Vietnam is among the top expansion destinations for ASEAN companies looking for growth opportunities in the 10-nation bloc, according to a survey commissioned by Standard Chartered for its “Borderless Business: Intra-ASEAN Corridor” report released on July 8.

According to the survey, 80% of the respondents are focusing on expanding in Singapore to capture sales and production opportunities, followed by Thailand (60%) and Vietnam (59%).

ASEAN companies are also found to be highly optimistic about intra-regional growth over the next 12 months. The majority of ASEAN companies focusing on intra-regional opportunities expect robust business growth in the region over the next 12 months, as seen in 99% of respondents expecting growth in production and 96% anticipating growth in revenue.

Access to the large and growing ASEAN consumer market (69%), access to a global market enabled by a network of Free Trade Agreements (59%) and availability of abundant and skilled workforce (49%) were among the most important drivers for expansion across the region, according to senior executives of the surveyed ASEAN companies.

In addition, with the Regional Comprehensive Economic Partnership (RCEP) expected to attract more investments into ASEAN, all respondents said that they are planning to increase their investments over the next 3-5 years.

Meanwhile, the top three risks in the region are identified as the COVID-19 pandemic or other health crises, geopolitical uncertainty and trade conflicts and the slow revival of the economy and the drop in consumer spending.

Furthermore, the respondents also agreed that adapting their business model to industry practices and conditions within ASEAN, building relationships with suppliers and adapting supply chain logistics, as well as understanding regional regulations, payment methods and infrastructure are the most significant challenges they anticipate in the next 6-12 months.

To drive resilient and rebalanced growth in ASEAN and to mitigate these risks and challenges, the surveyed executives identified entering new partnerships/joint ventures to increase market presence, driving sustainability and ESG (Environment, Social and Governance) initiatives and executing digital transformation programmes as the most important areas for their companies to focus on.

Michele Wee, CEO of Standard Chartered Vietnam, said Vietnam continues to offer appealing business and investment opportunities given its strong fundamentals – robust economic growth, a sizeable domestic market, low labour costs, an abundant workforce, free trade agreements, and strategic location.

She said as an international bank with 117 years of history in Vietnam, Standard Chartered has deep local knowledge to support internationalising companies’ cross-border growth aspiration and provide them with the right solutions that meet their financing and operational needs.