ASEAN: A Billion-Dollar Burgeoning Marketplace

The ASEAN economy, one of the fastest growing in the world, is expected to reach $3 trillion by 2020. Accenture Strategy forecasts that over the next five years, 60 million people will become part of the region’s consuming class, with the means to purchase goods beyond subsistence for the first time!

Robust consumption fuelled by a rapidly growing consumer class, rising incomes and urbanization will generate $770 billion in new consumer spending in the ASEAN region over the next few years, according to a new report from Accenture. This is creating tremendous new business potential for consumer packaged goods (CPG) companies if they can tap into burgeoning consumer demand by applying digitally-driven strategies to reach the increasingly connected ASEAN consumers.  
 

According to the report, “ASEAN’s Limited Time Offer: 100 Million New Consumers to Win and a $770 Billion Reason to Move Now,” rising disposable income will propel an additional 40 million people into higher income tiers by 2017, enabling them to trade up to premium products.
 
The report notes that the CPG industry’s growth in the region, forecast to increase by nine percent annually to $220 billion in 2017, will be enhanced by the formation of the ASEAN Economic Community (AEC), which is scheduled to take effect this year.  One of the expected benefits of the AEC is to enhance the region’s appeal as one of the world’s most attractive consumer markets by making it easier for companies to do business across country borders within the region.
 
“The spectacular growth of the ASEAN economy represents one of the biggest opportunities on the planet for consumer goods companies today,” said Dwight Hutchins, a managing director, in Accenture Strategy, Asia Pacific. “All that growth, however, means that markets are changing very quickly while digital technologies lift expectations for more tailored and engaging consumer experiences. Companies that hope to compete for new consumers must be bold and move fast if they are to take advantage.  The best advice for CPG companies entering or expanding in the region can be summed up in four words – be aggressive, move now.”
 
According to the report, while CPG companies have a singular opportunity to turn millions of ASEAN consumers into loyal customers over the next few years, these business face distinct challenges, from delivering products across a physically fragmented landscape, to winning the loyalty of rapidly changing consumers.