B2B payment practices trend, Asia 2023

Payment Practices Barometer

  • China,
  • Hong Kong SAR,
  • India,
  • Indonesia,
  • Japan,
  • Taiwan,
  • Vietnam,
  • Singapore
  • Agriculture,
  • Consumer Durables,
  • Food,
  • Electronics/ICT,
  • Chemicals/Pharma,
  • Automotive/Transport,
  • Textiles

70% of Asian companies polled anticipate a demand surge in the coming months, while showing a strong commitment to address payment challenges arising from business-to-business (B2B) trade.

The 2023 Payment Practices Barometer survey for Asia was conducted between the end of Q2 and the beginning of Q3 2023, and findings should therefore be viewed with this in mind.

Key takeaways from the report for Asia

Focus on credit management to enhance liquidity resilience

  • In response to economic challenges, Asian companies diversified payment options in business-to-business (B2B) trade over the past year. 49% sales were made on credit, 51% on a cash basis to avoid the risk of customer payment default. Longer payment terms were granted to B2B customers by companies who opted to sell on credit, also as a method to help customers navigate cashflow difficulties. These terms now average 60 days from invoicing across the region.

  • This policy resulted in a longer payment collection cycle, evident in a deterioration of Days-Sales-Outstanding (DSO). 53% of companies polled in Asia took notably longer to receive payment of overdue invoices. Across the region, many businesses reported an average DSO of 100 days.

Global economy uncertainties spark concern about business profitability

  • Widespread concern about the effects of a global economic downturn was expressed by companies polled in Asia. There was also anxiety reported about heightened competitive pressures for those operating in international markets, especially among businesses in China. Another major worry for Asian companies is inflation, prompted by volatile energy and commodity prices. This was a particular concern in Vietnam. Uncertainty about interest rates was a further anxiety for businesses affected by liquidity shortfalls.
  • Despite these concerns there was a positive outlook for demand in the year ahead, with 70% of companies polled anticipating a boost in sales, particularly in Singapore. More caution was expressed about profit margins, with 56% of businesses expecting an increase.

The flexible approach to credit risk management demonstrated by Asian businesses, which involves trade credit insurance for 47% of companies polled, is particularly relevant because it enables them to seize opportunities in a growing market while safeguarding against potential credit-related risks in B2B trade activities.

Their ability to integrate trade credit insurance into their risk management framework showcases their resilience and forward-thinking approach to business operations and cash flow risks mitigation

Andreas Tesch

Andreas Tesch 
Chief Market Officer of Atradius 

The Atradius Payment Practices Barometer is an annual survey of business-to-business (B2B) payment practices in markets across the world. Its findings can give valuable insights into the current dynamics of corporate payment behaviour in B2B trade. It can also help companies doing business, or planning to do so, in the markets polled to identify emerging future trends in the payment practices of B2B customers. 

Interested in finding out more?

For a comprehensive overview of the 2023 survey results in Asia, please download the full reports and the Statistical Appendix from the related documents section below.

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