WITH so many of the world's economies characterised by slow growth, Asean represents one of the largest opportunities today for companies in many sectors ranging from consumer goods and services, retail, aviation, automotive to logistics. Robust consumption is driven by favourable demographics, rising incomes, rapid urbanisation and ongoing economic growth across the region.
According to Accenture's research Asean's Limited Time Offer: 100 Million New Consumers to Win and a US$770 Billion Reason to Move Now, by 2020 the Asean economy is estimated to reach US$3 trillion and new waves of consumer spending growth are expected to inject US$770 billion a year of incremental sales into the market.
As the region's most developed country and fourth largest economy, Singapore will be worth at least US$340 billion by 2020. Singapore is also the region's wealthiest country on a per capita basis with rising incomes, and consumer spending is expected to grow 6 per cent annually to reach US$176 billion in the next five years.
For the first time, millions of entrants to the emerging middle class will have disposable income, while wealthier consumers - particularly in Singapore - will be able to trade up to premium or luxury products that offer convenience, status and quality.
This is creating tremendous new business potential for companies if they can tap into burgeoning consumer demand by applying digitally-driven strategies to reach the increasingly connected Asean consumers, especially in Singapore.
However, many companies face distinct challenges from delivering products across a physically fragmented landscape to winning the loyalty of rapidly changing consumers.
In Singapore, highly-connected consumers have a growing tendency to switch brands and products, with only 15 per cent of Singapore consumers loyal to specific brands - an indicator that some three-quarters of consumers are potentially up for grabs and vulnerable to switching to competitor products.
Added to these factors, companies need to distinguish their brands and products in a highly competitive and diversified environment.
Winning in Singapore and the wider Asean region will require companies to find emerging and upgrading consumers, understand them, and connect with them by delivering messages and products that speak directly to their needs and aspirations.
Creating awareness of products and locking in future demand by building loyalty requires engaging new consumers early, often and with precision. Gaining deep customer insight through the use of digital technology and analytics will be critical to success.
Digital applications are proliferating and creating extraordinary new experiences for consumers. Mobile and social media must be integral to any engagement strategy from the start to drive awareness, stimulate trials, and create relevant and valuable interactions that build brand loyalty.
Getting and keeping products on the shelf is highly dependent on the right relationships with reliable retailers, distributors and wholesalers. Smart companies need a network to reach all markets, whatever their shape and size.
This will require improving the productivity and reach of the sales force as well as superb logistics management to ensure coverage across complex, multi-layered distribution channels. It will almost certainly require strategic partnering in local markets.
A winning consumer products strategy also relies on an operating model that both drives scale and efficiencies, and maximises agility and local insights. Companies will need to recalibrate these complementary components as their reach in Singapore and Asean expands.
With the projected pace of growth, there is a growing concern that the demand for highly skilled talent in parts of Asean is outstripping supply. To address this, regional centres of excellence are being developed by savvy companies to ensure that a stream of talent will fill talent gaps and improve capabilities of local teams.
Seen as a regional hub for many multinational companies, Singapore is also considered an ideal test market for new products before they are launched in other Asean markets. In the past 10 years to 2013, Singapore enjoyed a 141 per cent growth in inbound investment for the consumer goods and retail industry.
These are critical first steps to seizing the enormous business opportunities arising from the nearly 100 million new and more affluent consumers who will inject more disposable income in the region's economy every year.
Winning their loyalty demands rapid execution of a clear plan while having the flexibility to contend with the region's enormous diversity, fragmented geography and rapidly changing consumer behaviour. Companies that act fast will elevate growth and lock in a sustainable advantage in Singapore and across Asean.