloc’s medium-sized enterprises (with annual revenue ranging from 10 million-500 million USD) in production, retail sale, consumption, and infrastructure development.
The bank said that human resources, culture, technology, and capital management are key areas to support businesses towards continued growth in the face of disruption.
Low labour productivity, which lags significantly behind the world average of 65 percent, is described as ASEAN’s main internal growth challenge. Meanwhile, the main external challenges are global uncertainties that increase risks for the region, which is highly dependent on external trade. Extra-ASEAN trade accounted for 77 percent of the bloc’s total exports in 2017.
To that end, Standard Chartered Bank suggested that mid-sized companies in the region apply smart business operations, including the Internet of Things (IoT), 3D printing, and blockchain-enabled contracts to move forward.
Furthermore, fast-growing e-commerce requires corporations to channel focus on digital go-to market solutions, including those is micro-segmentation, geo-targeting, and augmented Reality, to better understand their customers.
In a bid to promote cross-border expansion, firms should deliver their products to new market segments and establish relations with foreign partners.
According to Nirukt Sapru – Standard Chartered Bank’s Chief Executive Officer of the Vietnam, ASEAN, and South Asia Cluster Markets – the Vietnamese economy is forecast to sustain its stable growth with FDI being a key catalyst for economic expansion this year.
The FDI sector is predicted to experience two-digit growth this year, he said, adding that Vietnam is an open country for trade activities, while local mid-sized companies have favourable conditions for operations.
In the last six months, Standard Chartered Bank Vietnam successfully arranged Hoan My Medical Corporation and Refrigeration Electrical Engineering Corporation (REE)’s issuance of fix-rate bonds to mobilise capital for their business plan.
He said that domestic companies should shake hands with prestigious partners and banks who can help them seek new capital sources, as well as provide them with effective solutions to capital management, and rational risk management strategies.