Southeast Asian SMEs to invest $130b in digitalization: report

Jakarta, Indonesia / Photo credit: Shutterstock

SMEs in Southeast Asia plan to deploy an additional US$130 billion to digitalize their business activities over the next three years, according to a recent white paper by TDCX.

The report suggested that these enterprises spent more than US$78 billion on digitalization initiatives in the past three years.

The Singapore-headquartered business process outsourcing firm surveyed 750 SMEs across the city-state, Malaysia, Thailand, Indonesia, and Vietnam.

Priorities for future investments are given to product and service innovation, offline-to-online transformation, and business process improvement, TDCX said.

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The ASEAN region is home to over 70 million SMEs, representing 97% of all enterprises, the report pointed out.

Due to the Covid-19 pandemic, SMEs have recognized the importance of digitalization to stay competitive, meet consumer demands, and capitalize on business opportunities in the digital economy.

SMEs in Singapore are ahead of the other surveyed countries when it comes to digital transformation. Overall, 76% of ASEAN SMEs are still in the early stages of their digitalization journey, but this situation presents a favorable opportunity for B2B tech providers.

The report also found that SMEs operating in consumer goods, retail, and F&B sectors are lagging behind in their digital transformation progress – in contrast to industries like financial services.