1. ASEAN - The Charm of the Consumer Market for Japanese Companies
South-East Asia features a population of around six hundred million people and recently has been growing economically at a rate of around 7%. According to the IMF, this region is projected to see an average growth rate of 7.5% in the coming five years as well. As such, Japanese companies are not just looking at this region for manufacturing based on cheap labor, but also have their sights on South-East Asia as an expanding consumer market.
With especially the expansion of both purchasing power and the consumer market itself, companies around the world have been quick to enter into and expand within the ASEAN markets.
For Japanese companies that are going to be looking for continuous growth in the future, the expansion of operations in the ASEAN region in parallel with the increasing purchasing power and growth of that market will give them a potential source of growth and is an important thing to consider in terms of corporate strategy. Here, the best way to go about acquiring the required resource for starting businesses and for expanding in the region is through an M&A (acquisitions, partnerships and joint ventures) transaction with a local company.
2. NEXT ASEAN: Turkey as a Gateway to Africa, the Middle-East and the CIS
In the next three to five years, Africa, the Middle-East and the CIS (Commonwealth of Independent States), which we've dubbed the "NEXT ASEAN," are projected to see immensely quick growth as a result of a the expansion of the labor and consumer markets due to the characteristics of these regions as abundant in both natural and human resources.
There are more and more companies now in Japan that are looking beyond ASEAN to this market for their next round of business expansion.
In the future Turkey will not only be a gateway to Europe but will also evolve as a gateway to the CIS, Middle-East and Africa. An economic zone will form where business is conducted amongst companies in these regions and countries wherein Turkey will function as the center for commerce. Here, Turkey is projected to act as a center where people, products and money are all exchanged.
In the next three to five years, Turkey is going to become a gateway to the CIS, African and Middle Eastern markets. It is going to be the gateway to NEXT ASEAN. The best way to get into these markets is through an M&A transaction such as a purchase or partnership with a local company in Turkey.
In the long term there are to be drastic changes happening in terms of business environments resulting from globalization as well as the shrinking of the domestic market due to the shrinking of the population (low birth-rates and aging of society). In the short term there are issues such as price competition. Thus, companies that have up until now only been focusing on the domestic market will need to expand beyond Japan's borders if they are to survive.
For clients who are thinking about expanding into these growing emerging (consumer) markets, we at AIBJ provide cross-border M&A services from our offices in Japan, ASEAN, Istanbul and Hong Kong as well as overseas market surveys and investigations that take place before a company decides they want to expand overseas.
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