A recent report by Standard Chartered, based on a plan of interviews with executives from a large number of European companies operating with ASEAN, shows us a very interesting picture.
The forecast of an important increase in business in the next 12 months is almost homogeneous among the interviewees and focuses on 4 main factors: area composed of growing consumer markets; various free trade agreements signed in recent years; a more than reliable supply region, a constant increase in demand.
The Europe-ASEAN corridor is led by Vietnam, a country we have already said about growth, pandemic management, investments. In second place Malaysia and Thailand, followed by the other countries in the area.
Let's focus on some analysis factors:
Pharmaceutical production is expected to grow on the affordable generic market, particularly in Indonesia, Vietnam and Thailand. European companies should consider supplying pharmaceutical ingredients. A separate note is the food supplements and multivitamins sector, which is growing exponentially.
Consumer goods are rapidly evolving thanks to a growing middle class and higher consumption. The Food & Beverage sector will be the driving force and Made in Italy will have the great opportunity to increase market shares.
Do not forget the automotive sector in general; the region will increasingly concentrate the production, logistics and export of electric vehicles, with possible benefits for European manufacturers and suppliers.
Attractive opportunities for European companies that can offer digital solutions, as Southeast Asia invests in infrastructure for smart cities, transport and logistics. In recent years, projects for the development of smart cities have multiplied with extensive involvement of foreign investments.
The renewable energy sector deserves a separate chapter: in the face of a project to revive the economies and to increase the development of the renewable energy system, the ASEAN countries have established an ambitious five-year energy cooperation plan (APAEC 2021-2025). ASEAN energy ministers agreed to set a target of 23% share of renewable energy in the region's total primary energy supply and 35% in ASEAN's installed power capacity by 2025. An ambitious plan as we said, but which is expected to become a primary objective, so much so that some countries are already positioning themselves as main players in the development of renewable energy. Today, Vietnam, Thailand, Malaysia and the Philippines account for more than 80% of the total ASEAN capacity, with Vietnam leading the way with 34%.
Finally, the report reported how e-commerce in Asean is ready to be one of the fastest growing sectors, with a momentum supported in particular by the post-Covid-19 scenario. More technologies and growing economic availability appear to be the main factors of this trend. It is estimated to increase to over 310 million consumers by 2025, up from 250 million in 2018 and 90 million in 2015.
The outlook is undoubtedly optimistic, despite some critical issues that may still exist, such as the correct understanding of regional regulations, payment guarantees, quality of infrastructure and management of local resources. The analysis activities, the selection of partners and the correct management of follow-on and business development operations are fundamental.
However, the trend is clear; ASEAN is now one of the main markets in the world and will be increasingly rich in opportunities for European companies, both for those who want to diversify and expand their commercial or investment activities, and for those who wish to face structured internationalization processes.