22 January 2009
By Alan Koziarski, New Zealand Trade and Enterprise Regional Director, South and Southeast Asia.
Asia is experiencing the same financial turmoil as the rest of the world but there is a silver lining for Southeast Asia and India – growth rates are still expected to be positive.
During 2008, Southeast Asia enjoyed an estimated 5 percent growth. For 2009, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam are all forecast to have positive growth rates, averaging 3 percent and climbing to 4 percent in 2010.
Predictions for greater Asia to emerge as the economic powerhouse in the global economy remain intact. However, the Economist Intelligence Unit predicts a greater focus on regional trading which is a step away from the globalisation which has been the catch cry for many years.
New Zealand is part of the greater Asian region and is just scratching the surface in terms of business opportunities here. With a careful approach there are still plenty of opportunities, although it remains a difficult and sophisticated market.
To break into it, businesses need to be sure of their value proposition and prove they are committed to doing business here. Southeast Asia and India are not places to undercapitalise.
And because the rule book is being rewritten as the world’s economy realigns itself, they will need to treat each push into a market as a fresh project, not an extension of previous business dealings.
Opportunities in Southeast Asia and India are being driven by consumers and governments. While consumerism is on the rise in Asia, the growth will take time.
Development of infrastructure is being used to boost economies around the world and it’s no exception here. This means new opportunities in fields like construction, telecommunication and biotechnology.
At the same time, a new era of thriftiness is expected to emerge. Consumer demand will decline due to falling incomes and a realisation that people need to save.
Value for money and price are expected to become the dominant consumer considerations. Companies will have to change their thinking in terms of segmenting customers and retaining brand loyalty.
Wise decision-makers will invest in market intelligence and try to have a representative overseas to facilitate opportunities as they arise. Sensible risks and reasonable expectations are much more likely to bring long term rewards.
Planning is likely to be more difficult than previously and businesses need to recognise the greater risk this new economic environment will present.
Those that use this time of immediate business survival to also re-evaluate their business models will be the ones to emerge in a stronger position and take advantage of the next era.
*Alan Koziarski is based in Singapore.
