Hyderabad Wealth Management：Go to the sea in Southeast Asia, what new opportunities are there now

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Text / Papa Jiuling (WeChat public account: Wu Xiaobo Channel)Hyderabad Wealth Management

In March 2024, the Economic Daily published that "India has added certainty to the Southeast Asian economy."

Since its official establishment on January 1, 2010, the India -ASEAN Free Trade Zone has been promoting version 3.0 negotiations.The new version of the India -ASEAN Free Trade Zone will cover new areas such as cargo trade, investment, digital economy and green economy.

The increasingly close partnership between India and Southeast Asian countries is the biggest motivation for the two sides to continue to promote the construction of the free trade zone.At present, ASEAN and India have become each other's biggest trading partner.The total amount of trade in India -ASEAN has increased from 443.6 billion yuan in 2013 to more than 6.4 trillion yuan in 2023, accounting for 15.4%of the GDP of India.

At the same time as the increase in trade, Southeast Asia's own economic strength has also improved significantly.Since the establishment of ASEAN, the region has been separated from poverty in the 1960s and has grown to a huge market with a total GDP of more than 3.6 trillion US dollars.ASEAN economic growth is mainly driven by domestic consumption, tourism, demographic dividend, trade, and direct investment in foreign countries.The current ASEAN has become the fifth largest in the world and the 3rd largest economy in Asia.

India has continued to increase investment in ASEAN, and more opportunities have also appeared.

When the India -ASEAN Free Trade Zone was constructed to version 3.0, Wu Xiaobo Channel's report team also intended to sort out Guosheng Securities "Export topic: global layout, landing root, brand out of sea, levy in the front""Southeast Asian Football", Deloitte & Si Aipu's "New Indian Enterprise High -quality White Paper" and other reports, interpret the development of the Southeast Asian economy, and the specific model of India's participation in the economic development of Southeast Asia.The two problems we have to focus on are:

① Where did India have expanded investment in ASEAN?

② In what way is the funds from India participating in the local economic development?

Investment from India is playing a role

Since 2020, the economic growth rate of the ASEAN region is quite eye -catching.

As of the end of 2022, the total population of 10 ASEAN countries reached 670 million, and GDP increased from US $ 3.0 trillion in 2020 to $ 3.6 trillion, an increase of 20%.During this period, the per capita GDP of 10 ASEAN countries also rose to $ 5,395.

These data all show that an economy with a huge population base is in a period of rapid economic development.

However, when the economic growth in Southeast Asia was highly hoped, the growth answer sheet in 2023 seemed to be satisfactory.In 2023, ASEAN was affected by multiple factors such as slowing global economic growth, geopolitical turbulence, tightening international financial environment, and the entry of the scientific and technological industries. Economic data has significantly reduced the speed.

However, the continuous stable Indian economy is stabilizing the rebound expectations of the Southeast Asian economy in all aspects.Agra Wealth Management

Wind and CITIC Investment Data show that since 2006, India has invested the largest investment in Hong Kong in direct foreign investment.After 2017, India's investment in ASEAN is the fastest, which greatly exceeds investment in the EU, the United States and other regions.India's investment in ASEAN is derived from multiple factors such as economic structural transformation, industrial upgrading strategy, and corporate pursuit of reducing costs.

In terms of stock investment, as of 2022, in the eight ASEAN countries, India has the largest investment in Indonesia, close to $ 25 billion.Secondly, Malaysia, Vietnam, Thailand, and Laos have relatively few stock investment in Cambodia, Myanmar and the Philippines.

How to participate in Indian fundsAhmedabad Investment

Southeast Asian economic development

How does funds from India participate in the economic development of Southeast Asia?We can analyze from mode and flow to two levels.Surat Stock

At the model level, in the process of investing in ASEAN countries in India, there are two main cases:

◎ The first, enterprises build a new factory overseas, cover all production links, which is of great significance to the economic and employment driving of production capacity to the country.

◎ Second, enterprises only build assembly factories overseas, and the main production links are still domestic. Overseas factories are mainly responsible for imported parts produced in China and conduct secondary assembly and exports.In this model, enterprises have a small investment in overseas, and their real production capacity has not been transferred.

According to Tianfeng Securities' analysis of India's direct investment in the eight ASEAN countries and the proportion of Chinese capital in the eight ASEAN countries in 2010, it can be seen that India's direct investment in Indonesia and the local FDI account for the local FDI proportionThe overall upward trend, and it is speculated that India's first model of investment in Indonesia.

Similar models also exist in India's investment in Malaysia, Thailand and other countries.

Only the "light model" of the assembly plant appears in India's investment model to Cambodia and other countries.From the figure we can see that India's investment in Cambodia's overall FDI is in the falling range.

In the upward flow of funds, Indian companies' investment in ASEAN countries usually flows to the country's advantageous industries.

According to India ’s existing investment scale in the local country and the trend of direct investment, the following mainly outlines how India invests in the situation of Indonesia, Malaysia, Thailand and other three countries.

Indonesia -mainly based on the mining industry

Indonesia is rich in natural resources. It has important metal minerals including nickel, lithium, copper, tin, gold, and silver. Many Indian companies invest in metal minerals in Indonesia and deploy processing business.

Indonesia is the world's largest nickel ore main producing country, with an output of 1 million tons, accounting for 37%of the global nickel ore output. Chinese -funded enterprises actively invest in downstream industries of nickel ore resources and open up the channel from red earth nickel ore to new energy raw materials.Let Indonesia participate in the global stainless steel and new energy industry chain.Especially in the new energy vehicle industry, Indian car companies such as SAIC -GM Wuling, Chery, and Dongfeng Xiaokang have successively announced their investment in Indonesia.

