Market research for doing business in Asia

Asia is a vast and diverse region, comprising over 40 countries with varied economic conditions, cultures, and business environments. It is home to some of the world’s largest emerging markets and advanced economies, making it an essential region for global business expansion. This article provides an overview of the key commercial due diligence aspects when entering the Asian market.

Key Market Numbers

Asia’s economic size and diversity offer significant opportunities, but understanding the specific conditions of individual countries is crucial. Here are the key market numbers:

• Population: Approximately 4.7 billion (2023), making up nearly 60% of the global population. The largest populations are in China, India, and Indonesia.
• GDP per capita: Varies widely. Japan, South Korea, and Singapore have GDPs per capita above $50,000 USD, while countries like India and Indonesia are below $5,000 USD.
• Urbanization: Over 50% of the population in Asia lives in urban areas, with rapid urbanization occurring in countries like China, India, and Vietnam. Mega-cities like Tokyo, Shanghai, and Mumbai serve as key economic hubs.
• Economic Structure: Asia’s economies range from heavily industrialized (Japan, South Korea) to emerging markets with large agricultural sectors (India, Bangladesh). Services and manufacturing play key roles, particularly in countries like China, Japan, and India.
• Ageing Population: Japan, South Korea, and China are experiencing rapidly ageing populations, creating opportunities in healthcare, eldercare, and financial planning services.

Language and Documentation

Asia’s linguistic diversity presents both challenges and opportunities for businesses entering the region. Language and documentation considerations are essential for success.

• Official Languages: There are hundreds of languages spoken across Asia. Major languages include Mandarin (China), Hindi and English (India), Japanese (Japan), and Bahasa Indonesia (Indonesia). English is widely used in business, especially in Singapore, Hong Kong, and India.
• Language Considerations: Localization of marketing, packaging, and product documentation into local languages is crucial, especially in non-English-speaking countries. In countries like India and Singapore, a mix of local languages and English is common in business contexts.
• Packaging and Documentation: Different countries have their own packaging requirements, particularly for food, cosmetics, and electronics. Labels in local languages, adherence to local safety standards, and product-specific regulations must be considered.

Consumer and B2B Buying Behavior

Consumer and B2B buying behaviors in Asia vary greatly depending on the country, but there are common trends that businesses should understand.

• Consumer Behavior: In many Asian markets, consumers are increasingly brand-conscious and tech-savvy. The rise of e-commerce is transforming shopping habits, particularly in China, India, and Southeast Asia. Online retail accounts for more than 20% of retail sales in countries like China and India (2023), with mobile commerce growing rapidly.
• B2B Buying Behavior: B2B purchasing in Asia tends to be more relationship-driven than in Western markets. Trust and long-term partnerships are highly valued, and decision-making can often be hierarchical, particularly in countries like Japan, Korea, and China. Networking is essential in markets like Hong Kong and Singapore.
• Online Presence: E-commerce platforms like Alibaba, Lazada, and Shopee dominate in Southeast Asia, while JD.com and Tmall lead in China. A localized digital strategy, including e-commerce platforms, social media, and local SEO, is critical for success in the region.

Market Challenges and Opportunities

While Asia offers vast opportunities, businesses should be aware of the challenges, including regulatory complexity, cultural differences, and market fragmentation.

• Products/Services that May Struggle: Products or services that do not align with local tastes, cultural preferences, or regulatory standards may struggle. For example, Western food products may need to be adapted to local tastes in countries like China or India. Services that are highly reliant on standardized global approaches may face challenges due to varying regulations and consumer expectations.
• Test Market Potential: Countries like Singapore, Hong Kong, and Malaysia are often seen as ideal test markets due to their developed infrastructure, business-friendly environments, and diverse, affluent consumer bases. Success in these countries can often be a precursor to broader expansion into other parts of Asia.
• Regulatory Environment: Asia’s regulatory environment can be complex, with each country having its own set of laws and regulations. The Chinese government’s regulations on foreign investments, for example, require businesses to navigate local partnerships and joint ventures. In contrast, markets like Singapore and Hong Kong offer more straightforward regulatory frameworks for foreign companies.