With a population of 630 million, ASEAN will emerge as the world’s fourth-largest economy by the end of 2023. In other words, the region will be the biggest economic powerhouse after the USA, China, and the European Union. The brimming cultural diversity and richness add dynamism to the region’s economy. The consumer market has a great role in the booming economy of the region. This article will uncover the untapped potential of the ASEAN consumer market. Understanding the potential is crucial for businesses and investors who are considering ASEAN market entry.
Rising Middle Class and Demographic Dividends
A rising middle-class group is the major driving force behind the consumer economy growth in ASEAN. The region also has a large youth population. Therefore, businesses will not find a shortage of skilled workforce supply in this region in Southeast Asia.
A high population of young and middle-class people makes the region suitable for a thriving consumer economy. People living here show interest in purchasing various types of goods and services. On the other hand, seamless digital connectivity throughout the region helps consumers find sellers online. The ecommerce industry is growing at the rate of 22% per annum in ASEAN.
Digital connectivity also helps businesses find potential buyers in rural areas. According to a report, rural poverty in ASEAN declined from 47% in 1990 to 15% in 2015. A sharp decline in rural poverty also boosts the overall consumer spending ability of the region.
Consumer Behavior and Cultural Nuances
The Association of Southeast Asian Nations (ASEAN) comprises ten countries: Myanmar, Cambodia, Laos, Philippines, Indonesia, Singapore, Thailand, Brunei, Vietnam, and Malaysia. Each ASEAN member has unique demographic and social structures. Therefore, consumer behavior varies from one region to another.
Cultural diversity leads to different types of consumer preferences and demands for various goods and services. For example, businesses considering market entry in Vietnam recognize the country for its tech-savvy population. The presence of the tech-savvy population makes the region ideal for ecommerce business growth. On the other hand, Cambodia renders a perfect demography for a fast-paced real estate development.
Persistent Effort to Overcome Infrastructural Challenges
The consumer market also has immense potential in ASEAN due to the low regularity of complications and challenges. However, it does not mean that the market does not pose any challenges to businesses and investors. Like other thriving economic markets, the ASEAN region also brings a few challenges to investors.
Limitations of logistics and digital infrastructure are the major challenges for businesses in this region. However, all ASEAN countries are poised to bolster infrastructure with a vision to render more convenience to businesses and investors. Local governments engage in various developmental projects in tie-up with international stakeholders to overcome the infrastructural drawbacks.
Market Entry and Growth Strategies
Businesses must adopt a nuanced approach to venture into the ASEAN consumer market. Collaboration with local partners is crucial. At the same time, it is crucial to understand regulatory frameworks to set up a legitimate business in this region. In such a scenario, investors and businesses may require a strategy execution service to develop robust and meaningful strategies for business formation.
Businesses venturing into ASEAN should keep a long-term vision since the region is growing with the advent of time. Moreover, a long-term plan should include strategies to develop a trustworthy brand value in the region to magnetize consumers. Besides maintaining top-notch product quality, it is essential to assess growing consumer needs, introduce value-added services, and conduct research on consumer behaviors to develop sustainable brand identity.
Conclusion
The ASEAN consumer market represents a treasure trove of opportunities for businesses and investors worldwide. A growing middle-class and youthful population is the major driving force behind the region’s growing importance as a sustainable consumer market. A tech-savvy population and fast-growing digital infrastructure boost ASEAN digital sales for the ecommerce industry. With such immense potential, the region is poised to attract more foreign investments in its consumer market in the upcoming days.
