Australian business with growth plans target Southeast Asia

Nina Hendy

Oct 28, 2024 – 4.18pm

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Australia’s business community has shifted its outlook, recognising the strategic importance of Southeast Asia as the region’s growing economic potential becomes clear.

One of the most alluring markets right now for Australian corporates with growth ambitions is Southeast Asia.

Located just 500 kilometres away from Australia, the region is poised to become the world’s fourth largest economy by the end of this decade. HSBC

The region is experiencing rapid population growth and increasing consumer spending - predicted to reach $US4 trillion by 2030 - as its rising middle class demands higher value goods.

Australia’s trade relationship with the Association of Southeast Nations, commonly abbreviated as ASEAN, has traditionally centred around the export of minerals, fuels and raw materials. Data from the Department of Foreign Affairs and Trade shows, however, that aside from a blip on the radar during the pandemic, Australia’s manufacturing exports to the region have grown every year since 2016.

Located just 500 kilometres away from Australia, the region is poised to become the world’s fourth largest economy by the end of this decade. Its digital economy alone is forecast to reach $US600 billion in the next six years.

While the opportunities for business expansion are evident, action is needed. The question is no longer whether to enter the region, but how.

International horizons

Australian furniture designer King Living recognised the region’s potential as both a manufacturing hub and growth market a number of years ago. It has since launched new showrooms in Singapore and Malaysia, reflecting increased demand for higher value consumer goods and established a manufacturing site in Thailand in 2021, supporting the firm’s regional tilt.

A key piece of the puzzle fell into place when King consolidated its banking with HSBC in 2017, a move designed to support its international push.

As King Living CEO David Woollcott explains, the company made the decision to consolidate their banking and move forward with HSBC in 2017. This has allowed the company to tap into an existing presence in 62 markets and territories, supporting the brand’s expansion into the Singapore and New Zealand markets, followed by Malaysia, China, Canada, the UK. King was able to access tailored support from country-to-country, including the provision of accounts, payment infrastructure and bank guarantees to set up their new sites.

Going global

King’s success is representative of a renewed burst of Australian business expansion into ASEAN markets in recent years, seeing the growth potential in the region’s demographics, digitisation and dynamism.

Steve Hughes, head of commercial banking, HSBC Australia and New Zealand says the bank is seeing increased client demand for support exploring the ASEAN opportunity, particularly in Singapore, Malaysia, Indonesia and Thailand. It’s a trend particularly well-suited to HSBC’s footprint and experience in ASEAN, he says.

“There is an inflection point where Australian companies engage us – typically, as they consider entering a new market, or when they are active in multiple markets but struggling to manage multiple banking relationships,” Hughes says.

“For businesses operating across the globe, the ability to work with a single bank provides simplicity and transparency.”

Hughes and his team across Australia and New Zealand work with clients across all aspects of expansion into a new market, from local operating requirements to the management of currency dynamics, through to securing capital or acquisition finance. Once on the ground, companies find the bank’s network comes into its own.

“Our network can connect companies with opportunity and local know-how in parts of the world that many others cannot, including making-in-market introductions,” Hughes says.

Hughes explains that while ASEAN is spoken about as a homogenous group, it’s important to understand the nuances that exist between each member state.

“The ASEAN region is unique, and each country has different trading rules, financial systems and legal systems. This presents both challenges and opportunities, so its important Australian corporates have a partner with a deep understanding of the region and a local presence in its key markets.

“We provide local support across multiple markets – from the moment a client considers venturing offshore, and we continue to provide that support throughout their journey,” he says.

To learn more, business.hsbc.com.au/international