Hong Kong – Despite the anticipated growth of small businesses in Hong Kong in 2024, the country ranked highest among surveyed markets in the Asia Pacific region in terms of expecting the threat of a cyberattack. This is according to CPA Australia’s latest Asia Pacific Small Business Survey 2023-2024.
Data from the findings found that approximately 69% of Hong Kong small business respondents indicated anticipation of growth in 2024, revealing an increase in the local economy. A significant 73% of them also expect it to grow this year.
It was also noted that respondents from Hong Kong were likely to nominate entering new markets as the factor that had the most positive impact on their business in 2023. This pioneering spirit is expected to continue this year, with 79% anticipating revenue from overseas sales to increase, compared to the survey average of 50%.
Furthermore, a significant 46% of Hong Kong respondents were also observed to have increased their number of employees last year, beating the survey average of 32%. This implies strong hiring intentions expected to continue into 2024, with 52% expecting to add to their headcount.
Interestingly, increasing costs associated with expanding into new markets and managing local operations emerged as the most significant challenge for their businesses last year, likely driving their high demand for external financing.
In particular, around 83% of the surveyed small businesses sought funds in 2023, primarily to acquire capital assets and fuel business expansion. This trend is set to continue, with 89% planning to seek external funds this year, citing covering rising expenses as the fundamental reason.
Apart from this, more than half (76%) of the respondents perceived obtaining external financing as an easy task in 2023. 74% of them expect this favourable financing condition to persist in 2024.
Around 81% of Hong Kong’s small businesses also received over 10% of their revenue from online sales last year, outstripping counterparts in other markets and up enormously from 43% in 2019. Another 86% indicated that over 10% of revenue was received through digital payment methods, a remarkable increase of over 30 percentage points compared to 2019.
On the other hand, an alarming 64% of surveyed businesses reported losing time and/or money due to cybersecurity incidents last year, with 7 out of 10 expressing concerns about potential cyberattacks in 2024. These figures were the highest among the surveyed markets in the Asia-Pacific region.
Speaking about the report, Cliff Ip, divisional president at CPA Australia 2024 in Greater China, said, “Bolstered by an improving economy and various government support programmes, ranging from an accommodating financing environment to schemes promoting digitalisation and marketing, Hong Kong small businesses made a steady recovery last year and most project a mild expansion in 2024.”
“An increasing adoption of e-commerce and digital tools enabled many small businesses in Hong Kong to capitalise overseas opportunities,” Ip said, “Besides, Hong Kong small businesses have developed a strong innovation culture in recent years, giving them a competitive advantage to promote and sell their new products and services outside Hong Kong,” he continued.
“The main purposes of financing shifted from survival in 2022 to purchase capital assets and buttress growth in 2023. This change illustrated that many resilient SMEs had overcome the economic downturn and rebounded at full speed after normalcy,” explained Cliff.
Cliff also notes, “HKSAR Government’s effort to ease the financing conditions such as the SME Financing Guarantee Scheme (“SFGS”) have made it relatively easier for eligible applicants to obtain financing from banks. In this year’s Budget, the government has further extended the application period for the 80% and 90% Guarantee Product under the SFGS. The recent measures introduced by the Hong Kong Monetary Authority also prioritise expediting applications for these products, assisting small businesses in obtaining the necessary funding for their further development. “
He also said, “Changing consumer behaviour and a series of government schemes supporting digitalisation such as Technology Voucher Programme, have undoubtedly driven this transformation. The offering of E-consumption vouchers in each of the past three years, alongside the gradual adoption of online shopping and food ordering habits, has compelled small businesses to undergo digital transformation to stay relevant and competitive in the market.”
“Threats from cyberattacks such as phishing attacks have caused direct losses. Though two-third of surveyed respondents have recently reviewed their cybersecurity protections, business owners must keep allocating resources on enhancing tools to protect data and information, providing staff training, and consult with IT experts,” concluded Cliff.
This annual survey report by CPA Australia involved views from 4,222 small businesses in 11 markets across the Asia-Pacific region, including Singapore, Mainland China, and Australia, to understand their business performance and outlook. It was also participated by 324 respondents from Hong Kong.
