Asean firms to allocate 81% of investments within Asia, move supply chains to region: BT survey
Firms focus on Asean, home markets and China but more cautious about US, EU
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[SINGAPORE] Companies in South-east Asia plan to allocate 81 per cent of capital expenditure in the intra-Asia region over the next three years, with business leaders viewing these markets with more optimism.
All respondents polled in The Business Times Insights: Asean Intelligence 2026 survey said they plan to allocate new capital within the intra-Asia region. They were overwhelmingly focused on Asean (90 per cent), followed by their domestic market (77 per cent), and China (64 per cent).
More than 500 business leaders in the Asean-6 economies – Singapore, Malaysia, Indonesia, Thailand, the Philippines and Vietnam – participated in the survey commissioned by BT and conducted by market research firm Kantar.
Respondents were notably more cautious about the US and EU markets. Only 31 per cent said they were considering investments in the US, and 24 per cent in the EU.
Across Asean, automation and artificial intelligence ranked as the top investment priority (48 per cent), followed by market expansion (44 per cent), and IT and cybersecurity (42 per cent).
DBS chief economist Taimur Baig and senior economist Chua Han Teng, noted that Asean is “becoming a critical player” in the AI hardware ecosystem.
The region, they added, “will continue to benefit from the global AI investment boom, supported by several factors including robust foreign direct investment (FDI) in data centres, a deep supplier ecosystem, and maturing chip manufacturing capabilities”.
Shifting supply chains: The Asean pull
It is not just manufacturing companies that are deepening their presence in the region.
Eight in 10 respondents – from diverse sectors including consumer and retail, healthcare, and financial services – said they were “very likely” to “somewhat likely” to shift more suppliers or production activities into the region between now and 2028.
The strongest intent was surfaced by businesses from Vietnam (95 per cent), Indonesia (92 per cent) and the Philippines (83 per cent). Singapore and Thailand exhibited more caution at 68 per cent and 67 per cent, respectively.
When choosing a location, businesses leaned into factors such as infrastructure, ease of doing business, market access and supply chain resilience.
Cost, tariffs, incentives and talent matter, but these factors were ranked lower compared the more important question of whether the market chosen can support efficient, reliable and scalable operations.
Brian Lee, an economist at Maybank Securities, said that as businesses “shift from ‘just in time’ to ‘just in case’ production patterns, supply chain resilience becomes key”.
“Firms have been diversifying, and continue to diversify production bases to multiple jurisdictions,” he added. “Asean has been a beneficiary of this shift, with Malaysia and Vietnam being leading beneficiaries.”
An early mover is Paris Baguette, the South Korean premium bakery and cafe chain, which entered South-east Asia in 2012 via Singapore.
The multinational chain, owned by South Korean conglomerate SPC Group, now has 87 stores in Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Cambodia. It will be opening in Laos in May.
In 2021, it bought two plots of land in the Johor-Singapore Special Economic Zone.
It is leveraging the extensive manufacturing operation it built in Johor to serve both the Malaysian and Singapore markets, and as a foundation for a broader regional and halal market expansion.
“Paris Baguette continues to view Asia as a core growth region, and we are committed to investing in markets where we see strong, sustainable demand. Asean is central to this strategy,” said Hana Lee, CEO of Paris Baguette AMEA.
Intra-Asean investment rose to US$31 billion in 2024 from US$22 billion the previous year, indicated the 2025 Asean Investment report published by the Asean Secretariat. Intra-region investments made up 13.9 per cent of Asean’s US$226 billion FDI last year – up from 10.9 per cent in 2023.
Berli Jucker, which runs the Big C consumer chain in Thailand, Laos and Cambodia, recently moved to acquire MM Mega Mart Vietnam for US$720 million from its parent company, TCC.
While its home market of Thailand remains core, the diversified company with interests in manufacturing and consumer retail has identified Vietnam as a key growth engine over the next three years. More broadly, the Thai business also sees opportunities in Laos and Myanmar.
“The acquisition of MM Mega Market in Vietnam reflects BJC’s long-term vision to build an integrated regional platform that connects manufacturing, supply chain, and retail across South-east Asia,” said a Berli Jucker spokesperson.
Gain deeper insights into the future of business and be better informed as you navigate what’s ahead with The Business Times Insights: Asean Intelligence
About the survey
This year, The Business Times commissioned market research firm Kantar to conduct a survey to capture the pulse of leadership across the region.
The first wave of the study, conducted in February, polled 538 business leaders in the Asean-6 economies: Singapore, Malaysia, Indonesia, Thailand, the Philippines and Vietnam.
They are from diverse industries including manufacturing, consumer and retail, healthcare, and financial services. Most of them are in C-suite or senior management roles, or are business owners.
About 65 per cent of respondents are from large enterprises, and 35 per cent from small and medium-sized enterprises.
In April, a second, more targeted wave of fieldwork was conducted to gauge the impact of the Middle East conflict on business sentiments. It polled 246 business leaders of a similar high-level profile.
“Our mission is to move beyond the surface-level narrative of regional growth,” said BT editor Chen Huifen.
“By investing in our own proprietary intelligence, we are ensuring that our readers have access to the ground-level truths that external observers might miss. It is about bringing a home-grown perspective to a global audience, and providing the spark to help leaders turn volatility into opportunity.”
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