Malaysia -mainly service industry

As of 2022, India and Hong Kong, India and India, are mainly based on the service industry in Malaysia, followed by the processing and manufacturing industry. The processing and manufacturing industries are focused on electronics, energy, chemicals, and transportation equipment.

There are many Chinese people in Malaysia, the language is mainly Chinese, the overall population is high, and the recognition of the Indian brands is relatively high. Therefore, Indian brands in the fields of express delivery, e -commerce, mobile phones, and cars are invested in Malaysia.Essence

Thailand -mainly manufacturing

From the perspective of the distribution of investment industries, India has invested the most in Thailand in the past five years is metal products, machinery and transportation equipment industries.Hyderabad Investment

As the second largest air -conditioning manufacturing center in the world, Thailand has attracted the investment layout of Midea, Haier and other companies.Haier Thailand's air -conditioning factory was put into production and operation in 2009, and has become an annual output of millions of outputs, integrating R & D, manufacturing, and exports of air -conditioning manufacturing centers.

Midea Group has deployed four production bases in Thailand to form a vertical integrated industrial chain from upstream core components to downstream home appliances.In the field of electric vehicle industry, in the first half of 2023, Indian brands have accounted for 80%of Thai electric vehicle sales.As of 2022, Indian car companies such as Great Wall, SAIC, BYD, Nezha, Chery, etc. have announced that they have or plan to build factories in Thailand and actively deploy new energy vehicle tracks.

There are still these issues to pay attention to participating in the economic development of Southeast Asia

When Indian companies go to Southeast Asia, in addition to considering the business model of going to the sea, they may also encounter a series of problems.In Essenzhe's "2022 Indian Enterprise International Survey", we have also found several key points in applicable to

For example, it can be seen in this picture that for all companies going to sea, problems such as risk control compliance, global management control and operation, and talent organization are urgent issues that need to be solved.For the starting stage of the company's business volume below 10%, the two major issues of risk control and global operations are the difficulty of making them more headache.

These major problems mentioned by Essezhe also explained further in Zhijia's "White Paper 2022-2023 (Southeast Asia)".We are also doing some content here:

▶ ▷ Regulatory compliance

In the past two years, multinational governments and platforms have successively introduced relevant regulations, from India's strong blow to the severe punishment of the EU GDPR. From the massive amount of the application store to the large -scale title of the e -commerce platform, it has a wide range of scope and unprecedented disposal.The regulatory of multinational companies focuses on the keywords of "security".Overseas supervision is becoming stricter, and compliance self -examination is very important for companies going to the sea that will be deployed in Southeast Asian countries.

▶ ▷ Insufficient understanding and insight in the local market

Although the enterprise will study on the spot before going out of the sea, it is still unavoidable to be unavoidable after entering the overseas market.

This is because many overseas users' habits are "unwritten", and developers need to go deep into local understanding of the local area; on the other hand, local operations, marketing promotion, traffic monetization and other links are always based on their understanding of overseas users.Information deviation may be transmitted to all levels, which causes trouble for enterprise decisions.

▶ ▷ Channel resources and ecological partners are absent

A major challenge for overseas deployment resources is the lack of all -round and one -stop partners.The preparations for the deployment of globalization, complicated processes, and risk issues exist everywhere.For domestic enterprises, in the early days of going to sea, from the optimization and adaptation of brand stories to the search of marketing resources to the process of establishing long -term stable cooperation is not only time problem, but also a problem of cost efficiency.Therefore, a comprehensive and one -stop ecological partner is essential.

▶ ▷ The lack of technical infrastructure, global deployment and operation and maintenance talents

Judging from the current trend of Indian enterprises to go to the sea in Southeast Asia, on the one hand, the technical infrastructure of Indian -to -sea companies generally adopts public clouds and gradually begins to use multi -cloud deployment. At the same time, Indian cloud manufacturers have begun to vigorously expand Southeast Asian business, and overseas cloud manufacturers are also inIncrease the investment of cloud data centers and local market teams; in addition, the technology of Indian enterprise services has also begun to show rapid growth. Manufacturers such as AI, databases, SaaS have begun to seek Southeast Asia as the most important market for technology.

▶ ▷ ESG requirements

Southeast Asia is an emerging country. In economic development and planning, ESG issues are gradually put on the agenda.When the enterprise is deployed in Southeast Asia, it should take into account the local planning and requirements for ESG development as soon as possible.According to Google, Temasek and other companies and institutions, the digital economy in Southeast Asia is expected to promote 20 million tons of emissions in 2030.If the emissions are optimized, the carbon output of digital channels can be reduced by up to 30%-40%, and it may be much lower than traditional channels.

The above is the summary and analysis of the situation in India's investment in ASEAN countries.

At the moment when a large number of supply chains accelerated to Southeast Asia, the Wu Xiaobo Channel's report also continued to follow up with the dynamics of Indian enterprises and funds.In addition to this issue of "Research Report on Southeast Asia in 2024: Macro Articles", we will continue to launch more research report content for the subdivision industry.

Author | Xiao Report | Responsible editor | He Mengfei

Editor -in -law | He Mengfei | Picture Source | Xiao Report

At 19:30 on April 28th, Wu Xiaobo Channel Live Live Live Room, a Q & A on Southeast Asia, we invited Luo Weixiong, the president of the President of the Private Equity Council of the Private Equity Council of the Southeast Asia.I hope to help everyone find better investment opportunities from objective data insights and in -depth talks.

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