Here’s what sets profitable APAC SMEs apart

The CPA Australia Asia Pacific Small Business Survey 2025–26 again shows that digital transformation by small and medium enterprises (SMEs) is a key differentiator between high growth and low growth firms, making it a critical marker of competitiveness across the region.

CPA Australia’s research found high growth SMEs are consistently more likely to invest in technology, sell online, embrace digital payment technologies and use social media for customer insights, competitor monitoring and recruitment, rather than visibility alone.

Furthermore, markets with greater numbers of younger business owners, stronger digital uptake and more active investment in AI and cloud tools are achieving the most consistent profitability improvements.

Digital divide deepens as Asian SMEs turn tech into tangible returns

Technology investment continues to deliver measurable returns in some countries, but not in others.

Vietnam led the region in 2025, with 76 per cent of SMEs reporting that their technology investments improved profitability. Indonesia and India followed closely, with more than 65 per cent of businesses in each market reporting profitability gains.

By contrast, only 29 per cent of Australian SMEs and 26 per cent of New Zealand SMEs saw any profitability improvement from technology investment. According to the survey, this may reflect differences in the technologies adopted — Australian and New Zealand SMEs tend to focus on computer hardware, while high-growth businesses are more likely to invest in AI and other new technologies.

Online sales are another defining factor for SMEs. Vietnam also leads the region in online sales penetration, with China and India close behind. Australia and New Zealand ranked as the least likely to generate online sales.

“Younger startups in Vietnam are heavily invested in technology,” says Phi Nguyen FCPA, a director and founder at outsourcing firm VietOS. 

“They leverage artificial intelligence and other technologies instead of relying only on labour, because at the end of the day, it gives them greater productivity.”

How AI is transforming SMEs across APAC

The regional technology divergence is being amplified by small business AI adoption as more SMEs move from basic digital tools to AI systems that can reshape operations, customer engagement and productivity.

In Mainland China, for example, 48 per cent of SMEs invested in AI in 2025, followed by Hong Kong at 39.8 per cent and Vietnam at 41.4 per cent. Australia sat at the opposite end where AI uptake remains comparatively low, with accounting software and computer equipment being the top investments.

Hong Kong-based business adviser Davy Leung FCPA, who is also deputy chair of CPA Australia’s SME and Entrepreneurship Committee of Hong Kong, points to the growing use of AI by SMEs in his region, including by one-person businesses or sole-person companies. The rise of AI adoption has helped contribute to a steady increase in this type of venture. 

He cites a client running a solo business in meditation and emotional health, who previously generated most of her business from direct appointments.

“As the bookkeeper for her business, I could see that over the past three to five years her annual sales were around HK$400,000–600,000 (A$74,000–111,000),” Leung says. 

“Then last year she asked me what she could do with AI. She kept seeing posts on Facebook and Instagram about using AI to automate a business and earn money ‘while sleeping’.

“She applied for government funding, upgraded her computer and hired a service provider to improve her website, spending about HK$100,000 (A$18,500) in total. By the beginning of 2026, her sales had risen to HK$6 million (A$1.1 million), which is roughly a tenfold increase.”

Now she spends only two to three hours a day managing the online platform and no longer needs to reply to customers manually, because AI handles most of it electronically.

What is limiting AI uptake for SMEs?

For many SMEs, the effort required to adopt and integrate new technologies can be a significant deterrent, which helps explain how small businesses fail to adapt to digital transformation when time, confidence and capability are stretched.  

Alexi Boyd, founder of advisory practice Small Biz Matters, says the divide between technology adopters and non-adopters is often the result of business owners being too busy and fearful of change.

“I think change management has always been something that SMEs, particularly at the smaller end — for example, sole traders — have struggled with,” she says.

“The issue is that many SME owners will look at something that could potentially save them time and money and make them more efficient, and say, ‘I do not know how long this is going to take me to learn myself, then teach my staff’.”

Boyd says the burden of regulation directly impacts how likely SMEs are to adopt AI or further digitisation.

“This is where overregulation rears its ugly head — when it comes to the impact of regulation on digitisation. If small businesses are drowning in regulation and the burden of reporting, which right now seems to be never-ending, they do not have the opportunity to spend time away from their business to implement something new.”

 

"[My client] applied for government funding, upgraded her computer and hired a service provider to improve her website, spending about HK$100,000 (A$18,500) in total. By the beginning of 2026, her sales had risen to HK$6 million (A$1.1 million), which is roughly a tenfold increase."

 

Another area of technology concern for SMEs is cybersecurity, but, ironically, that is linked to increased use of technologies rather than non-adoption.

“Businesses tend to invest in things that bring in more money and higher profit margins, but not as much in cybersecurity,” Nguyen says.

“They often only start investing in cybersecurity after they have had a breach. Sometimes they get breached more than once, so it is not always a one-off investment that fully secures their network.”

Vietnam again stands out in the survey results, with almost 70 per cent of SMEs conducting recent cybersecurity reviews — the highest in APAC. Australia and New Zealand sat at the lower end, with review rates of 45 per cent and 39.5 per cent respectively.

Trends for small business strategy

Across Asia, high growth firms are pairing AI tools with expert advice to improve decision making, streamline operations and enhance customer engagement. This combination of technology investment and advisory support is proving especially powerful, helping firms accelerate returns and avoid common implementation pitfalls.

SMEs that invest in technology, build digital sales capability and draw on professional advice are moving ahead of those that do not.

CPA Australia’s research found high growth SMEs are far more likely to seek professional advice, with 38.3 per cent consulting IT specialists and 38.2 per cent engaging business or management consultants. Only 2.1 per cent of high growth firms avoided external advice altogether.

 

"The issue is that many SME owners will look at something that could potentially save them time and money and make them more efficient, and say, ‘I do not know how long this is going to take me to learn myself, then teach my staff’."

 

The survey also highlights the rise of AI as a source of advice, reflecting a shift towards more data driven decision making.

Leung delivers AI workshops to a range of businesses in Hong Kong and China, including accounting firms, where he shows accountants and auditors how they can use AI to speed up their daily work.

“They love it, because tasks that once took a week for one firm can now take only hours,” he says. “If one firm adopts AI and another doesn’t, the difference in speed becomes significant.”

As AI adoption accelerates and digital commerce becomes more deeply embedded in business models, clients are likely to look to accountants not just for compliance, but for strategic guidance.

 

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