European companies can maximize their expansion in Asia
A market that for European companies is not only a great opportunity, but the natural outlet for what they have built over the course of generations.
According to a recent report by Mediobanca’s Research Department on the fashion system, foreign turnover accounts for over 50% of the total manufacturing sector in most European countries, with peaks of 72% in the fashion sector for Italy. And when it comes to exports and internationalization, nowadays Asia represents two thirds of world economic growth (63%).
In fact, Asia constitutes an extraordinary opportunity for any European company due to the extreme complementarity of history and market situation between us and Asian countries, of which the most striking case is perhaps China, which has experienced extraordinary growth in recent decades economic, the greatest exodus from poverty in the history of mankind and that after twenty years does not seem to show signs of stopping.
For example, until the arrival of Covid-19, the entire Chinese luxury sector had experienced annual growth rates between 20% and 40%. The Chinese do not lack growth, the Chinese lack products with a history, a tradition and (making an approximation) quality products.
Europe has everything the Chinese lack: history, tradition, quality and in many cases a strong brand that encompasses all of this. However, Europe lacks the growth that the Chinese market has. Therefore, expanding into Asia represents not only a great opportunity for the companies of the old continent, but the natural outlet necessary for everything that our companies have built over the course of generations.
At the same time, Asia represents a great unknown for anyone who wants to approach its markets and, above all, there is a great diversity among the countries that are in a different stage of development and maturity which therefore must be approached in very different ways. When we talk about Asia, we cannot speak of a substantially homogeneous bloc, like Western Europe or the United States and Canada together.
So if the growth of European companies passes through exports and if the countries are so different, how can we navigate all this complexity and how to approach this multi-variable matrix of markets / growth / consumers / distribution for our companies? Approaching Asia in a completely innovative way, understanding the differences between the various countries and starting with the one most suitable for the company that wants to open up to the Asian market, creating – at the same time – the correct sequence of expansion.
One of the main problems is to overcome the main uncertainties of European companies in dealing with internationalization. In the latter field, it is necessary that there are the prerequisites on the part of the institutions not to hinder the investments of companies abroad.
By Domenico Greco
