22 Sep Warning! Challenges for foreign players
Despite the advantages, several Western companies fail to get a toehold in ASEAN.
For all its attractions, many European and American companies who enter ASEAN markets fail. Many of them are unable to make headway in the chaotic markets in Asia. They do not take the right decisions decisions, they are unable to deal with the complexity of local regulation and rapidly changing policies, they form alliances with the wrong partners who take advantage, they fail to forge strong relationships with local business and government communities. Many such companies fold up and head back home after a few years of disappointment and non-performance.
Despite the vibrancy and potential of ASEAN markets, there are some real challenges. The most significant issues faced by companies from developed markets include not being offered the same advantages as local players by many of the governments; opaque, difficult to comprehend, sometimes conflicting and often changing rules and regulations; scarcity of skilled and talented human resources in local markets; lack of documents in English and unreliable translation services; lack of deep relationships with the local business community and government officials and finding the right partners.
Even if or when the foreign company’s local JV subsidiary has got to grips with local realities, there’s often difficulty explaining local issues and requirements to the distant head office that operates in a totally different business environment. Click here to read what NOT to do in ASEAN while investing.