SOUTHEAST ASIA - The time has come for the packaging industry to re-think its love affair with China and look at Southeast Asia and its 625 million demanding consumers instead. Stuart Hoggard explains why.
China’s economy expanded by 7.4% in 2014 - spectacular growth by European standards; but it is well below the government’s growth target and is actually the country’s slowest growth rate since 1990.
As the China economic slowdown becomes more evident - and as the Chinese navy creates more assertive forward bases in the middle of the South China Sea, and is increasingly more belligerent to its Asian neighbours, it seems that the time has come for multinationals and their international suppliers to kick their China+1 Policies into overdrive and ramp-up production in South East Asia.
On 1 January 2016, just six months from now, we’ll see the official launch of the ASEAN Economic Community (AEC), a new free-trade zone of 10 South East Asian countries, comprising Singapore, Malaysia, Thailand, Brunei, Indonesia, Philippines, Vietnam, Cambodia, Laos, Myanmar.
The AEC will create a powerful union of 625 million consumers in what will be the world’s seventh largest economy and one of its fastest growing globally. The long-term goal is to rival the European Union (EU) further down the line, in 15 – 20 years.
Already, wealth is growing rapidly across ASEAN: Nielsen predicts that the region’s middle class (those with a disposable income of $16-$100 a day), will more than double to 400 million by 2020.
As the ASEAN population becomes urbanised, the region will see a surge in demand for consumer goods, personal care, healthcare and, importantly, safer food.
In the July 2015 issue of Packaging Business Insight Asia, Stuart Hoggard looks at the recent major move by FMCGs such as Unilever and Procter & Gamble (P&G) into ASEAN, the resulting boom in quality packaging demand in the region from brand owners, and the growth opportunities for foreign and domestic packaging converters.
Get the full packaging market analysis here.