For most people, Asia has become synonymous with cheap imports and the ready availability of low cost, high-quality consumer products.
Competitively priced Asian manufactured products have transformed businesses across Europe, whether they are e-commerce sites offering fashion goods, distributors of household products or electrical goods retailers. In the same way that America changed the way manufacturing businesses operated in the 20th Century with new models and business theories, Asia – and most specifically Southeast Asia – is doing the same thing today, in the 21st Century.
What is the nature of the opportunity for UK companies? Which sections of Asia are best to target and how? Here are 5 things you should know about doing business in Asia.
Where to focus your attentions
We all tend to think of China when we think about doing business in Asia and whilst this country is a vast market opportunity, it is also one of the more difficult to penetrate. From personal experience, Southeast Asia and specifically the English-speaking countries that form part of the ASEAN network, which includes Thailand, the Philippines, Brunei, Cambodia, Indonesia, Vietnam, Laos and Singapore, is a more accessible option. This region represents a high growth economy of over 600 million people, with a combined GDP of US$ 2.4 trillion. Based on future projections, the fourth largest by 2050, with over 5 per cent annual forecast growth rates. Compare that to the sluggish rates within the majority of Europe and the opportunity is obvious.
What’s in demand?
There’s an insatiable appetite for importing cheap consumer goods produced by South East Asian companies, but when it comes to ASEAN firms buying B2B products and services, the reverse is true and ‘Brand GB’ is held in high regard. Although the biggest importers are the banking and finance sectors, many British B2B companies, for example consultancies, software developers and other business suppliers, offer products and services that are very highly sought after among these fast-growing businesses, all of whom are keen to adopt best practice.
Where to start?
There is a wealth of support available for UK businesses to take advantage of, ranging from Invest HK to the British Chamber of Commerce in Asia and the CBI. There are also many trade shows that are worth attending, to conduct initial market and competitor research. Attending CILF, one of the region’s largest trade events for the transport and logistics sector highlighted the fact that that few UK logistics software companies were actively targeting mid range businesses in Asia and yet demand for our products and services would be ongoing and likely to grow as the local economies grew.
Understanding local business culture
One of the biggest differences anyone doing business in Southeast Asia will notice is the culture. It’s very relaxed and not dissimilar to the way things were in the ‘80s and ‘90s in the UK. That said, people work extremely hard and dedicate long hours, but the boundaries are far more blurred. Business is a very sociable activity, people do a lot of networking and will think nothing of having 5 or 6 ‘mini meetings’ during a day like speed networking, to share ideas and explore opportunities together.
Conversely in the UK, people will travel for a couple of hours to see a client and then spend the morning to justify the trip. Asia moves much more quickly, travel times are shorter and meetings more frequent and brief. There’s also less concern about the etiquette of buying someone a drink or meeting them over dinner whereas in the UK, we have become much more constrained by legislation and time pressures
How to take the first steps
Partnerships are a low risk strategy to adopt when considering the first steps to take. We have built a multi-layered partner network to take advantage of local contacts and expertise, with Indigo providing business and solution expertise to the end customer. Depending on the nature of the relationship, our partners can either support us with simple referrals or provide very specialised sales and implementation services. Both are equally important to have in place, especially during the early stages.
We also have a wide partner network that is more formal, with specific agreements in place with software vendors who offer complementary products – transport management systems, quality assurance software and document management – from whom we can receive referrals and on the ground support.
With the uncertainty of Brexit on the horizon and stagnant growth in Europe, South East Asia offers huge, untapped demand among a wide range of high growth, local businesses, for UK based developers of technology solutions with a strong reputation. Indigo spotted this opportunity two years ago and started to establish operations there.
Initially we focused on the Philippines, then expanded to Hong Kong and Singapore with dedicated subsidiary companies and we are continuing to grow our APAC team. Today our Philippines operation has 3 full-time members of staff, who cover everything from pre-sales to support, project implementations and software development and serve high growth, local businesses who are investing in technology at a rapid pace.