Many businesses do not have or are not seeking regional scale in South East Asia because their expansion aspirations are currently targeted at wider Asian or global markets.
Businesses from Singapore are most confident about the potential to build a regional platform in South East Asia as the base for later global expansion (see Figure 7). However, only half or less of the survey respondents from other large South East Asian markets see the region as offering this potential. Instead, they are targeting Asian or global markets more broadly, or are focused on opportunities at a country level.
Scale opportunities are possibly overshadowed by the perception that the integration of South East Asia into a single market is still in its infancy.This reflects the region’s diversity in terms of economic development and market sophistication.
Even without having realised scale to date, companies are likely to keep expanding in South East Asia. The desire to grow is strong as businesses continue to seek access to new and more stable growth markets. This will help them reduce exposure to volatility in their domestic economies or the global economy as a whole.
Many leaders have recognised the opportunity in South East Asia and have moved aggressively to establish their regional leadership. The question is whether other companies are ready to travel the distance.