The story of a country’s development is often one of its companies’ evolution; ASEAN’s resilient performance over the past decade has allowed many of its local companies to rapidly expand across the region and beyond, giving birth to numerous multi-ASEAN corporations (MACs).
The power, reach, and influence of its indigenous companies have begun to increase dramatically. We’ve witnessed similar rises of local and regional companies in other parts of the world–East Asian companies in the 1980s-1990s, Multi-Latinas over the last decade, and Chinese firms in the present.
The region itself has become the second-largest foreign investor into ASEAN, outdoing Japanese and EU investments for the past two years. This trend is clearly indicative of regional companies’ increased faith in ASEAN’s growth potential and their ability to effectively scale across the subcontinent.
Companies from ASEAN often do not receive much attention from Western analysts, who instead extensively focus on China and India. However, ASEAN firms are a force to be reckoned with; keeping pace with the region’s growth, the number of ASEAN companies on Forbes’ list of Global 2000 companies has more than doubled in the past seven years (from 36 in 2006 to 76 companies in 2013). Moreover, ASEAN has more companies on Forbes’ Global 2000 list than India, Brazil, or Russia.
Western multinationals need to understand that these multi-ASEAN corporations have emerged in an evolving world where capital flows more quickly, quality executive talent moves around more easily, trade is more liberalized, and technology is more sophisticated than ever before. These companies will become competitive at a much faster pace than traditional Western companies from four decades ago.
While not mature enough to challenge Western markets, the rise of MACs is going to lead to an increased fight for resources (both natural and human), heightened competition for several fast-growing segments, and the reduction of prices alongside faster innovation in ASEAN. FSG’s clients can find the in-depth analysis on this topic here.
FSG’s Seven Crucial (Less Talked About) Facts about ASEAN
This update is Part Three of a seven-part series of quick insights that I will be publishing over the next few weeks on the ASEAN region (see full list here). These have been selected carefully based on FSG’s numerous interactions with regional executives. I will discuss the topics which have proven to have high importance for senior executives of western multinational companies and ones with a lack of coverage in the business spheres. Next week’s update: “Workforce Almost Completely Gen-Y: 289 million people below the age of 35 in ASEAN.”