The impact of the humanitarian crisis has affected every corner of the world. The lockdown has resulted in a slowdown of the economy and has brought out flaws in different sectors. It has also raised some questions, such as the sustainability of a country’s infrastructure & risk management of national institutional. But as we are adapting the new normal and adjusting to the uncertainty, we see western countries domination taking a backseat and Asian countries building its position globally.
Though China has been unquestionably affected due to its lack of responsibility & leadership; countries like Japan, India, South Korea & Singapore are coming into power. Even countries like Vietnam & Indonesia’s proactive efforts and deepened strategy trade reforms have attracted many companies to invest, trade and set-up their manufacturing unit.
As we dive deep & look at the sectors, there are some findings that we have:
1) Sectors like travel, hospitality, events, restaurants and retail shops will face huge headwinds as they were shut down fully at the inception of the lockdown. These sectors would have to manage cash, track consumer behaviour and rethink for new models to survive until everything becomes normal.
2) Not all the industries have been hit at the same level. Due to the high demand of various services and offerings, some industries such as telecommunication, information technology, online education platform and food delivery have been benefited by strong tailwinds and which also is leading to expansion and new startups.
Overall tailwinds and headwinds in the current scenario are affecting the investment landscape & developing countries in Asia. This is also leading to digital integration and hence opening up new sources in these countries, which will eventually help these places in attracting multinational companies.
Let’s learn about the benefits that these global winds are bringing with them.
All the Asian countries are at a similar stage when it comes to the benefits of tailwinds. There are four common tailwinds that will act as an antidote to Asia’s economy:
Demographics are one of the important tailwinds for Asian countries. The labour force in India, Indonesia, the Philippines and Malaysia will significantly grow and hence it will lead to a rise in per-capita disposable income. Digital advancement will act as an advantage for the economy as it will serve the unserved consumer demands effectively
The second tailwind that will benefit will be sustainable and developed infrastructure, which will also help the countries in post-COVID-recovery. As per world economic forum developing countries with low & middle-income countries will be able to see ‘$4 return for every $1 spent on building infrastructure.’
Asian countries need to strengthen their supply chains and make it more stable for future collisions. It will be the only way where this pandemic will act as a silver lining to developing countries. Somethings that these developing nations should focus on are :
1) Starts engaging in regional dealings
2) They should try to overcome supply chain redundancy
3) Shorten the span between stated supply chains.
4) And also become more technology oriented
Growth of Asain Corporates:
Asia’s alternating position within the organisations such as speeding the process of developing a product ( speed to market ), improving their visibility and good coordination across the value chain has reflected a rapid revolution in the growth of these companies. You see growth is certainly not occurring just on the demand side, but it is occurring on the supply side as well.
Many Asian companies have ranked among the top companies in the Fortune Global 500 ranking. Asia has shared over 20 per cent in the list of top companies over the past two decades.
Power of Asain Consumer
Asian consumers are one of the most important tailwinds for Asia right now. Due to the majority of the labour workforce being from Asian countries, there will be a billion people who will be soon moving towards consuming class and will start spending on commodities that they desire.
What is more important to understand is that even though Asian consumers have a strong preference for foreign luxury goods & brands. The post 90’s generation is starting to choose more domestic brands over foreign brands. Asian brands need to have more defined strategies if they want these tailwinds to work in their favour.
We don’t deny that customer behaviour has transformed drastically all around the world in the past couple of months. But the Asian countries need to determine the headwinds to recover from the change. They need to ask questions such as:
- What are the external forces that have made customers change their habit?
- What condition or methods can get implemented to retain the customers?
- And how can you bring the lost customers that you lost due to COVID-19?
- How can localization help and maintain relationships with the neighbouring countries?
Asian companies will be next big names only when they take full benefit for these tailwinds. The companies should make plans that can strategically help them in localisation and position themselves where their supply chain is robust. Companies must train their employees in adopting technology and create AI-driven workflow to make use of resources and budget efficiently.
For more updates around trade news and policies follow GlobalFair. The company is an experienced sourcing company and has a well-built supply chain in the Infrastructure sector. We are working directly with 10,000+ factories in India, connecting businesses from all over the world to quality goods at guaranteed best rates.
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