Winds of change threaten Asia Pacific businesses

According to the Nielsen report Asia 2020 Progressing, Prepared or Pessimistic, which sought opinions from senior leaders across the Asia Pacific business community on the winds of change, eight in 10 believe that they will have to conquer major change in the next five years.

Altering consumer preferences, regulations, taxation policies, as well as legislative or political changes, economic development, and new competitors are among the events most commonly anticipated by the business community.

“The pace of change is accelerating, and nowhere is that pace more exponential than in the Asia Pacific,” said Regan Leggett, Nielsen’s executive director, Southeast Asia, North Asia and Pacific.

Regardless of the nature of such challenges, the survey warns that businessmen in the region are not yet ready to tackle change. Specifically, 43 per cent of respondents are not confident that they can spot early indicators, while a massive 78 per cent feel that they will have to significantly alter their business models in five years to keep pace with the change. Moreover, six out of 10 leaders feel threatened by innovative competitors.

Despite the difficulties on the horizon, the majority of business leaders (58 per cent) from across the region believe that trade agreements, such as the ASEAN agenda or the Trans-Pacific Partnership (TPP), will have a positive impact, while one in three believes it will have little or no impact on the business environment in the future.

Regional and cross-country agreements, such as the ASEAN Economic Community or the TPP, and other bilateral/unilateral exchanges are already being discussed and implemented, which will allow organisations to compete in more countries, regardless of their origin. Those previously enjoying a protected industry or marketplace will have to face local competition, while others will be able to look for expansion opportunities in other markets.

Among leaders looking to expand their businesses in new, dynamically growing overseas markets, Vietnam, Indonesia, and China are the most common priority targets.

In addition, eight in 10 respondents anticipate technology to influence business organisations. Half of the business leaders believe e-commerce will contribute 30 per cent or more of their organisation’s growth by 2020, and a further 32 per cent think e-commerce will capture more than 20 per cent of total sales for their organisation over the next five years.