State of the Nation: ASEAN - Information Hub
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Introduction
ASEAN embodies opportunity for agile Australian businesses.
ASEAN's economic growth is outpacing the rest of the world. With a young and mobile population, it is set to become the fourth largest economy globally by 2030.
By 2030, more than half of the world's middle class will live within a six-hour flight from Bangkok. As the region’s cities expand exponentially, an estimated 90 million more people will move to urban areas by 2030.
In the lead-up to the landmark ASEAN – Australia Special Summit, we engaged over 2500 organisations and individuals nation-wide, to dive into what the tremendous changes underway in Southeast Asia mean for Australian businesses.
With grant funding from the Australia-ASEAN Council (AAC), we brought together leading industry experts across urban and rural Australia to explore ASEAN’s changing consumer landscape and evolving digital economy, as well as how to leverage the AEC common market and collaborate to grow knowledge economies, education and service sector links.
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Common Market, distinct strengths
ASEAN officially launched its Economic Community (the AEC) in 2015, marking an important economic and political commitment to the region’s shared and connected future.
The AEC is still a work in progress, but it has made solid progress towards the more seamless movement of goods, services, capital, people and communication. Tarif barriers have been removed across the six largest member countries, and short-term travel has become easier.
With connectivity at its core, the initiative has fundamental implications for Australia. Businesses need to understand how ASEAN’s economic integration will impact on their operations, customers, suppliers and strategy.
Each ASEAN country has distinct and complementary strengths. For example, Singapore is renowned for its financial services sector; Thailand has built a strong manufacturing industry, Malaysia and Vietnam have established ICT hubs and Myanmar can provide access to expanding pools of labour.
“It is important to understand what is happening in ASEAN and get away from the risks, for example, by focusing on the region’s remarkable macro economic stability. You need to understand how economic integration can impact your business, as well as how to utilise FTAs.” - Fraser Thompson, Director, Alpha Beta and President, AustCham ASEAN
“Cochlear’s information and communication and technology centre in KL allows us to tap into Malaysia’s excellent pool of ICT skils and it’s business friendly climate, to grow a global support service.” - Georgina Sanderson, Vice President, Policy & Market Access, Asia Pacific
“Indonesia has taken time and focus, but it is going to be Blackmores biggest market outside Australia within the next 3 years...Australia’s future is in ASEAN…Blackmores only succeeds where brand Australia succeeds, and brand Australia really resonates in these countries.” - Dean Garvey, Deputy Managing Director, Asia and International, Blackmores
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Innovation and the Digital Economy
ASEAN is undergoing a rapid and unprecedented digital transformation, driven by rising consumer classes, cheap and accessible devices, and youthful, tech loving populations who have embraced e-commerce and social media.
E-commerce is projected to grow at 14 percent over the next five years, compared with only four percent in China.
As these technologies revolutionise how people go about their daily lives, businesses need to seriously rethink how they engage with consumers in ASEAN's diverse markets.
Stone and Chalk, a Sydney and Melbourne based fintech start-up hub offers an interesting example. It recently partnered with Jakarta based UnionSPACE, to enable its users to utilize co-working spaces across Jakarta, Manila and Kuala Lumpur.
“ASEAN collectively is the largest Face Book country in the world, and Jakarta is the global Twitter capital” - Fraser Thompson, Director, Alpha Beta and President, AustCham ASEAN
“We need to to think outside the box in terms of fintech. ASEAN has moved beyond bank accounts – Take GoJack in Jakarta: The balance of a payments is transferred via a motorbike, not a bank account, because this is faster and more efficient than a bank transfer." - Lucy Liu, Chief Operating Officer, Airwallex
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Understanding ASEAN’s changing consumers
ASEAN’s considerable economic diversity means it is essential to look at country and market specific opportunities.
With rising disposable incomes and an expanding digital economy, ASEAN’s consumers are quickly transforming how they spend their money and what on.
Southeast Asia's new consumers are urban and young. They increasingly desire premium, high-value products, not just stable commodities.
Australia’s high quality, safe food, dairy and agricultural industries are well placed, as are many of our services offerings if they are tailored and customised to suit consumers' evolving preferences.
“When it comes to aged care, we can’t apply a western approach to Asian models based on filial piety.” - Peter Hennesy, Director, Jeta Global
“We are underperforming when it comes to ASEAN tourism. We need to raise the importance and value of ASEAN tourism, when compared to traditional growth markets like Japan, China.” - Jim Parashos, Head of Aviation Business Development at Brisbane Airport Corporation
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International education: providing quality experiences to gain a competitive edge
Currently, around 100,000 Southeast Asian students are studying in Australia.
To grow the international education relationship to its full potential, we need to refine and develop a niche value proposition. This in turn should be customised to ASEAN’s diverse education needs.
It will be important to better understanding and align Australia's international education offering with the strategic priorities of key industries and growth sectors in each distinct ASEAN’s economy.
Relationships are at the core of developing knowledge economies and education-based partnerships. Australia has a natural asset in the nearly one million Australians of Southeast Asian ancestry.
“90% of students coming to Perth know very little about the city – We need to enhance the value proposition and clearly define the opportunity for international students and their family. And we need to get better at selling this proposition.” - Rod Jones, Chair, Study Perth
“We need to offer a niche that adds to the student experience – For example, a corporate pledge that international students will be given a workplace placement during their study to enhance their employability.” - Robynne Walsh, Principal, Phoenix Academy
“It is important to understand and link in with industry priorities within ASEAN – for example, Indonesia is aiming to upskill its university professors to masters and PhD level, and Australia can be Indonesia’s partner.” - George Marantika, President, Indonesia Australia Business Council, Yogyakarta
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Resources
Asialink Business’ State of Nation ASEAN series received grant funding from the Australia-ASEAN Council. Asialink Business is proud to be associated with the ASEAN-Australia Special Summit.
Country Starter Packs
Asialink Business has produced Country Starter Packs for each of the key ASEAN markets. Download the free guides here.
The Country Starter Packs are comprehensive guides that help Australian businesses looking to establish or expand their operations in Asia.
ASEAN Now report
Asialink Business proudly supported Austrade, the Department of Foreign Affairs and Trade and the Department of Prime Minister and Cabinet for the launch of ASEAN Now: Insights for Australian Business, which provides an overview of Australia's trade and investment relationship with ASEAN.
Download the report here.
