Nearly 39,000 businesses exit Ho Chi Minh City market amid rising pressures

HO CHI MINH CITY, Vietnam – More than 38,800 businesses exited the Ho Chi Minh City market in the first seven months of 2026, reflecting mounting pressure on companies to adapt to global uncertainty, tighter operating requirements, and structural changes, even as the city recorded nearly 34,100 newly established businesses during the period, up 22.81 percent year on year. The city recorded approximately 7,500 businesses completing dissolution procedures, a surge of 158.66 percent, while more than 31,300 temporarily suspended operations, up 10.51 percent, according to the city's January-July socioeconomic report.

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Economic expert and National Assembly deputy Tran Hoang Ngan said that businesses entering and leaving the market are a normal part of the business cycle, but authorities should pay attention to unusual signs, particularly if the number of businesses exiting consistently exceeds the number of new businesses or if established companies with long operating histories and significant contributions to the state budget are shutting down. He said the main pressure does not come from Vietnam's domestic business environment, as Vietnam is stepping up institutional reforms, cutting administrative procedures, and improving conditions for investment, but rather from uncertainty in the global economy, including fluctuations in energy and logistics costs, geopolitical conflicts, and changes in tax and trade policies in major economies that are making it harder for businesses to forecast orders, interest rates, exchange rates, and investment returns.

Companies are also entering a new competitive environment in which digital transformation, artificial intelligence, financial and tax transparency, and stronger management capabilities are increasingly required, and businesses unable to keep pace with these changes will face greater difficulties in competing. Ly Thanh Tien from Ho Chi Minh City University of Technology said the departure of nearly 39,000 businesses does not necessarily contradict signs of economic recovery but reflects an increasingly uneven recovery, with macroeconomic indicators such as economic growth, exports, and investment showing improvement while cash flow, orders, and competitive advantages are increasingly concentrated among businesses with stronger financial, technological, and management foundations.

Small and medium-sized enterprises continue to face significant cash flow pressure, with some having orders but lacking working capital because payment cycles are lengthy while input costs, taxes, and operating expenses must be paid on time, and banks are tightening risk management while suppliers demand clearer payment arrangements. According to Tien, these pressures are no longer merely short-term difficulties but increasingly reflect structural changes, as large companies raise their requirements for green standards, traceability, environmental, social and governance practices, and supply-chain transparency, forcing smaller suppliers to strengthen their management capabilities to remain in supply chains.

A common weakness among SMEs is that decisions are still based largely on experience rather than data, and when difficulties arise, companies often respond by cutting costs, reducing inventories, or lowering prices to retain customers, measures that are effective only when supported by reliable data on productivity, logistics, inventory, profit margins, and consumer behavior. Cooperation among smaller companies also remains limited, and sharing warehouses, coordinating logistics, expanding distribution channels, and jointly improving management standards could help businesses reduce costs and strengthen their resilience against market volatility.

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Tien said the biggest difference between companies that remain in business and those that exit the market is not the amount of capital or number of orders they receive, but their internal resilience and ability to adapt to a changing environment, as companies that have weathered the turbulence are typically prepared in advance with customer databases, standardized operating processes, loyal customer bases, and adequate cash reserves. For enterprises, a small scale is not necessarily a disadvantage in a volatile business environment, as their flexibility can allow them to test new ideas and adjust their business models faster than larger companies, but that flexibility can deliver results only when combined with modern management capabilities, data-driven decision-making, and a long-term development strategy, factors that will determine whether businesses can survive the current market shakeout and enter a new growth cycle.