Theres

No Such Place as Asia Pacic

10 key insights about the region for the global business execu=ve

What in the world is Asia Pacic?

While technically the Middle East forms part of Asia, most organiza>ons a?ach that area to Europe for pragma>c reasons Commonplace deni>ons see Asia = Pakistan to Japan to Indonesia Asia Pacic includes Australia, New Zealand and Pacic Islands Half the worlds surface area Half the worlds popula>on The worlds two most populous countries (China and India) The country with worlds largest Islamic popula>on (Indonesia) Four known nuclear powers (China, Russia, India, Pakistan) Democracies through to communist states to military dictatorships

Whats the issue?

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The region is so diverse, complex and with such li?le in common, it simply doesnt exist in a meaningful sense And yet global organiza>ons must nd a way of managing this, and so they oSen will express Asia or Asia Pacic as a consolidated region from a nancial repor>ng and management perspec>ve Its easy for people who dont know the region well to then start to think of it as a region that has some consistency or homogeneity This misconcep>on can impede an organiza>on from fully capturing the opportuni>es in the Asia Pacic region, or making mistakes that cost >me and/or money This misconcep>on is not limited to execu>ves from outside the region especially North America and Europe but oSen exists among senior management within the region, who may s>ll perceive things through the lens of their own culture or personal experience While no-one can become an overnight expert and few would claim deep knowledge of every facet of the region, there are 10 key insights an execu>ve needs in order to have some framework of understanding Asia Pacic

Understand these 10 key points; be aware of them as you go about your business; reect on them as you seek to understand why certain things occur; and avoid the obvious pi<alls they warn against. It wont guarantee success, but it will make it more likely!

1. Distances and travelling >mes

Up to 8 hours >me dierence between Karachi and Wellington Distances and travel >mes oSen not well understood outside the region East coast Australia from/to China, Japan, SE Asia 7-10 hours ying >me, Japan/China to India similar, India to Australia 15-20 hours Even from central loca>on such as Hong Kong or Bangkok, ight >mes can be 3-6 hours intra-region Local travel to/from airports is challenging in many loca>ons The most nancially signicant markets for most companies lie on the rim of the region making it more dicult to avoid travel The typical execu>ve covering this region will spend considerably more >me travelling than his/ her counterparts in other parts of the world

2. No common culture
There is no such thing as an Asian culture there are a mul>tude and oSen have very li?le in common Some things that appear to be in common should not lead to the assump>on that everything is similar What has been learned and is appropriate or may work in one market may be inappropriate elsewhere Cultures, and an individuals iden>ca>on with their cultural heritage, can be very specic and failing to recognize this is likely to be detrimental to a rela>onship This is also reected in the business cultures which can vary signicantly across the region, determining what is acceptable or expected behaviour and what is not

3. No common language
While Mandarin is the ocial language of China and spoken extensively, it is not commonly used for business outside the Chinese ethnic community There are many Chinese dialects, although the wri?en language is common. However it is character based and computer soSware needs double-byte character capacity unlike the Roman alphabet There are mul>ple major languages and alphabets across the region that have come from very dierent roots, having li?le if nothing in common En>re language structures vary including tonal/ non tonal pronuncia>on and character/le?er construc>on English is the one unifying language and prevalent in business use. While its use and adop>on is growing quickly, language complexity is a major impediment to undertaking business across the region

4. Long heritage and proud recent histories

Many parts of the region have a cultural heritage that stretches back centuries and even millennia There is oSen great pride and strong anity to the cultural heritage and history, more so than many western countries, especially those in the New World Historical facts, legends and myths have as much depth across Asia than say European history; people are oSen bemused why so much importance is placed on the history of Europe and so li?le is understood of their history The region has re-wri?en the history books during the 20th Century and an understanding of the region requires some basic knowledge of such milestone events as the independence processes in India, Indo China and Indonesia; the par>>oning of India; Japanese expansion during the 1930s and the Second World War in Asia; Chinese na>onhood, the Communist revolu>on, the Cultural Revolu>on and the Great Leap Forward to the modern era; and key conicts and their aSermath since WWII including Korea, Vietnam, Malayan insurgency, India/ Pakistani border disputes and the killing elds of Cambodia It is important to acknowledge and respect the sense of history and pride that is typical across the region

5. Religious diversity
Religious diversity underpins much of the regions complexity Islam is dominant in Pakistan, Bangladesh, Indonesia and Malaysia and widely prac>sed in India Buddhism is predominant in much of South East Asia and parts of China and Japan Confucianism and Taoism are predominant in China Shinto is predominant in Japan Chris>anity predominates in the Philippines and South Korea and is a widespread minority religion elsewhere There is a religious base to many areas of past and poten>al trouble, e.g. India/Pakistan, Chris>an/ Muslim in parts of Indonesia, south Philippines insurgency, internal dissent in China in Tibet and the far west

