While Asia has long been a key area for consultancies to expand into from other parts of the world, it doesn’t mean that this diverse region is not still full of surprises. For example, McKinsey research stated that by 2025 more than half of the world’s consuming class, i.e. those with an income of more than $10 a day, will live within a five-hour flight of Myanmar. Considering the region’s resilient growth and the industry pressure to globalize, many ambitious consultancy owners or founders will have considered expanding into the region.
For those who are moving beyond just thinking about such a move, here are three tips from Equiteq’s Asia Pacific team on doing business in the region:
1. First of all, there is no such thing as Asia Pacific (APAC). Broadly speaking, we can identify five sub-regions: South-Asia, South East Asia, North-Asia, Australasia and Greater China. Even inside these sub regions there are strong historical, economic, political, linguistic or religious differences which mean that you can’t simply take the same approach to business in one region as you would in another. To take one example, Singapore’s GDP per capita is more than 50 times that of Cambodia or Myanmar, although they are both part of the Association of South East Asian Nations (ASEAN). Applying a one size fits all strategy would mean grossly neglecting the lesson of KFC’s success in Greater China, i.e. the importance of adapting the formula to the local landscape.
2. While no single business culture exists, there are sometimes common challenges in the region around charging for services and solutions, as opposed to charging for a product. The price often matters more than the service and sometimes potential clients want to discuss prices before even going into what services are really being sold. Clients are frequently very interested in lots of discussion without necessarily committing to a contract, so it’s important not to fall into the trap of consulting for free.
3. Talent scarcity is increasingly being highlighted as the main business concern by regional consultancies. This comes partly from the young history of development but also from a political trend toward lower acceptance of immigration, including white-collar immigration and an increasing tendency for people to job hop. This picture is especially stark in Singapore and China, where new resident-favouring legislation makes it harder to employ foreign staff. This means locals are increasingly sought after and tempted to change jobs regularly for better offers. In an industry where a large part of the value of the firm lies in its people, this constitutes a significant issue.
Being aware of these challenges is one thing, but planning on how to address them during an expansion into APAC is quite another. In our next Asia Pacific blog we will look at five ways to maximize the chances of success in this region.
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