is part of the Informa Markets Division of Informa PLC
This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Contributed by Asialink Business
With fast growing economies and expanding middle class societies, Southeast Asia represents one of the most promising pharmaceutical markets worldwide.
Home to 650 million people, the 10 ASEAN (Association of Southeast Asian Nations) countries that form Southeast Asia – Brunei, Cambodia Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – are collectively amongst the leaders of global economic growth at around 5%.
The region is set to become the world's fourth largest economy by 2030, driven by urbanisation, growing consumer classes, innovation and digital disruption, and deepening integration and connectivity. These trends are also driving strong and sustained demand for improved access to healthcare and quality pharmaceuticals. In Thailand, for example, the domestic healthcare market is already worth over $30 billion and growing.
But international pharma businesses looking to expand into Southeast Asia can confront many challenges. A nuanced understanding of the unique local market, business environment, regulations and sales and distribution networks, amongst other considerations, is essential.
While there is no one blueprint for success, here are several key tips to consider.
Seek opportunity in diversity
Southeast Asia is a complex and diverse region, and no two markets are the same. While the region is moving towards closer integration, considerable economic, cultural and political diversity exists between and within the 10 ASEAN countries. For example, in the World Bank’s 2020 ‘Ease of Doing Business Report’ Singapore ranked as the second best country in the world to do business (after New Zealand). Malaysia and Thailand also performed well (at 12th and 21st place), while the lesser developed Southeast Asian economies of Laos, Cambodia and Myanmar all ranked well below the top 100 countries globally.
This diversity means businesses need to carefully assess the opportunities, risks and benefits each unique Southeast Asian market presents. This includes looking at second-tier cities and sub-regions, many of which are likely to experience significantly rising consumer power.
These decisions on which markets or sub-regions to prioritise can affect everything from local regulatory requirements, to potential business structures, sales and marketing, consumer preferences and many other business practicalities.
Accommodate cultural differences and invest in relationships
It’s important to take time to understand the unique local culture and prepare before meeting local business partners, customers, distributors or suppliers. For example, in Thailand, respect, loyalty and trustworthiness are cornerstone that underpin business relationships. ‘Maintaining face’ is also important, with anger and even mild irritation to be discouraged.
Building strong relationships will usually take time and extensive ‘face to face’ interaction. International new comers will also need to invest in following-up and maintaining connections (conferences like CPHI can provide a good platform).
In Thailand, as in a number of other Southeast Asian markets, nuances such as age and seniority also come into play, with careful consideration needed for factors like age, gender, education, hierarchy and status when building relationships. (More practical tips on how to navigate these differences are available here).
Do your homework
Given the region’s complexity, it is essential that international pharma businesses considering entering Southeast Asia undertake thorough research and market development planning.
It can be valuable to speak to industry experts, connect with other international companies operating in market, attend industry events and seek professional advice.
Covering all 10 Southeast Asian markets (and 16 distinct Asian markets in total), Asialink Business, Australia’s National Centre for Asia Capability, has developed a suite of Country Starter Packs. These guides provide a comprehensive and practical roadmap for businesses looking to enter or grow in new Asian markets.
Featuring practical case studies, up-to-date market insights and first-hand industry perspectives, the packs are an accessible 'how-to' guide, covering business essentials on how to get started, structure your business, understand local regulations and sales, marketing and distribution channel, navigate cultural differences, and more.
And when armed with the right tools, insights and planning, there has never been a more opportune time for internal pharmaceutical businesses to enter and grow in Southeast Asia’s diverse and growing markets.
Asialink Business provides tailored supports for organisations looking to enter and grow in Asian markets, with strategic Asia advisory services, market insights, capability development and training, and events and professional networking opportunities. For more visit: https://asialinkbusiness.com.au/