By any standard, Southeast Asia is an economic juggernaut. Even with the current economic slowdown in China, the region as a whole, is predicted to grow at a rate of 6.1% every year. It is not just China that is open for business. Countries like Indonesia and India offer significant opportunities. Below are some tips and guidelines if you are looking for expanding into the Southeast Asian market.
Realise That it is Not a Single Market
Southeast Asia is not a monolith. In fact, it is home to very distinct markets with over 10 different legal systems, multiple currencies, and a ton of languages to deal with. Jakarta is not the same as Singapore and Singapore is very different from Mumbai or New Delhi.
Each market offers its own set of opportunities and challenges. For instance, the middle class in China and India is a burgeoning population with increasing purchasing power. However, segmentation is far more diverse in these markets. Grouping people under broad categories is undesirable due to intrinsic cultural differences. For example, India is home to 27 states with its own heritage, identity and languages. Going extremely specific with localisation is crucial if India is the target market.
Know the Opportunities
Southeast Asia is home to almost half the world’s population, seeing a marketable population of over 600 million. A growing middle class is another huge attraction for foreign businesses.
Besides, Southeast Asia population is well-known for its high mobile penetration rate. There are over hundred million people here that are connected to the internet via their smartphones, which makes them a perfect target for e-commerce businesses and online marketing.
Know the Challenges
Of course, it is not a bed of roses. With the rapid urbanisation and growth, there is also plenty of economic disparity. Higher taxes on profits, underdeveloped foreign investment environment in countries like Myanmar and Cambodia, as well as corruption and bribery are some of the setbacks and major risks.
Some of the common pain points of marketing to this region include immigration policies, brand protection, regional and local regulations, as well as intellectual property registration.
Forming partnerships is a very good strategy for expanding into Southeast Asia. In fact, it might be necessary, considering restrictions on Foreign Direct Investment and other requirements. For instance, some Southeast Asian countries have rules demanding the formation of partnerships with local firms or having local shareholders. These rules are more common in some industries than others, such as fisheries, transport, banking and telecom.
Find the Right People
Finally, search and identify the right people to work for you. You need people who understand the market and the culture. It is preferable to hire locally, which can be challenging. Yet, it is the best option if you want to tap into local business opportunities. Elite Asia has translators and writers in strategic cities in Asia, helping you develop an established presence in Southeast Asia and retain the image and voice that keeps your business distinctive.
Entering and expanding into the Southeast Asian market can be quite challenging, however, with the right kind of preparation and patience, penetration can be achieved gradually.
Handing flyers and advertising on television were once effective and popular ways to boost retail sales.