Asia’s economic growth in recent years has been accompanied by a series of disincentives to trade that can cause lost business opportunities. These include “parallel importing,” whereby genuine products are purchased from alternative sources and sold at deeply discounted prices. This practice is rampant in many Asian markets and affects several industries.
Despite high-profile crackdowns in China and parts of South East Asia, notably Indonesia, Malaysia and Thailand, counterfeiting, copycat branding and intellectual property infringements are rife. Counterfeiting is particularly virulent, and affects consumer, healthcare, nutritional and pharmaceutical products sold in street markets, in stores and via online marketplaces. Brands are therefore having to work hard to build trust.
“We have seen that the founding of the the ASEAN Economic Community (AEC) at the end of 2015 is already making some improvements to the harmonization of norms and standards in South East Asia. Regulations can often be a major hurdle when doing business in Asia, with each country having different import procedures and regulations on, for example, ingredients in a given cosmetics or food product,” explained Martina Ludescher, Head Corporate Development at DKSH.
“Even though it is going to be a long, slow path, we have seen that tariffs on many products have already been removed, and over the next ten year period, we are expecting to see a gradual reduction of the non-trade barriers to this major market of around 633 million people.”