Expertise from Japan, Hong Kong, Malaysia and India came to Wales last week, to discuss the Asian markets with Welsh exporters at ‘Doing Business in Asia: Meet the Experts.’
Hosted by UKTI, the South Wales Chamber of Commerce and the Welsh Government, the event provided a unique opportunity to gain insight and knowledge from ‘on the ground’ representatives key markets where Welsh businesses could do some serious business.
Part of the UKTI Asia taskforce project, the event focussed on export and opportunities from the UK to Asian countries.
The event kicked off with an introduction from Eleanor Harris, head of trade at the Welsh Government, who outlined the clear stance from the government when it comes to exporting. “International trade is right at the top of the agenda for the Welsh Government. We want more exports and more exporters,” she said.
The first country under the microscope was Japan, and Tim Johnson, head of strategic trade UKTI Japan, highlighted five growing sectors which hold opportunities for businesses looking to trade in the Japanese market: security, lifestyle and consumer products, smart cities and technologies, education and training and chemicals and pharmaceuticals.
Johnson highlighted the demand from Japan’s 127 million consumers for high-quality branded goods, and therefore food and fashion exporters would be particularly suited to the Japanese market.
He also highlighted Japan’s bid to host the 2020 Olympics, and how it has been confirmed as the 2019 host of the Rugby World Cup, with both events requiring the expertise in security that UK firms can offer.
Smart city opportunities see Japan review energy technologies as they look to create low carbon towns, and Johnson highlighted that 2011 was a record year for acquisitions overseas, with Japan spending US$70billion in outward investment aimed at addressing this issue.
He also pointed to Japan being the second largest pharmaceutical market in the world and how, with an increasing ageing population, there is continuing rise in drug demand. Japan currently outsources up to £2billion a year in the pharmaceuticals sector and is actively looking for partners in other countries to manufacture and produce drugs.
As the third largest economy in the world and with the greater Tokyo region boasting a GDP the size of Russia, “Japan is not a fast moving developing market, it already is an established market,” explained Johnson.
Richard Flood, UKTI deputy trade commissioner, then shared his expertise of Asia’s leading financial and business centre, Hong Kong.
Flood highlighted the strong and established business links between the UK and Hong Kong, and how Hong Kong is an easy place to do business because of its similar legal and international business support services to the UK’s.
He outlined not only Hong Kong’s GDP of £155billion, but also its reported fiscal reserves of over HK$700billion (circa £60billion). Part of this will be used for major infrastructure projects, such as the Kai Tak development, the West Kowloon Cultural District (WKCD) and the Hong Kong-Zuhai-Macao Bridge. As the government invests in such projects, it was clear that Flood’s presentation was a call to action for UK construction and infrastructure companies.
Before closing, he also highlighted opportunities across a number of other sectors, including creative industries, ICT, financial, legal and business services, education and training, transport, medical, life sciences, environment and food.
After a short break, Malaysia was the next focus, and Tony Collingridge, director of trade and investment in the country, discussed the range of opportunities open to Welsh businesses looking to build trade relationships with the Asean market.
Collingridge outlined the huge markets that surround Malaysia, including Vietnam, Indonesia and Thailand. It strategic location sees 40% of world trade and 50% of the world’s oil trade passing through the Strait of Malacca, whose borders Malaysia shares with Indonesia.
An over-arching theme of his presentation centred on Malaysia’s aim to obtain Developed Nation status by 2020, with the goal to increase per capita incomes to US$15,000 by this time. Currently, the economic transformation programme has seen per capita incomes increase to US$10,075 in 2012.
In order to reach this goal, Malaysia requires GDP growth of 6% per annum. In 2012, its GDP was 5.6%, an increase from 5.1% in 2011, and the latest IMF forecast predicts 5%+ growth in the country to 2017.
Domestic consumption is recognised as a key driver of this growth, and Collingridge stressed how there has been a shift to a service-based economy in Malaysia. British brands such as Debenhams, Marks & Spencer and Tesco are expanding very quickly in Malaysia.
UK exports to Malaysia were up 14% in 2011 to £2.25billion, and a Free Trade Agreement is currently under negotiation with the EU which will open further opportunities in the Malaysian economy.
“There is a huge amount of Malaysian investment into the UK, Malaysia is the second largest investor into London commercial property,” explained Collingridge. “They are very positive about the UK. In Malaysia, the UK is safe and trustworthy, and if we go in with these strengths we will always win business there.”
He went on to stress the Malaysian government’s significant commitment to education, promising to spend £50billion over the next five years. Currently there are 15,000 Malaysians studying in the UK, but there are 58,000 Malaysians in Malaysia studying UK qualifications.
He closed by stressing the importance of local partners to break into the market, outlining that a partner has to have the right political fit for your business needs.
The final presentation was delivered by Richard Hyde, a British Deputy High Commissioner based in Hyderabad, who began by outlining the growth in India’s middle class.
“India’s middle class aspire to buy the best,” he said. “India loves the idea of British engineering, and the luxury car market is growing at 40% a year.”
Hyde then went on to discuss the challenges India faces, and where Welsh businesses could share their expertise. Technology and capabilities are required because of India’s problem with logistics across such a vast country, while infrastructure is also a huge challenge, with the Indian government building another 50 airports in the next two to three years.
He also identified the challenge India’s growing private healthcare sector is facing as it struggles to cope with demand. The British NHS is celebrated in India, he stressed, and doctors want to see training from the UK in this area.
Finally, he outlined the challenge it faces with its energy supply. There is a 10% gap in the power India has and what it needs, so he identified portable power options as being much sought-after in the country.
Hyde also outlined how India consumers are expected to have spent US$152billion on mobile handsets alone by 2020, with consumers bypassing desktop computers and business largely being conducted by phone. The message was clear; mobile phone apps and technology is a huge market.
Another massive market for the young middle class in India is football. Hyde predicted that the sport is now overtaking cricket, and the Premier League brand has a huge following in India. With Swansea City now a Premiership side, and Cardiff City on course to follow suit, Hyde predicted there could be huge opportunities to piggy-back on the audience it has.
Hyde outlined that doing business in India at government state level is straightforward, but if a business encounters a national issue it can become complicated as it needs to go through government in Delhi, which could lead to long delays. “There are over 100 UKTI experts in India to help with any problems a business might encounter,” he said.
He closed by stressing that India is not a place where you can make a ‘quick buck’. “India is a brilliant long term bet,” he said, “but you need to put time in to build relationships and then you can do some serious business.”
The event closed with the four experts joined by Huw Roberts, the Welsh Government’s senior business development manager for international trade, to answer questions on a number of topics, ranging from e-commerce and intellectual property, to how to go about choosing the right partners overseas and the importance of trade missions.