1 October 2020

Key insights

ASEAN – During the lockdown, online education and healthcare services have flourished, and so has demand for more efficient logistics services. These trends are creating opportunities for companies that can provide scalable digital solutions that promote telemedicine, teleworking, online learning and smart logistics solutions.

Indonesia – Australian skincare products have successfully entered Indonesia via digital channels over the past six months; others are being registered for sale. A growing awareness of healthy lifestyle brands has created demand for Australian skincare products, especially those with natural ingredients.

Myanmar – Myanmar’s real GDP growth is forecast to slow to 2.0 percent in FY2019/20 (October-September), from 6.8 percent in FY2018/19. The tourism and the apparel manufacturing sectors will be badly hit in FY2019/20, while COVID-19 movement restrictions will continue to disrupt economic activity – including agricultural activity – over the coming months. It is likely that lower natural gas prices will also reduce export earnings.

Philippines – Traditionally a cash society, COVID-19 has fast-tracked the take-up of digital payments in the Philippines. Globe, the country’s leading telco, reported a 150% year-on-year increase in registered users for its GCash mobile money service, and an eightfold jump in payments. The Philippine central bank is aiming for 50% of all payments to be digital by 2023.

Singapore – Wine sellers report extremely robust sales through retail-only channels – even during the circuit breaker period.

Thailand – Huawei Thailand is investing A$21 million to establish a 5G ecosystem innovation centre at the headquarters of Thailand’s Digital Economy Promotion Agency (DEPA). The partnership is an important milestone for Thailand as the country positions itself as an ASEAN digital business hub. The centre will serve as a sandbox to research 5G innovations and an incubator for 100 Thai SMEs and start-ups over the next three years.

Vietnam – Vietnam officially resumed some international flights from September 15. Specifically, Vietnam has reopened flights with Guangzhou, Tokyo, South Korea, Taipei, Phnom Penh and Vientiane. There will be up to two flights per route, per week. Before departure, all passengers are required to present virus-free certificates.

Market opportunities

Health

Malaysia – Malaysia is launching a National Vaccine Development Roadmap – and self-sufficiency in biologics (vaccines) is one focus area. To augment the strategic national stockpile, the Malaysian government announced it would purchase vaccines in bulk from abroad while outsourcing bottling to two local pharmaceutical companies DuoPharmaBiotech and Pharmaniaga. Current markets of interest include UK, US and China but this could be a potential opportunity for Australian vaccine manufacturers.

Myanmar – Myanmar has received several major healthcare spending injections to upgrade hospital and healthcare services. Funds include: a US$250 million Asian Development Bank(ADB) loan to help Myanmar respond to COVID-19 by mitigating the impacts on health and livelihoods; an ADB loan of US$30 million for the development of pandemic healthcare services;and an International Development Association loan of US$50 million.

Thailand – The pandemic has fast-tracked solutions to deliver health services through telemedicine. In Thailand, the Samitjev Virtual Hospital created a smartphone app which enables remote patient examinations, diagnoses and treatments through its 380 physicians around the clock. The service is expected to be rolled out to other Asia-Pacific countries.

Infrastructure

Philippines – Roughly 56% of the Philippines’ ambitious ‘Build’ infrastructure program (US$170 billion for 100 road, port and airport projects) is now expected to be completed by 2022 due to budget reprioritisation. Greater emphasis is being placed on health and digital infrastructure. 

Thailand – Multiple infrastructure projects are likely to commence within the next four years creating opportunities for Australian companies. These include: a high-speed rail network linking three airports, worth A$10 billion; the Eastern Airport City project at U-Tapao, Rayong, worth A$13 billion; and phase three of the Map Ta Phut deep seaport development, worth A$2.5 billion. Of specific interest to potential investors are additional incentives on offer within the special economic zones in the three provinces of the Eastern Economic Corridor (EEC). These include corporate income tax exemptions and reductions.

Ag and Food & Beverage

Malaysia – Malaysian food and beverages importers have noted increased demand for apples, oranges and citrus produce and are keen to fulfil this demand with Australian exports. For example, importer Pikzern Marketing is seeking Australian dairy manufacturers to fulfil monthly orders for up to two, full container-loads of cream as well as sliced processed cheese.

Singapore – Australian chilled food exporters report they are able to ship chilled foods to Singapore via airfreight weekly and without interruption, thanks to the International Freight Assistance Mechanism (IFAM). The exporter also says they are successfully shipping via seafreight fortnightly without interruption. There is reportedly a shortage of avocados in Singapore.

Singapore – There arereports that sales of Australian meat products through e-commerce channels have improved during the COVID-19 period, with a shift in consumer habits towards higher and more frequent purchases online.

