SMART operations, digital solutions and regional expansion are three strategies that mid-sized companies in Asean must adopt to continue growing in the face of disruption, according to a Standard Chartered report on April 8.
Titled ASEAN – a region facing disruption; positioning mid-corporates for growth in Southeast Asia, the report looks at challenges and strategies in the sectors of manufacturing, retail and consumer, and infrastructure. Commissioned by Standard Chartered and carried out by PwC, it defines mid-corporates as having annual revenues between US$10 million and US$500 million.
Asean's main internal growth challenge is its low labour producitivity, which lags significantly behind the world average. The main external challenge, meanwhile, are global uncertainties that increase risks for the region, which is highly dependent on external trade. Extra-Asean trade accounted for 76.5 per cent of goods exports in 2017.
Smarter factories and supply chains are the key to moving forward, said the report, identifying technologies such as industrial Internet of Things (IoT), 3D printing, and blockchain-enabled contracts.
In a regional survey conducted in 2017, 70 per cent of Asean businesses indicated they were exploring IoT adoption, while 14 per cent had already completed IoT implementation.
Retail and consumer
With the rise of e-commerce and a growing range of options, corporates must improve digital distribution and marketing, said the report. Logistics solutions include digital inventory management, warehouse automation.
At the frontend, digital solutions include 'micro-segmentation' for a better understanding of consuemrs, and digital touchpoint technologies such as augmented reality apps and virtual trial rooms in offline stores.
Asean has a pipeline of over 800 projects to address its significant infrastructure gap, meaning many opportunities for both large local infrastructure players and mid-sized corporates who can be part of the wider project supply chain.
If mid-corporates are to participate in large cross-border infrastructure projects, regional partnership is key. The report recommends creating a "regional capability framework", identifying the capabilities they need and determining how to develop them -- whether by building them organically, gaining them through partnerships, or 'buying' them through mergers and acquisitions.