A generational shift in Asia is working to the advantage of those small and medium-sized enterprises that are tuned into the change in consumer trends.
When I last discussed Asian small and medium-sized enterprises (SMEs) in 2006, the main challenge I highlighted was that few dared to venture beyond their domestic markets. However, times have changed. The 2008 recession and the 2010 aftershocks hit many SMEs hard, but they also brought new opportunities to other businesses.
On the macro level, SMEs are working hard to ensure their productivity is sustainable and that they can keep up with evolving trends. Increased regional integration in Asia has brought greater market opportunities. Intra-Asia trade barriers have decreased, as new free-trade agreements have been enacted. Regional economic conditions have improved and access to finance has become much easier. More Asian SMEs are now able to access credit facilities with much more ease. As a result, more Asian SMEs have begun venturing beyond their smaller domestic markets. Although Asia is home to an ageing population, it is also home to a highly educated and technologically savvy workforce, with large household incomes.
The spread of information has been accelerated by social media, and working patterns have been transformed by technological innovations such as broadband. Travel across the Asia region has accelerated due to increasingly affordable air travel from budget carriers. As a result, trans-Asia labour migration has increased.
Moreover, Asia is home to a 'strawberry generation' – a group of upwardly mobile Asians who are well connected – of which there are estimated to be about 660 million. As more people are exposed to a more Western education, Asia's core customer base is transforming. As more people are exposed to Western media and culture, their consumer habits are changing. Although younger Asians are still heavily influenced by their conservative parents' habits, their attitudes when it comes to fashion, travel and business start-ups are changing. These are fundamental Asian characteristics, which any strategic planner and marketer must recognize when doing business in Asia.
Retail products such as higher end luxury and fashion brands, consumer electronics, small-unit cars and apartments continue to sell well across Asia. Thus the outlook of Asian SMEs will depend on the extent to which they can keep up with these emerging trends, in order to satisfy Asia's new strawberry generation.
Lawrence Yeo is CEO and principal consultant of AsiaBIZ Strategy, a Singapore-based management consulting firm providing Asia market research, business strategy development and export/FDI promotion services. Website: www.asiabizstrategy.com
Lawrence Yeo
