Branding Key to Asean Economic Community Success

By Muhamad Al Azhari on 07:31 pm Dec 10, 2013
Category Business, Economy

UPH Executive Dean of the School of Law, John Riady (right), chief strategy officer of Telkom Indonesia, Albert Tan (center), Partner and Head of Asia-Pacific A.T.Kearney, John Kurtz in Jakarta on Monday. (JG Photo/Safir Makki)

UPH Executive Dean of the School of Law, John Riady (right), chief strategy officer of Telkom Indonesia, Albert Tan (center), Partner and Head of Asia-Pacific A.T.Kearney, John Kurtz in Jakarta on Monday. (JG Photo/Safir Makki)

As the Asean Economic Community will come into effect in the next two years, companies that operate in the region need to sell solid brands to benefit from the economic integration of the 10-member bloc, prominent business figures and experts have said.

“Southeast Asian companies that create a regional strategy now and start investing in building solid brands are poised to emerge as winners in the AEC,” said Vikram Chakravarty, partner with A.T. Kearney, a think thank that has been advising major industries and service sectors across 40 countries around the world.

“Those that don’t have a regional game plan risk becoming their competitors’ lunch,” he said during a discussion about the AEC at the Graha Niaga building in South Jakarta.

Companies with regional ambitions must also invest in brand building, not only to woo consumers and stave off competitors, but also to move up the value chain, Chakravarty said.

A.T. Kearney and JWT, a global advertising and marketing agency, conducted a joint survey of 50 corporate leaders from regional companies.

The survey found that 64 percent of executives say their companies plan to tap new markets in the bloc once the AEC kicks in and about four out of 10 firms are considering mergers and acquisitions as a way to expand quickly to deal with more intense competition.

The 2015 integration aims to enable an easier movement of goods, services, investment, capital and people across the region. The AEC, by design, will create a single market that encompasses 600 million people from the 10 countries grouped under the Association of Southeast Asian Nations: Indonesia, the Philippines, Malaysia, Thailand, Singapore, Brunei, Laos, Cambodia, Vietnam and Myanmar.

According to IHS Global Insight, a US industry analyst, the bloc’s gross domestic product is set to increase more than four-fold in 2030 from $2.31 trillion in 2012.

CIMB Group, the second largest financial service provider in Malaysia and AirAsia, Asia’s biggest low cost carrier, are said to be among groups that would benefit from such integration.

From Indonesia, there are a few large conglomerates with strong regional presence, including Indofood from the Salim Group, Sinar Mas Group and the Lippo Group.

“Unless Indonesia has adequate human capital such that it is able to compete with other Asean countries, Indonesians cannot feel secure about opening up. … Education is important.,” said John Riady, executive dean at Universitas Pelita Harapan’s school of law.

The Jakarta Globe and Universitas Pelita Harapan are affiliated with the Lippo Group.