Taiwan SMEs achieved highest growth since 2018, outlook for 2025 less certain

Business growth among Taiwan’s small businesses in 2024 reached its highest level since 2018. However, optimism is expected to soften in 2025, according to the latest Asia-Pacific (APAC) Small Business Survey 2024-25, conducted by global professional accounting body CPA Australia.

The annual survey collected views from 4,236 small businesses in 11 markets across the APAC region (including Singapore, Mainland China and Australia) to understand their business performance and outlook. The survey included 310 respondents from Taiwan.

In 2024, 57 per cent of Taiwan’s respondents reported business growth, up from 51 per cent in 2023. Reflecting this positive trend, nearly a third (31 per cent) increase their headcount last year, while 40 per cent expect to hire new staff this year.

However, business confidence softened for 2025, with 52 per cent of local small businesses expecting growth. This decline mirrored in small business confidence in Taiwan’s economy, with only half of the small businesses surveyed expecting the economy to grow this year, down from 58 per cent in 2024. 

Mr Elic Lam FCPA (Aust.), Honorary Taiwan Adviser at CPA Australia, said: “2024 was a positive year for most Taiwan’s SMEs, as they fully recovered from the pandemic. However, this year, they are facing various challenges, including rising costs, increased competition and geopolitical instability. As a result, many SMEs are adopting a more defensive approach.” 

He said many of Taiwan’s SMEs valued customer loyalty and cost control as major factors having a positive influence on their business in 2024. 

“Given many see rising costs and increased competition as barriers to their growth, these defensive strategies are understandable,” Mr Lam said. “Concerns with increasing competition are also driving increasing numbers of local businesses to focus on entering new markets.

“Trade is a pillar industry for Taiwan’s economy. Entering new markets is one way to address US tariffs. It’s therefore encouraging to see some SMEs are already exploring other markets.

“Any shock to global trade conditions presents a wide range of consequences and challenges for businesses to overcome. During periods of instability and uncertainty, planning, flexibility and professional guidance become essential. Seeking professional support from trusted advisors is critical to inform business how to adapt to the sudden shock and exploit any opportunities.”

Though technology adoption among Taiwan’s small business improved last year, they still lag their regional counterparts in many key indicators.

E-commerce is growing, with 70 per cent of Taiwan’s small businesses generating at least 10 per cent of their revenue online, up from 59 per cent in 2023, but lower than the 80 per cent of Hong Kong’s small businesses. 

Similarly, 73 per cent of Taiwan’s small businesses generated at least 10 per cent of their sales through digital payment methods such as LINEpay, Apple Pay and JKOPay, up from 58 per cent in 2023, but the third-lowest result among surveyed markets. Despite being a developed economy, last year, 60 per cent of small businesses received half of their sales in cash, suggesting many business-to-business transactions are still conducted in cash. 

“To stay competitive, SMEs should increase their investment in e-commerce channels and digital payment methods to broaden their customer base, find alternate income sources and adapt to changes in customer behaviour,” Mr Lam said. 

“As Taiwan’s small businesses increase their investment in technology, they must also increase their focus on cybersecurity. Last year, 59 per cent reported lost time or money due to a cyber-attack, well above the APAC average of 40 per cent. 

“With only 49 per cent of small businesses reviewing their cybersecurity protections in the past six months, it is crucial for many more small businesses to implement robust cybersecurity measures to protect their operations.”

Many of Taiwan’s small businesses are experiencing difficult financing conditions. In 2024, 72 per cent of Taiwan’s small businesses required external financing. However, over half found it difficult to access funds, up from 29 per cent in 2023. These difficult financing conditions are expected to continue this year.

“Small businesses needing external finance are encouraged to reach out to their preferred lender as soon as possible. This will give you extra time to find the finance you need at the best possible rate, whether it is from your current lender or an alternative. The extra time may also be helpful if you need to adjust your business plans in response to such difficulties,” concluded Mr Lam. 

Media contacts

Carmen Pan
+852 5318 9655 / 2202 2722
[email protected]  

Margaret Lam
+852 9770 5287 / 2202 2770
[email protected]