Asia has been on the global investment radar for the past few years, thanks to the stratospheric rise of China, India, and more recently, Southeast Asia.
Coming out of the economic slump after 2009, the world economy has collectively managed to climb out of recession to achieve positive GDP growth rates. Leading the pack is the Asian region, enjoying the highest growth rates over the past ten years, along with several African nations, and is projected to continue this pace until 2030. While Asia has proved its economic prowess over the past years, is this growth sustainable?
Asia is a huge market and you will risk stretching yourself too thinly if you attempt to conquer the entire region. Whether you’re looking to expand your business or explore new investment opportunities, it would be wise to pinpoint the key markets in Asia that bear the greatest economic potential. We take a look at the key indicators that will contribute to the region’s future performance.
Ambitious, bold, game-changing – this sums up the nature of the infrastructural projects that are currently underway in Asia. The biggest project that has sent the world buzzing in fevered discussions would have to be China’s Belt and Road initiative, also known as the Silk Road initiative. Currently, a third of the world’s economy is already on board, with more countries looking to be a part of the massive global project.
Announced by China’s President Xi Jinping in 2013, the project looks to recreate the ancient land-based trade route of the Silk Road, as well as a new maritime route through various oceans. The project involves the creation of train lines that run from Spain and Angola, all the way through to the Eastern parts of China and Southeast Asia. The project also involves the creation of a China-Central Asia natural gas pipeline system.
Another mega project in the Asian region is India’s Delhi-Mumbai Industrial Corridor (DMIC). The project will involve the development of two power plants, 23 industrial hubs, a six-lane highway, two ports, six airports and 24 smart cities stretching across the 1,500 km long corridor. Reining in US$100 billion worth of investments, the DMIC is endorsed and supported by Japan, having been inspired by the success of Japan’s Tokyo-Osaka industrial corridor. Eventually, the DMIC hopes to double employment opportunities, triple industrial output and quadruple exports in the next nine years.
Young and Digitally Savvy
The median age of Asia’s population is 30.7, one of the youngest in the world, with the exception of Africa. Businesses will be able to leverage on the vast population of working professionals with disposable income, looking to consume products and engage services. In 2017, Asia contributed to 31% of the world’s consumer disposable income, and is expected to add another US$12 trillion to the total amount by 2030.
This huge population of eager consumers are looking for the latest product or service online – many in Asia are digitally savvy and have adopted a mobile-first approach to the Internet. Due to the lack of infrastructure in the developing nations in Asia and the difficulty in laying of landlines fibre-optic cables, Internet connectivity in Asia is developed through mobile networks in place of the traditional desktop browser. This phenomenon was especially obvious in China, where the rapid rise of mobile internet access developed the nation as the first true mobile-first commerce nation. In addition to China, Southeast Asia has recently seen a rapid rise in Internet penetration rates, with double-digit growth in most segments and countries in the region.
Asia is clearly going through massive change, with some countries moving at a faster pace, while others are starting to plateau. Which countries have the best potential? Here are our top 3 picks:
According to Bloomberg, from 2012 to 2017, Indian cities have seen the fastest growth in Asia, with Delhi leading the way, expecting an economy that will be 50% bigger than what it was in 2017. Together with its vast population and mega projects underway, India is definitely a key market in Asia based on potential.
Based on historical figures, South Korea has shown sustained economic growth, and has not shown signs of exponential increments. At this current juncture, the potential of South Korea is purely speculative, and is dependent on the easing relations with North Korea. Bilateral relations between the 2 have been progressing, and if North Korea opens up their economy, South Korea stands to gain from the North’s untapped potential.
Most would look to Singapore, Thailand or Indonesia when they think about key markets in the Southeast Asian region. While these nations have enjoyed considerable growth over the past years, when it comes to consumer confidence, Cambodia tops Southeast Asia at a rating of 93.1, with consumers feeling ‘extremely optimistic’ on the nation’s economic outlook.
Besides these 3 countries, Asia’s boundless potential stretches across many other markets. Dive into the demographics, economic indicators and investment climate in each country on our Insights platform.