As pretty much everywhere else, COVID-19 hit hard the ASEAN countries.
Anyhow, notwithstanding the temporary downturn of their economies, in the current process of industrial decoupling between China and many western economies, ASEAN countries are at the forefront in the race to become the primary investment destination in Asia. An extensive free trade agreement network, the offer of a great (and always improving) legal infrastructure for the FDI and a fast-growing, young and well educated middle class are all factors that will undoubtedly play a role in the present transition.
Also, to alleviate the consequences of the pandemic and continue to attract FDI in the region, ASEAN Governments conceived many incentives and new sets of rules.
Therefore, new investment opportunities are emerging from the aftermath of the pandemic. Among these new opportunities, education, healthcare, and ICT seems the most promising industries to invest in. It follows a brief list of selected sectors that we see as most promising in the near future.
ASEAN countries are struggling to keep pace with the ever-growing needs of the local business community, which requires more and more a graduated workforce, with superior technical and language skills. To meet the expectation of the local business as soon as possible, most ASEAN members have been expanding online learning, making it a priority area of the ASEAN Work Plan on Education 2020, which opened up significant investment opportunities for providers of new educational technologies.
The pandemic has changed the purchasing habits of local consumers, with a dramatic increase in the number of transactions made online.
The ASEAN most popular e-commerce apps saw an increase of more than 60% in weekly downloads in the region, with Vietnam and Singapore leading the group in terms of growth of the internet traffic on the same platforms (+10%). Thanks to ASEAN’s young and dynamic demographic, the growth of the sector in the region can potentially reach an impressive 200% in the next 5 years (from USD 100Bln up to 300Bln in 2025). This is a great opportunity both for IT companies involved in the development of E-commerce apps and for the SME’s interested in launching their product in the region without incurring in a major investment in the first stage of their market expansion.
The penetration of ICT into ASEAN’s healthcare industry is accelerating at an impressive pace. The use of healthcare devices which leverage on the possibilities offered by the IoT (internet of things) technologies is remodeling the way hospitals and doctors interact with the patients, store their records and data, and, ultimately, perform their services.
Singapore, thanks to its sophisticated legal framework and the size and efficiency of its capital market, is undisputedly the most attractive destination for health-tech startups and developers. At the same time, ASEAN’s extensive consumer base will prove to be promising for the producers of innovative and technologically advanced medical devices.
Franco Allena, Director at Kelmer Australia
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