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Malaysian businesses have better growth prospects than regional peers in the next two years despite current challenges as global economies are plagued by the Covid-19 pandemic.
A global survey by HSBC Bank Malaysia Bhd titled “Navigator: Now, Next And How” revealed that 16% of the 200 Malaysian businesses surveyed expect to return to pre-Covid levels of profitability by the end of this year, while 76% of businesses expect it to take place by the end of 2022.
“It reinforces the point that Malaysian businesses are expecting to bounce back quickly, and the degree of resilience is quite surprising.
“It paints a positive picture in Malaysian businesses compared to what we see in other Asian countries,” said HSBC Malaysia CEO Stuart Milne during a virtual media briefing of the report yesterday.
The top three drivers for business growth recognised are increased domestic demand, expansion to new digital platforms and introduction of new products and services.
Some 74% of companies are projecting growth over the next year, which is above the average for Asia Pacific (60%).
Malaysian businesses are also keen on increasing investment in their business to propel growth as 78% of the companies surveyed intend to do it in the next year despite the challenging environment.
This is higher than the global rate where only 67% of businesses are inclined on increasing investment.
Local companies are planning to invest in technologies that help target consumers, improve customer experience and promote collaboration.
The report also highlighted that Malaysian companies view innovation and collaboration as the “top two facets” of a successful business in the long run. The companies believe that transforming themselves to be more entrepreneurial will make them more customer-centric and competitive with a greeted focus on people.
Meanwhile, 80% of companies expect their international trade prospects for the next two years to be positive as they are confident about the benefits and opportunities of international trade.
“Overall, a slightly higher proportion than globally, (local businesses) have a positive outlook for the next one to two years. This is in spite of eight in 10 businesses feeling that international trade has become more difficult, and over half (56%) expecting the trend to continue in 2021.
“Protectionism continues to be strongly felt, and selling through digital channels is seen by Malaysian companies as the key strategy for combating it,” said the report.
Almost all local businesses have concerns regarding their supply chain with key issues being supply chain instability. As a result of their growing concerns, 99% of Malaysian businesses surveyed have made adjustments to their supply chain.
A wider use of digital technology and diversification on working with more suppliers have been the most popular changes made by the companies.
“Malaysian companies have also become more interested in selecting suppliers for their sustainability practices than the global average (34% compared to 24% globally).”
Sustainability is also an increasing trend among the companies as 99% recognise business opportunities in becoming more sustainable, while 97% of them expect their sales to grow from a greater focus on sustainability. This is higher than the global percentage of 86%.
HSBC country head of commercial banking Andrew Sill said the bank’s small and medium enterprises customers have shown “a great deal” of resilience in dealing with the current economic environment.
He noted that Malaysian businesses have been extremely nimble during the pandemic, and they are likely to adapt to changes and take advantage of opportunities that may arise.
“Malaysian companies have perhaps learned lessons in previous trying economic times during the Asian financial crisis and others. That means they really understand how to deal with different economic circumstances such as looking after balance sheets and managing supply chains,” he said yesterday.
Source: https://themalaysianreserve.com/2020/12/02/local-businesses-positive-on-growth-in-next-2-years/