Photo by Andi Winata from Unsplash

6 in 10 businesses expect improved performance in 2024

Optimistic firms want to focus digitalisation efforts this year.

Despite rising operational costs and inflation, the overall business sentiment in Hong Kong remains optimistic, with one in five firms expressing a very positive outlook on the current business climate.

In 2024, 64% of businesses in Hong Kong expect enhanced performance, prioritising cost reduction and digitalisation efforts, UOB reported.

Nine in 10 Hong Kong companies have implemented digitalisation in at least one department, with 26% indicating that digitalisation has been implemented across the entire business. 

Meanwhile, seven of 10 businesses plan to increase digitalisation expenditure, with most increasing spend to 10%-25% in 2024. About 80% also expressed interest in utilising cross-border digital trade platforms to exploit growth opportunities in overseas markets.

In 2025-2026, nearly two-thirds anticipate revenue growth, fueled by strategies such as diversifying product offerings, enhancing customer experiences, and increasing the adoption of digital solutions to drive growth.

Approximately 80% of businesses consider overseas expansion within the next three years to enhance profitability, grow revenue, and bolster international reputation. Popular expansion sites include Mainland China (52%), Taiwan (31%), Southeast Asia (31%), Malaysia (48%), Thailand (40%), and Indonesia (36%).

However, 40% of businesses venturing abroad struggle with regulatory issues, compliance challenges, tax complexities, lack of in-house talent, and difficulties securing suitable partnerships.

Businesses also struggle with supply chain management amidst geopolitical tensions, inflation, and rising interest rates. They also face challenges in digital adoption due to high implementation costs (30%), cybersecurity concerns (29%), and a shortfall of digital skill sets (28%).

As a result, companies are seeking additional support, such as funding or grants to enter new markets, industry connections, and tax incentives to aid their growth strategies.

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