"The world’s center of economic gravity is shifting towards Asia" 

Adrian Eberle: In the recent years, the world’s center of economic gravity is shifting towards Asia with the region achieving by far the highest growth rates. In 2010, Asian markets’ GDP grew by 9% and the Asian Development Bank expects the same trend in 2011, with a growth of 7.8%, due to the sharp increase in aggregate demand in Asia. It is also important to note that the state is increasingly losing its importance as the economic driver, while the rapidly emerging middle class is forming the backbone of growth. While accounting for just 21% of the Asian population in 1990, this middle class segment increased to 56% in 2009. This rise in purchasing power is driving up the demand and consumption of high-quality products and famous brands from the West - that is, goods that are marketed by DKSH throughout Asia.

Adrian Eberle: The biggest challenge that DKSH faces is to find enough of the "right" people. There are not that many people who can not only understand the cultural difference within a single country, but also the differences between the diverse cultures in Asia – and are willing to go the extra mile, that is, often in our case, to travel a lot. We are constantly looking for specialists who are able to think entrepreneurially, possess the needed expertise, and share our values.

Adrian Eberle: In Europe, when you open a newspaper, you see the tendency to reduce Asia to the single common dominator of China. If you were to look more closely at Asia, you will discover enormous cultural, historical, and mental differences – that is also what makes Asia so exciting!

 

Anyone who wants to do business in China should know that the Chinese are tough negotiators. And they expect the same from their counterparts, because only those who fight for their own interests get to keep “face”.

 

To be successful in Japan, one absolutely needs well-established long-term relationships and be aware that the Japanese are very quality conscious. Thus excellent services and impeccable after-sales support is of the highest importance in this market.

 

Vietnamese in turn are inspired by an irrepressible entrepreneurial spirit. The streets of Ho Chi Minh are lined with small and tiny stalls, and the people have enormous fighting spirit and will not be discouraged easily by any adversity.

Adrian Eberle: From my perspective, the sectors that have the greatest future potential in China are those that ensure the continued economic growth of the country. Energy and raw materials are becoming scarce as a result of constant growth.

 

This rapid development has also taken its toll –16 of the 20 cities rated with the world's worst air quality are in the Middle Kingdom; only every second Chinese city cleans its waste water; 700 million Chinese have no access to safe drinking water, and four-fifths of all waste in China is not environmentally-friendly disposed.

 

Therefore, environmental technologies – in addition to communication, mobile, and health industries – are the most important industries in the future. In the long run, China will not accept its polluted air and rivers. These are excellent opportunities for Swiss companies, especially companies like DKSH who are a leader in many areas of clean technology.

Adrian Eberle: When it comes to financial resources, I do not see any concerns. There is more than enough money available in Asia, also from venture capital. Despite global financial and currency instability, the number of IPO candidates on the Asian stock exchanges continues unabated, and there are more than enough investors willing to finance the growth in Asia.

Adrian Eberle: Asia offers virtually unlimited growth potential. However, too often companies forget the basics that lead to success in a new market, specifically in-depth knowledge of local markets, effective marketing and distribution strategies, and superior customer service.

 

Asia operates differently as can be seen by the significant cultural differences in the local markets. The concept of saving face is crucial, and courtesy and respect are highly valued. Thus, there is a high chance to face pitfalls and make mistakes.

 

As a company, you can either try doing it alone, or rely on the know-how and networks of companies such as DKSH. DKSH has nearly 150 years of experience in helping western companies gain access to Asia and increase their market share in Asian markets.

 

Interview: Andreas Hammer, Marketing & Communications