ASEAN small businesses count on technology to beat Covid-19
Small businesses across ASEAN are counting on technology to help them overcome the impact of the Covid-19 pandemic on their operations, says UOB in a press release.
Technology was ranked the top investment priority for 2020 by two in three (64%) small businesses, including those who currently have cash flow concerns. This is according to a recent survey of 1,000 ASEAN small businesses conducted by United Overseas Bank (UOB), Accenture and Dun & Bradstreet. The research sought to understand how the small firms were adapting to the business environment given the changes brought on by the pandemic.
Across ASEAN, Thailand had the highest proportion (71%) of respondents prioritising technology investments in 2020, followed by Indonesia (65%), Vietnam (63%), Singapore (60%) and Malaysia (59%).
The survey also found that small businesses across ASEAN are persevering in their efforts to invest in technology even when faced with the prospect of declining revenue. Although close to nine in 10 (88%) of these businesses have lowered their revenue expectations in 2020, almost half of them (44%) still plan to increase their overall technology budget. This suggests that ASEAN small businesses are looking beyond the present challenges and are set on adopting technology to improve their competitiveness and sustainability.
Lawrence Loh, Head of Group Business Banking, UOB, said: “The unprecedented economic, business and social impact of the Covid-19 outbreak has underscored the importance of technology for many small businesses across the region. Having had to cope with the disruption to their operations as a result of Covid-19, many of these firms realised quickly that technology can make all the difference to their business. Whether in revising their business models or even transforming their operations, small businesses are responding to the changes brought about by the pandemic by turning to technology to ensure their long-term viability and competitiveness.”
By industry sector, small businesses from the food and beverage (F&B), information and communications technology and healthcare sectors (50%) indicated the strongest desire to boost their technology investments, followed by those in construction (48%) and retail trade (46%).
“We at UOB have been keeping close to our small business customers to help them navigate the challenges in these difficult times. Apart from supporting their financial needs, we help them identify and implement digital solutions that enable them to manage their operations effectively and virtually. For example, for Singaporean small businesses in sectors which have been affected more severely, such as F&B, we have been helping them shape their predominantly physical business in response to consumers shifting more of their purchases online. Through our collaboration with Google, we have also made it easier for such firms to register for digital tools such as Google My Business and to set up strong online profiles to attract more customers,” said Loh.
Beyond technology, ASEAN small businesses are looking to invest in developing their employees’ skills (51%) and in machinery or equipment (40%). Their lowest investment priority is in motor vehicles (18%).
As small businesses across ASEAN embrace technology as a means of ensuring a more sustainable business model for the long term, they recognise that technology can also help them better manage their cash flow. Eight in 10 (81%) small businesses across the region ranked the use of digital solutions as their most preferred cash flow management method. For instance, digital solutions such as UOB BizSmart enable small businesses to issue electronic invoices to manage their account receivables more promptly.