HSBC's latest 'Navigator: Now, next and how' report surveyed business leaders from over 9,100 companies across 35 markets globally to gauge business sentiment and growth prospects. More than 3,200 businesses in 12 Asian markets took part.
For Thailand, the research reveals that business growth in the year ahead will be driven by improvements to productivity (cited by 41% of Thai businesses) as well as better access to suppliers and raw materials (40%). Investments in technology (38%) and in logistics and transportation (38%) were also expected to bolster business growth.
In terms of international trading partners, China, Japan and the USA remain the top three markets Thai businesses will target in the next three to five years, with Singapore and Australia also growing in importance. In addition to these markets, fast-growing Thai firms are also eyeing opportunities to expand further into markets further afield such as Canada, Austria and France.
Global headwinds spark creativity and collaboration
Thai businesses trading internationally are also feeling the impact of a number of headwinds. Almost nine in 10 (88%) firms surveyed said they were affected by geopolitical uncertainty; with 35% citing a "strong impact" on their operations, compared with 25% worldwide. To navigate this uncertainty many Thai firms are getting creative: turning to online sales channels and developing new partnerships were some of the tactics employed.
Rising protectionism is also strongly and increasingly felt by Thai businesses (84%), but the majority of companies feel that they have gained more than lost because of the lower cost of doing business that increases their competitiveness. Companies are addressing the negative impact of protectionism through cost reduction, entering joint ventures with local companies and again by shifting their focus to digital sales channels.
Sustainability: essential to long-term viability
Sustainability is at the core of Thai businesses' transformation agendas, with 35% citing "essential to long-term viability" as the primary motivation for implementing sustainable practices, significantly ahead of their global (21%) and Asian (24%) peers.
This pressure to transform sustainable practices is coming from all areas – consumers (cited by 41%), governments (40%) and investors (39%) in particular.
In the next five years, the main challenges Thai businesses will face in improving their sustainability practices are a lack of knowledge (41%), a lack of support, and being unable to adopt new technologies as a result (both 36%).
The impact of Thailand's 4.0 economic model – which aims to shift low-cost manufacturing towards higher value-added activities – is also being felt. Looking ahead to the next five years, artificial intelligence (AI) and machine learning are the platforms most often cited as having a transformational impact – with 43% of Thai firms (compared to 25% of global peers) highlighting its importance. AI is expected to generate improvements in the quality of products and services, as well as boost productivity.
Krisda Phatcharoen, Head of Commercial Banking, HSBC Thailand, said: "Navigator tells us that businesses in Thailand are among the most bullish in the world, despite some external headwinds. We are seeing Thai firms adapt swiftly and creatively to the pace of global change through a number of tactics, from driving efficiencies to expanding digital sales channels and developing new partnerships.
"And high-growth businesses have something in common – they are embracing sustainability and prioritising technological transformation to drive greater productivity in the years ahead."
About HSBC Navigator Thailand
The HSBC Navigator survey, which is the largest of its kind, is conducted on behalf of HSBC by Kantar. The study gauges sentiment and expectations of businesses in the near to mid-term future on topics including: business outlook, international trade, geopolitics, sustainability, technology and wellbeing. It is compiled from responses by decision-makers at 9,131 businesses – from small and mid-market to large corporations – across a broad range of industry sectors in 35 markets. Sample sizes for each market were chosen to ensure the statistical accuracy of results, with 201 businesses surveyed in Thailand. Global results are based on an average of the 35 markets (using weights based on each market's share of world trade). The survey was conducted between August and September 2019. Interviewees were polled on a range of questions including expectations around future growth in trade, attitudes toward trade policy developments and strategic business plans. The survey represents a timely source of information on the fast-evolving international business environment. The country and global reports can be accessed here: www.business.hsbc.com/trade-navigator
Interviews for the Navigator: Now, next and how survey were conducted in Argentina, Australia, Bangladesh, Belgium, Brazil, Canada, Egypt, France, Germany, Greece, Hong Kong, India, Indonesia, Ireland, Italy, Japan, mainland China, Malaysia, Mexico, the Netherlands, Poland, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand, Turkey, the UAE, the UK, the USA and Vietnam. Over 5,000 of the companies interviewed were SMEs making annual sales of between US$5m and US$50m, with the remainder being larger enterprises.
About HSBC
- HSBC Thailand
HSBC was established as the first commercial bank in Thailand in 1888. HSBC provides a full range of financial services including global, commercial and institutional banking, global markets, securities services, trade and supply chain, liquidity and cash management services to corporate customers.
- HSBC Holdings plc
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide across 66 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,782bn at 30 September 2019, HSBC is one of the world's largest banking and financial services organisations.