ASEAN BUSINESS DEVELOPMENT
ASEAN (Association of South East Asian Nations) is a geopolitical and economic organization consisting of 10 member countries in Southeast Asia, similar to the European Union, who integrated their economies at the end of 2015 and created the third biggest economic market in Asia after China and Japan with a GDP of USD 3 trillion in 2019. It is now home to 650 million people with a strong rising middle class that contributed to an estimated consumer expenditure of nearly USD 2 trillion last year and which is expected to double over the next decade.
The ASEAN Community has a massive labor force of 350 million people, which is increasing by 20% annually and has already become more cost competitive than China, which suffers badly from high wage inflation in recent years and the ongoing trade war with the United States of America. Despite the annual economic average growth of more than 5% over the past decade the ASEAN Economic Community has still the potential to accelerate growth and double its productivity by 2030, provided that the U.S. - China trade war won't become protracted.
Business opportunities in ASEAN seem therefore to be endless and the free movement of goods, investments, capital, services and skilled labor within the community does not only attract the interest of local companies. Multinational enterprises from overseas have noticed this development at an early stage, too, and the foreign direct investment inflow into this region is constantly growing and surpassed with USD 155 billion the investments of USD 139 billion received by China in 2018.
However, it has become clear that there will be a continued imbalance between the Member States and the impact for each nation and industry is still not foreseeable at the moment. Nevertheless, this development will necessarily change the composition and distribution of jobs across the community. Investments and labor productivity will therefore become critically important for organizations in their region.
In today's global economy, it is common knowledge that market proximity creates a competitive advantage and is considered crucial for a market entry and development in Asian countries.
● Eliminating high import tariffs
● Establishing consumer confidence
● Creating positive customer interaction
● Maintaining central leadership
Foreign companies should therefore weigh in all pros and cons in a comprehensive market analysis in order to understand the specific business aspects for this complex undertaking properly. Especially small and medium enterprises who are overstrained with such undertakings should always make use of experienced and competent local experts who are perfectly familiar with the economic and legal conditions in these countries.
● Where are the target consumer groups located?
● How is the labor market situation in each country?
● Is the transportation infrastructure suitable?
● Are there different regional tax incentives offered?
● What are the restrictions in a particular industry sector and country?
Don’t miss the opportunity to secure the benefits of this development for your business and talk to us today. Our experts will analyze the trends and challenges in your industry and provide unique value to your business and targets.