Trading with ASEAN: Q&A with Ross Hunter
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HSBC Knowledge Centre
21 October 2015
If you’re looking eastward for a new market or trading partner, India, China and Japan aren’t the only options
“ASEAN [Association of Southeast Asian Nations] isn’t a common acronym to UK businesses, while ‘Southeast Asia’ evokes images of the beaches of Bali and Phuket rather than an exciting group of ten potential export destinations,” says Ross Hunter (right), executive director of the UK-ASEAN Business Council (UKABC).
UKABC aims to raise the profile of the ASEAN countries (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) in the UK and encourage more UK businesses to consider the region as an alternative to China and India.
Hunter continues: “Through UKABC’s signposting to information, events and visits to ASEAN markets, UK businesses can make informed choices about their export strategies in this region.” So, what else should UK firms know about ASEAN?
Please tell us more about the ASEAN economy…
Ross Hunter (RH): “By 2030 the ASEAN economy is predicted to eclipse Japan’s and be the world’s fourth largest ‘single market’ after the EU, US and China. ASEAN is home to more people than Europe, and has the world’s third largest labour force. There are some 67m ASEAN consumer households – but this could double by 2025.”
Are British goods popular in ASEAN?
RH: “‘Brand Britain’ has never been stronger globally and there’s real demand for UK products and services across ASEAN. From luxury cars to boutique beers, cutting edge architecture to world-class animation, UK companies are winning business based on innovation and quality. ASEAN customers want UK-designed, innovative, high-quality products and services. This was evident during Prime Minister David Cameron’s recent visit to the region, when new deals worth £750m were announced.”
So the outlook for UK exports to ASEAN is good?
RH: “They are. Although the ten ASEAN countries are neighbours, they have distinct identities and different needs. The Asian Development Bank predicts the size of the middle class in emerging Asia will increase from 24 per cent of the population in 2010 to 65 per cent in 2030 – creating almost 300 million new consumers. In addition, the large ASEAN infrastructure projects offer great opportunities for UK businesses. Japan is a major investor, so partnering with Japanese companies is another option.”
How are the ASEAN economies faring?
RH: “ASEAN has lived in the shadow of China and India, but things are changing. Chinese growth is slowing and production costs are rising, while India is not growing as quickly as predicted. Considering the impact of the Chinese slowdown, ASEAN economies are performing well. Some markets have above 5 per cent growth with the Philippines and Vietnam the star performers over the past couple of years.”
What are the key barriers to trade?
RH: “I’m not sure ASEAN has any unique barriers, as with all overseas markets there can be red tape and distance is a consideration, but these can be mitigated. I’d recommend seeking assistance from one of the fantastic delivery partners in individual ASEAN markets, including UK Trade & Investment and the British Chambers of Commerce. Through the UKABC business network, we can provide those contacts, as well as introductions to UK companies that have won business in the region, so you can learn from their success.”
How different is the business culture compared to the UK?
RH: “Not that different. Business cards and handshakes are standard. Emails have their place, but the humble text is popular in some markets and apps such as WhatsApp in others. Find out how your business partner prefers to communicate. English is widely spoken across ASEAN, but even if your main contact doesn’t speak English, someone in their team will.”
How do I make a good first impression with ASEAN contacts?
“Talk football. The Premier League is hugely popular in ASEAN and it can provide a great conversation starter. Food is also an integral part of the culture and this transcends into business meetings. Sample the delicious local Asian cuisine; enjoy the hospitality; and take time to learn about your potential business partners.”
How can UK SMEs find out more about opportunities in ASEAN?
RH: “Visit the UKABC website. Come to one of our events to learn from experts. Research the markets in greater depth before proceeding. Where possible, visit the market, attend a trade show or become part of a trade mission or bespoke programme. It’s hard to win business in ASEAN from the UK. Experience ASEAN, feel the energy and find out what opportunities exist for your business in one of the world’s fastest-growing regions.”