The ASEAN zone is an attractive market for the development of European Companies
The third largest economic block in the world, the Southeast Asia and Oceania zone offers new opportunities. This region represents a market with great potential, despite the health crisis affecting the world economy to develop the attractiveness of Europe.
What is the economic impact of covid-19 in Asia today?
The growth forecasts in the context of the epidemic for countries in the zone are of two kinds. On the one hand we have countries that will go into recession such as Singapore, Thailand, Malaysia and Australia, and on the other hand Indonesia and Vietnam which are clearly out of the game (respectively 2.1% of growth for Indonesia and 5% for Vietnam).
Which sectors are most affected by the health crisis and which ones are resisting the best?
Among the economic sectors most strongly affected by the crisis in the South-East Asia Oceania zone are activities linked to tourism, restaurants and hotels. The airline industry and aviation have also paid a heavy price. Finally, the luxury and retail sector has not been spared. But conversely, the healthcare, IT services, software, video games and construction sectors continued to record sustained activity during and after the health crisis.
Finally, agriculture is a relatively impacted sector in this area. In the face of the crisis and border closures, local production has been reduced (no exports) and food imports sharply reduced. In Singapore, for example, 90% of food products are imported!
Why is the South-East Asia Oceania zone a particularly attractive market for European companies?
The countries of the South-East Asia Oceania zone are much less competitive markets than continental Asia. Thanks to the emergence of a middle class, this economic zone undoubtedly represents a strong relay for growth, particularly domestic growth, with a population that has access to property and has strong purchasing power. It is estimated that the number of middle class people in 2030 for the area will be 450 million. In addition to this characteristic, there is a hyper-connected population that is very favorable to the practice of e-commerce.
What advice can be given to French companies wishing to set up in one of the 11 countries of the ASEAN Oceania zone?
At OPKO Finance, we are convinced that the international market is an essential development vector to seek growth and margins. There are several ways to develop internationally:
- Follow a large ordering party who has an international project and take the opportunity to set milestones locally,
- Back up to your locally based distributor to build a local presence,
- Use incubation platforms present in these areas. These structures make it possible to provide dedicated and operational resources to your company.
But above all, companies must have defined a real implementation strategy (know its competitive advantages to highlight, the estimated needs of the market, a detailed action plan for the first year).
For more information on how to structure your operations in South East Asia, please contact our team at email@example.com or by phone + 852 2654 8800 or +63 32 402 0170.