Overview
Accenture recently completed a study on regional expansion for businesses in South East Asia. In the thought leadership publication- “Destination South East Asia: A Joint Pathway to Future Growth? Opportunities for Regional Business Expansion”, we postulate that the regional economic growth trajectory will be influenced by businesses in two ways. First, by the extent to which businesses respond to the opportunity to meet the rising consumption of the region’s population of more than 600 million people. Second, by the ability of businesses to become truly regional and achieve scale across the national borders of the ten ASEAN member countries. In the other thought leadership publication- “Time for Regional Expansion is Now: Why Businesses are Gravitating towards South East Asia as a New Growth Destination”, we explore the question of how both multi-national and domestic businesses are responding to the expansion opportunities in South East Asia.
More than 400 businesses operating in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam participated in the study, as well as in-depth interviews with regional business leaders, industry associations, and officials from regional governments and the ASEAN organisation.
The study findings indicate that for businesses already operating in South East Asia, now is the time to accelerate regional expansion; for businesses that have plans for regional expansions, now is the time to act. To learn more about our study, and explore options for how to position and enable your business to successfully grow in South East Asia, please read our thought leadership publications.
Summary Findings
Our study found that South East Asia is emerging as a prime business destination in Asia. After China and India, South East Asia is generally regarded as the third pillar of Asia. It is also becoming more unified as the region’s nations continue to move towards their goal of building a more cooperative and integrated Economic Community by 2015 through the Association of Southeast Asian Nations (ASEAN).
By 2020, the region is expected to be among the world’s largest economies and the fourth largest in Asia. The demographic fabric will consist of more than 650 million people, most of whom will be middle class, educated and aged below 30, with rising disposable incomes and a strong appetite for consumption. A growing consumer market and the significant economic integration efforts across the 10 South East Asian nations is giving birth to a new regional business destination where several opportunities exist within national as well as regional borders as South East Asian nations continue to build and grow their economies.
The study also explores the question of how both multi-national and domestic businesses are responding to the expansion opportunities in South East Asia. Findings suggest that:
- The private sector will help accelerate economic growth across South East Asia as businesses seek expansion opportunities into new and often neighboring markets.
- South East Asia is perceived to be a long-term destination that will remain on the periphery of an Asian strategic agenda for a majority of businesses outside of the region but at the centre of expansion plans for native businesses seeking growth closer to home.
- While many remain unconvinced it is possible to achieve regional scale in South East Asia, businesses are planning for, or have already started expanding across, multiple countries within the region.
- Businesses are cautious but largely optimistic. Whether that optimism is well placed will depend heavily on how the public and private sectors throughout the region can work together to reduce today’s barriers and increase certainty for business expansion and, in turn, faster economic progress.
Accenture’s point of view is that a ‘wait and see’ approach to expansion is no longer the right choice. We believe businesses that position themselves today for growth in South East Asia will be rewarded by finding themselves in the middle of a new ‘centre of gravity’ within future high-growth markets.
For a discussion on how you can grow your business and expand within the region, please email us at growinasean@accenture.com