6. Never assume anything

In almost every area imaginable, things can work in dierent and unexpected ways across the region, and many >mes from market to market within the region (and in some places like China from Province to Province) Expecta>ons people have of what is appropriate when interac>ng with businesses, government, customers or colleagues may be very dierent from what you might expect Each country has its own set of regula>ons and these are typically not harmonized Views of what is right and wrong, or what cons>tutes an agreement, or how binding a legal contract is, or any number of issues may not be what is expected, and these dierent perspec>ves may result in fundamental misunderstandings One of the most common traps for execu>ves new to the region is to make a decision on a par>cular issue, assuming that the factors that this issue depends upon as well as the eect the decision will have are predictable. So oSen these assump>ons turn out to be false because local regula>ons, common prac>ce, cultural issues, etc, can create a very dierent outcome to that an>cipated. Always consider the dependencies and results of a key decision to ensure your assump=ons hold true Transparency can be a challenging issue across much of the region. Levels of disclosure, transparency, formal documenta>on and adherence to rigid audit and compliance regimes vary, and it is wise to learn that accep>ng informa>on at face vale may not always be the best approach

7. Key popula>on trends

Overall, birth rates are declining and life expectancy is increasing but this trend is at dierent stages across the region These demographic trends have signicant economic impact and are a key to understanding the future of the region Japans popula>on is reaching the >pping point where more people will re>re from the workforce than join, contribu>ng to Japans economic pressures China and South Korea see the same thing occurring within the next two decades Elsewhere in the region, the popula>on is youthful with many markets in South and South East Asia consis>ng of 50%+ under the age of 25, and the impact of an ageing popula>on is likely to be felt 3-4 decades from now The unexplained trend towards more male births plus ongoing rural/urban migra>on are also likely to con>nue to impact the region

8. Rising consumerism, dynamism and early adop>on of technology

Across the region, newly acquired spending power and the appe>te for consumer goods are driving consumer spending at an astonishing rate More new cars were sold in China in 2009 than in the US for the rst >me; there are extensive wai>ng lists for Indias inexpensive Nano Consumers are early adopters and voracious consumers of new technology. More than 50% of the worlds new smartphones are expected to be sold in China in 2011 Youth-oriented culture, fashion, dynamism, brand consciousness and the prevalence of luxury brands are all a part of this phenomenon

9. Internal dissent
Asia is not one big, happy, extended family Poli>cal tensions remain high in places like India/Pakistan and the Korean Peninsula Internal dissent makes itself known in China from >me to >me Poli>cal instability or uncertainty and the threat of violence exists in areas such as Burma, the south of the Philippines, the south of Thailand, Nepal and the China/Taiwan debate is not over The appropriate sharing of economic prosperity creates tension; recently this erupted in Bangkok and it is only a decade ago violence was directed against the ethnic Chinese community in Indonesia Rivalry and jealousies between provinces or countries and individuals across the region may not be outwardly evident but exist to the same extent as any other part of the world

10. Australasias iden>ty crisis

Whether Australia and New Zealand should be considered part of the region or completely separate is a ma?er of debate Two decades or more ago, the answer would have likely been no However extensive Asian immigra>on and Asian investment in both countries, extensive Asian student popula>ons and Asias hunger for the importa>on of natural resources from these countries has driven much closer bonds At the same >me Australasias tradi>onal historic rela>onships and trading partners in Europe and North America have waned to a degree This results in the some>mes in, some>mes out posi>on and the oSen confused use of Asia and Asia Pacic not knowing is this does/should include Australia and New Zealand Mul>na>onal organiza>ons typically take one of two views, unless A/NZ stands alone. Geographic proximity to the rest of Asia forces their inclusion into an Asia Pacic regional structure for some companies, while the other approach is to keep A/NZ grouped with developed markets like Europe and North America

About the author

Royal Siam Natural Health and Beauty Royal Siam is an interna>onal manufacturer and distributor of branded skincare, haircare and related health and beauty products, with its headquarters in Bangkok, Thailand. The company specializes in the use of natural ingredients, leveraging the extensive knowledge base built up over more than 800 years by the Thai Tradi>onal Medicine profession. In addi>on to this emphasis on natural and tradi>onal ingredients, Royal Siam researches and includes some of the latest ingredients and techniques developed by modern science resul>ng in a range of premium skincare and an> aging products that represent world best prac>ce in both 100% natural products as well as those that include synthe>c ingredients. The company distributes its products through retail opera>ons in Thailand and globally via and interna>onal online store, accessed at h?p://www.royalsiam.asia. The website of www.royalsiam.asia contains extensive resources and informa>on about the skincare industry as well as the role Royal Siam plays within the industry.

www.royalsiam.asia

A veteran of the Asia Pacic business scene, David Christensen is an Australian (with New Zealand roots), currently based in Bangkok, Thailand where he is CEO of premium skincare and an> aging products manufacturer Royal Siam Natural Health and Beauty. Having lived and worked in 14 countries as wide aeld as Russia, India, and Japan, David has a background in adver>sing with Saatchi & Saatchi and DDB, extensive interna>onal business strategy consul>ng experience as a Partner with Gravitas Partnership in Hong Kong, and senior regional line management roles across Asia Pacic with American Express, Carlson Wagonlit, and AXA Asia Pacic. His LinkedIn prole can be seen at this link LinkedIn Prole and you can contact him by email at [email protected] .