AXXIS Consulting (Singapore), MIT (Myanmar) and Soltius (Indonesia) are the three new Asian member companies of United VARs that joined the alliance in 2018. Asia represents a land full of opportunities, and last year showed the most robust performance globally. Not only one-third of the world’s largest economies are in the Asia, Pacific, and Japan region but Asia alone will add as much value as three Eurozones combined to the global economy in the next 25 years. Let’s take a closer look at upcoming trends for this year and beyond for the region.
Trend #1: The Rise of the Southeast Asian Countries
While the leading economies remain China, India, and Japan, there is also very encouraging news from the ASEAN countries, too. In fact, Q4 2017 witnessed a GDP growth of 5.3%, which gives hopes for a favorable 2018. This considerable progress has been a result of vigorous external demand, tight labor markets, and generous monetary policies which created the necessary conditions for economies in the region to flourish.
Trend #2: Chinese and Indian Outsourcing
If you thought that outsourcing was practiced only by Western companies expanding their reach in search of affordable human resources, you are wrong. As the labor costs steadily increase in China and India, companies there are also joining the race to outsource labor to the lowest-wage countries. The preferred alternatives are ASEAN countries. In particular, the Philippines and Indonesia are suitable for call centers and IT, while Vietnam, Cambodia, and Indonesia provide affordable workers to businesses in the manufacturing sector.
Trend #3: Urbanization of the ASEAN Countries
Urbanization has been a huge trend which has accelerated in the past few years in Asia and Africa. These two continents are expected to account for 90% of the increase in the world’s urban population by 2050. The economic impact could be higher growth and the expansion of the middle class in those countries. Initial forecasts show that Asia could soon be home to two-thirds of the world’s middle-class population. Additionally, 88% of the next billion people joining the middle class will be in Asia.
Trend #4: The Growth of Small and Medium Enterprises
Thanks to expanding internal demand, many SMEs are springing up and growing, some of which also reach the size of large or even multinational companies. Most of the SMEs based in Singapore, South Korea, and Singapore are service-oriented, which reflects the general trend in Asian countries of having a thriving tertiary sector, which is cutting into the manufacturing industry. According to the Asian Review last October, SMEs are the ideal customers for SAP´s solutions which claimed that these types of companies were spurring SAP´s fast penetration in Asia.
Trend #5: Strong Tech Market
Another exciting trend according to Forrester forecasts is that in the Asia–Pacific region governments and companies’ spending will increase by 5.7% in 2018. In particular, software and services purchases will rise around 8% this year and software alone will hit 129 billion US dollars. Moreover, the most significant and fastest-growing software category will be business process applications.
Additionally, Forrester’s report reveals that Japan’s tech market is still the largest in Asia, but that its supremacy is likely to change in the upcoming years. In China and the ASEAN countries (except Singapore) technology penetration is still not as high as in the rest of Asia. However, hardware will remain the largest share of tech expenditures in the ASEAN countries, especially in Indonesia, Singapore, Malaysia, and Thailand. Moreover, India will witness escalating growth in tech expenditures to sustain initiatives such as “Made in India” and “Digital India”.
Other United VARs members from mentionned countries are:
stronger than one