South-east Asia still the top choice for business expansion: SBF poll

SOUTH-EAST Asia remains the top choice for future expansion, according to the Singapore Business Federation's (SBF) annual National Business Survey 20/21 released on Tuesday, with 76 per cent of 436 businesses keen to expand within Asean.

That being said, only 27 per cent of the respondents said they see themselves expanding overseas in the next six to 12 months.

Vietnam, Indonesia and China topped the list, with more than 30 per cent of the businesses polled interested to venture into these countries.

The results are largely similar to that of 2019, when Vietnam, China, Malaysia and Indonesia topped the list that year.

Of the 780 businesses that are engaged in overseas activity, 84 per cent are active in South-east Asia, with 65 per cent involved with business activity in Malaysia, and more than half in China and Indonesia.

According to the survey which was conducted in October and November, and involved 1,075 businesses, overseas business expansion contracted by 7 per cent in 2020, with seven in 10 businesses reporting a presence in at least one overseas business market. This compares with 80 per cent of companies reporting a presence in at least one overseas business market in 2019.

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The pandemic had resulted in many companies facing difficulties in overseas businesses, with the hardest hit countries being Malaysia, Indonesia and China.

Nearly half of respondents said overseas business activities had fallen, with nearly all attributing this to Covid-19. Two-thirds felt that outbound business travel is important for effective operations.

Travel restrictions due to Covid-19 were the third most-cited business challenge, named by 44 per cent of respondents.

The top challenge was demand uncertainty due to Covid-19, cited by three-fifths of respondents, and manpower costs, cited by over half.

READ MORE: Three in 10 firms lack confidence in sustaining business this year: SBF poll