4 Things to Consider When Choosing the Best Asian Country for Business Expansion
This article discusses the business benefits of Singapore, Hong Kong, Indonesia, Malaysia, the Philippines, India and Vietnam.
Opinions expressed by Entrepreneur contributors are their own.
Expanding a business into Asia can be daunting, and there are many factors to consider before making your decision. For example, Singapore is ranked the second easiest place in the world to do business, and is also one of the best cities for expat quality of life, according to ECA International rankings.
On the other hand, if you're looking for more affordable options, then Malaysia might be just what you need with low labor costs; or maybe Singapore offers better corporate tax rates. Whatever your choice may be, it is always worth doing thorough research before making your decision on where your new Asian business base is located.
With that being said, let's take a look at four things you need to consider when determining the best Asian country for your business's expansion.
Local markets can have a huge effect on the success of an international business. It is important to understand the customer base before deciding where to start your business. For example, Asian countries such as Japan and China will offer different market dynamics than those found in Malaysia and Singapore.
The local market in any Asian country will be open to what you are offering if you take into consideration the culture, values and sentiments of that population. The idea of being able to provide an opportunity for people may well be what helps with customer satisfaction and loyalty.
This will eventually help increase the potential for a successful company if you can relate to what is best for the local community. For most Western companies, places like Singapore and Hong Kong are going to be more aligned with Western norms and sensibilities.
Local infrastructure and funding are other important considerations when looking at where to expand your business. Finding out what sort of resources are available in the country will go a long way to helping you determine if it is worth starting up there.
For example, Singapore has a very well-developed infrastructure for new businesses. As well as being ranked second in the world for ease of doing business, it is also ranked as the world's freest economy. This is largely due to a long history of forward-thinking government policies and initiatives, designed to attract overseas investment.
Other countries, like Malaysia, India, Vietnam and the Philippines, are also starting to rapidly expand their infrastructure to attract investment from overseas. Indonesia is also making strides, with its recent positive investment list, allowing foreign investors to access sectors that were previously restricted or forbidden.
Generally speaking, the likes of Hong Kong and Singapore will have the stronger infrastructure, if only for their long-standing interest in being a traditional center for overseas investment.
Depth of the talent pool
Ideally, you want a local workforce that will be available to help grow your company. In order to find the best talent base for a company, it is necessary to do some research into other businesses within the country and how they have been able to recruit employees. Comparative wage rates from large and small companies will give you an idea of the working conditions in that country.
The availability of skills should be a key concern when considering a business relocation to Asia. Singapore has the most highly skilled workforce in Asia and offers some unique advantages to international businesses looking for skilled labor. Malaysia also offers a strong entrepreneurial spirit that promotes innovation among its citizens. India is well known to be the base of many highly skilled and educated workforce.
If on the other hand, you are only looking for a low-cost labor force, countries like Indonesia, Vietnam and the Philippines will be more in line with your goals.
Culture, language and life
The final part of the puzzle may not be directly associated with business success, but it certainly affects things on a holistic level. Culture and language can be difficult for some businesses to overcome when opening in a new country. It is important that you have some understanding of the culture of the country, as well as which languages are spoken.
Some Asian cultures might have some strong barriers, particularly in terms of language. Countries like Vietnam, the Philippines and Indonesia may have rapidly growing economies, but English is far from well spread. Places like India, Hong Kong and Singapore on the other hand have English as an official language.
In terms of culture though, Hong Kong is rapidly falling out of favor with Westerners due to Mainland China's influence. On the other hand, Singapore is internationally renowned for its excellent expat quality of life.
Choosing the right Asian country for your business expansion can be a difficult decision. It may seem like you are choosing between countries with similar statistics, but there are differences outside of the numbers that might make one more suitable than another.
Asia is the world's oyster for innovation and expansion. Get in on the ground floor of rapidly growing, but relatively young markets like Vietnam or Indonesia, or go with the likes of the tried and tested Singapore — it's your choice.