As businesses face the darkest recession in living memory, Southeast Asia (SEA) is where the world’s largest companies are hedging their bets. Business optimism here is refreshing, shining a light on a region coming into its own.

“Its exploding trade channels, diversity in demographics and cultures make it such an opportunity to serve, from a purpose standpoint, more consumers than probably anywhere else in the world,” shares Mr Magesvaran Suranjan, Procter & Gamble (P&G) President for Asia Pacific, Middle East and Africa.

He was speaking at a recent webinar by the Singapore Economic Development Board, joining other business chiefs to discuss why, despite global uncertainty, there is no better place for businesses to be than SEA.

The full panel line-up:

An economic powerhouse that can’t be ignored

Businesses remain bullish about growth in SEA, thanks to its sheer market size and demographics. SEA’s 10 countries are home to the third-largest population in the world after China and India. In the next 10 years, SEA’s economy will overtake the European Union and Japan, ranking only behind China, India, and the USA, creating the fourth largest economy globally by 2030.

EDB’s Dr Beh Swan Gin notes that SEA’s rise is powered by the growth of its middle class, a trend that bodes well for long-term business growth.

Digital consumers here are defining the future 

Google’s Ms Stephanie Davis describes how SEA’s favourable demographics and rising connectivity are driving a dynamic digital economy. “What may not be readily evident is that this region is defining the future of the digital ecosystem.”

She adds, “Pre-COVID-19, we had already seen the digital economy taking off here in SEA. We have more than 360 million consumers that are digitally connected, and 100 million of these came online in just the past four years.” 

This has led global tech players to study SEA’s digital space keenly. Google, for instance, is betting on Asia for its next billion users, and has released figures that show SEA’s digital economy tripling between 2019 and 2025 to hit US$300 billion (S$410 billion).

As a result, tech startups and digital-ready businesses continue to have the perfect opportunity to flourish and expand in SEA. Rakuten, TikTok and Zoom are just a few of the major tech players that have announced expansion plans in the region this year, joining the global tech pivot towards SEA.

Ready launchpad for go-to-market innovations

SKII RNA Power, Pantene Micellar and Vicks Baby Rub – these are some well-known P&G personal care products developed right in P&G’s innovation centre in Singapore, the heart of SEA.

“We’re investing in digital capabilities and all areas of the new economy, and we’re aspiring to serve not just the SEA consumer, but the global consumer, from Singapore because of the strategic location as well as the innovation and talent ecosystem here,” says Mr Suranjan of P&G. 

SEA’s 10 diverse and interconnected countries place high in global innovation rankings, offering advantages to companies diversifying their growth.

In the Global Innovation Index 2020, Singapore ranks 8^th in the world and 1^st in Asia, while Thailand comes in top globally for business research and development. In high-tech net exports, Malaysia ranks 1^st globally, while Vietnam has consistently performed well in business and market sophistication as well as innovation output for the last decade.

A region synergised for resilient economic growth

But SEA isn’t just known for the potential for innovation. Its strengths in manufacturing also ensure that businesses can take products from idea to reality. 

With “the ports, talent, labour force and infrastructure for efficient production,” P&G’s highest-performing plants are in SEA, shares Mr Suranjan. The region’s proximity to global markets also allows the consumer giant to supply markets in the Pacific and the Middle East from its production facilities in SEA. 

SEA’s wealth of diverse natural resources also ensures fairly resilient economic growth because the region is not dependent on any one sector, notes Dr Beh.

In addition, the ASEAN Economic Community is reinforcing the region’s flow of trade, people and ideas by harmonising industry, manpower and accreditation standards. Greater synergy strengthens bargaining power for the bloc, a bonus for companies searching for alternatives to neighbouring superpowers.

SEA’s promise shines brightly

Amidst the darkest recession of our times, what are SEA’s future prospects? 

Dr Beh offers a heartening verdict: “We are blessed because there are very powerful forces in our favour – demographics, urbanisation – that will give us some breathing room to learn from what’s happening around the world.”

Mr Suranjan is equally enthusiastic about the region’s prospects. “We’re building a legacy of better products, better partners, better people. I believe SEA is the launchpad to do just that.” 

Ms Davis affirms this positive outlook: “Looking forward, we definitely are here for the long term. We are committed to SEA and investing for the long haul.”