Companies plan ambitious expansions in Southeast Asia
This is according to the HSBC Global Connections Survey, a survey of 3,509 companies in nine markets worldwide. The survey polled decision-makers from companies with an annual turnover of at least five million US dollars who are already doing business in Southeast Asia or are planning to do so. Companies in India, France, Germany, the USA, the United Kingdom, Mainland China, Australia, Hong Kong, and the GCC states (United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Oman, Kuwait) were surveyed. In Germany, 390 companies provided information.
The results indicate a growing confidence of international companies in this region. This is also true for companies from Germany: 75 percent of the respondents expect to significantly increase their growth in the region by 2026. The most important ASEAN markets for expansion include Indonesia (21 %), the Philippines (20 %) and Thailand (18 %).
43 per cent of the surveyed companies from Germany have already established partnerships or joint ventures in ASEAN markets. A majority of them would like to expand their existing activities there. The top markets in which the German companies surveyed are already active include Thailand and Singapore. These are also among the two target markets for possible expansions: 29 per cent of the companies stated they wanted to focus on their growth in Thailand in the next two years; 25 per cent plan to do so in Singapore.
But expansion into new markets in Southeast Asia is also interesting for German companies, according to the HSBC study. 21 per cent plan to expand their business in Indonesia in the next two years; 20 per cent of the respondents see a good opportunity in the Philippines.
27 per cent of the surveyed companies from Germany see opportunities in the size of the market, which is quickly scalable, 26 per cent cited the growing digital economy as an important factor, and 25 per cent cited competitive wage prices as a reason why the ASEAN region is attractive for business expansion. In addition, advancements in 5G technology (26%) and cloud computing and digital payments (25%) also spoke in favour of the region.
Financial stability (30%), difficulty in finding the right talent (26%) and sustainability challenges (26%) were cited as the biggest challenges for German companies when doing business in the ASEAN region.
In terms of sustainability, 29 per cent of the German respondents said that limited ability to hire people with the right expertise, higher costs (28%) and the ability to control their supply chain partners (27%) were important factors. These were among the top three barriers to making their ASEAN business more sustainable. Only four per cent of German companies have already achieved net-zero carbon emissions in Southeast Asia, the lowest result among all other companies surveyed.
“These results confirm what we are seeing with our own clients: that companies around the world are increasingly optimistic about being able to expand in Southeast Asia”, says Amanda Murphy, Head of Commercial Banking for South and Southeast Asia at HSBC.
Contact:
Elvira Stark
+49-211-910-6900
elvira.stark@hsbc.de
About HSBC Germany
HSBC Germany is part of the HSBC Group, one of the world’s leading commercial banks with assets of USD 3,041 billion (as of June 30, 2023). It has a network in 62 countries and territories worldwide, which account for over 90 per cent of global economic output. HSBC Germany’s clients are companies, institutional clients, the public sector and wealthy private clients. The bank stands for internationality, comprehensive advisory skills, great placement power, first-class infrastructure and capital strength.
About HSBC Continental Europe
HSBC Continental Europe, headquartered in Paris, is an indirectly held subsidiary of HSBC Holdings plc. In addition to the banking, insurance and wealth management activities based in France, HSBC Continental Europe also includes business activities in Germany, Belgium, France, Ireland, Italy, Luxembourg, the Netherlands, Malta, Poland, Sweden, Spain and the Czech Republic.
