Top research ideas for trading in Asia7th Nov '16
Knowing your market is crucial. As part of the Routes to Growth series on doing business in Asia, Andrew Cave explores the best way to go about it
Research is key to preparing to do business in south-east Asia. But where should companies begin in their quest for knowledge?
There are many sources and they vary country by country. But as a starting point, UK Trade & Investment (UKTI) recommends firms choose target markets by looking at:
- their economy
- their culture
- their political stability
- whether they host a critical mass of sector players
- whether they offer potential for UK products
UKTI can suggest local representatives in chosen territories. Designer Kelly Hoppen says this was instrumental in helping her research China, Vietnam and South Korea.
- the Federation of Small Businesses
- the Forum for Private Business
- the British Chambers of Commerce
- the Confederation of British Industry
Country-specific information can be obtained from embassies, consulates and foreign trade services, as well as pan-Asian organisations such as:
- the Confederation of Asia-Pacific Chambers of Commerce and Industry
- the Southeast Asia Business Forum
- the Association of Southeast Asian Nations (Asean)
Sources of detailed information vary by country. In Indonesia, the local British Chamber of Commerce suggests using the Overseas Business Network, contacting the London representative of the BKPM (the Indonesia Investment Coordinating Board) and regularly consulting the chamber’s Up.Date Magazine.
“Researching the market is key in ensuring your business has the room for growth in the country,” says Chris Wren, Indonesian chamber chief executive.
“Taking time to understand the legal and tax framework before launching in the country and working with the BKPM will help considerably.”
The Export Britain website, run by the British Chambers of Commerce, meanwhile, offers a webinar on doing business in the Philippines, as well as information on a trade mission aimed at understanding e-commerce opportunities in Shenzhen, China and Hong Kong.
In Cambodia, Olivia Widen, executive director of the local British Chamber of Commerce, advises contacting the UK-Asean Business Council and the Council for the Development of Cambodia. The big five UK accountancy groups are also good sources of guides to doing business in Cambodia.
“The importance of networks in Cambodia cannot be over-estimated because information is not consolidated or always up-to-date.”
Andy Ho, managing director of VinaCapital's Vietnam Opportunity Fund, advises contacting the British Business Group Vietnam and the European Chamber of Commerce for information and resources to do business in the country.
He says: "Vietnam is different from some countries in the region in that it is more stable, politically and economically.
"In terms of actually doing business or investing in Vietnam, what is probably most useful for SMEs is to have a trusted and experienced local partner on the ground who can help them fully understand the market and its opportunities."
That advice is supported by some of the companies profiled in Routes to Growth. Davanti Tyres, Coborn Engineering and The Cambridge Satchel Company recommend making connections on the ground and undertaking research visits.
Trade delegations can be an effective route. The British Chambers of Commerce, UKTI and the big banks run trade missions to introduce SMEs to key contacts, help build connections and secure deals. Some missions can be subsidised.
If possible, try to coincide visits to potential south-east Asian markets with trade shows of relevant sectors in the region. These can pay dividends.
Will Butler-Adams, chief executive of Brompton Bicycle, says: “It doesn’t matter if you’re making tiddlywinks or folding bikes, there is a trade show. Time your visit with that and you’ll learn loads.”
Trade shows in south-east Asia are advertised on websites such as www.eventseye.com and www.asiaexhibitions.com.
An internet search will also pull up plenty of consultants advising on doing business in south-east Asia, especially in China, though free help can be found if British firms do their own legwork.
Eventually, though, every business has to find its own journey of discovery in south-east Asian markets. Bonnie Roupé founded the pregnancy e-health company Bonzun by doing just that.
Roupé discovered a 1980s project on Chinese maternal care that had recommended better quality medical information in the country. She tracked down a Swedish academic who had done part of the research and paid for him and his wife to return to China to introduce her to former colleagues on the initiative.
Roupé also held lots of focus groups. “It made me realise I had to look at the market very differently to my Chinese e-health competitors.”