Thailand – There is an increasing trend for Thais to cook at home rather than dine out. The switch from dining-in to home delivery is driving business growth for last-mile delivery companies such as Grab and Food Panda. People are also shopping less regularly for grocery items but buying larger quantities and switching to cheaper brands to save money.

Fast moving consumer goods

Vietnam – Consumer spending on fast moving consumer goods (FMCG) picked up in the first half of the year. In the first half, most FMCG categories – except beverages– recorded positive growth. Hygiene, health boosting products, snacks, and convenient foods experienced robust growth during COVID-19 with hypermarket and supermarkets driving channel growth.

Resources & energy

Myanmar – A decision is pending on tenders for 30 solar power projects with a combined capacity of 1,060 megawatts. This is the equivalent output of a nuclear reactor. Infrastructure projects continue to progress, notably in power and transportation.

Philippines – Energy demand is rising and the only operational gas field in the Philippines will likely be depleted by 2024. The Philippines Government and industry are pursuing options for liquefied natural gas (LNG) imports and the development of associated facilities.

Singapore – Singapore International Energy Week will go ahead from 26–30 October in a hybrid online/in-person format as part of a pilot of increased-capacity events. Three concurrent conference tracks will be held during the week: the Asia Clean Energy Summit; the Asian Downstream Summit & Asian Refining Technology Conference; and LNG & Hydrogen Gas Markets Asia. 

Vietnam – In the first half of 2020, average spending on online shopping in Vietnam increased by 31 percent, year-on-year. According to iPrice Group, online grocery websites recorded a 42 percent year-on-year increase in traffic. Health and beauty websites also witnessed a 21 percent year-on-year growth in traffic. According to HSBC, Vietnam’s economic growth is projected to hit 3% in 2020.

Technology

Singapore – The Singapore Fintech Festival will take places as a hybrid digital and physical event on 7–11 December. Companies can register interest at https://www.fintechfestival.sg/.

Singapore – The Infocomm and Media Development Authority (IMDA) is keen to support Australian tech startups with ambitions in Singaporethrough its Accreditation and SPARK programs. It is looking to organise a webinar in partnership with Austrade’s Landing Pad in October 2020. The relevant tech domains include AI, IoT, blockchain, data innovation and 5G. This presents an opportunity for Australian companies in mid-growth stage.

Philippines – The Philippine’s Government is seeking international partnerships to support its shift to distance learning, including in teacher training and curriculum content. The government is also prioritisingdigitalisationprograms across the economy. This may create opportunities for Australian edtech companies that specialise in innovation, leadership, entrepreneurship and data management.

Fintech

Myanmar – The pandemic is driving Myanmar’s cash society toward a digital payment world, allowing everyone to use fintech services, regardless of whether they have a bank account. Financial inclusion in the country is projected to increase from the current 45 percent to 60 percent by 2023.

Malaysia – According to local reports, there are opportunities for Australian cyber security companies to assist in tackling newer sophisticated threats such as APTs, which have proliferated over the past few months.

Edtech

Thailand – The pandemic has had an unprecedented impact on Thailand’s labour market, leading to severe job losses across most industries – especially in tourism. The pandemic has also created a greater sense of urgency for on-the-job training as more companies look for solutions to ensure they have staff with the skills needed to compete in the future.

Thailand – Thailand’s Eastern Economic Corridor (EEC) Office will work with government agencies and the private sector to sharpen the skills of more than 8,500 workers next year. The EEC Office estimates that more than 475,000 workers will be needed in the next five years, including people with the skills required by foreign companies. The government is looking at ways to improve skills to better serve targeted industries, particularly in sectors such as next-generation cars, robotics, medical technology and aviation.  

Singapore – The National Institute of Education will pause investment in new collaboration projects with overseas partners until Quarter 4, 2020. However, there is an opportunity for Australian providers to promote short courses that help teachers manage virtual classrooms or deliver interactive online content.

Manufacturing & defence

Thailand –Thailand’s Industrial Promotion Department is partnering with universities and the private sector on programs to help SMEs modernise their manufacturing operations. The aim is to help SMEs develop ‘smart factories’ in line with the country’s Thailand 4.0 policies. The goal is to equip companies with the technologies and know-how that will make them more globally competitive.

Thailand – Thailand’s government has set a target for electric vehicles (EVs) to make up 30% (or 750,000 vehicles) of all auto production by 2030. Mitsubishi Motors Thailand will invest A$575 million in a production facility that will produce 3,000 EVs and A$310 million on a car spray-painting facility. Chinese auto maker Great Wall – which took over GM’s production facilities in Thailand last year – is expected to begin vehicle production in 2021.

Thailand – Thailand’s automotive sector is implementing new technologies, including AI. This is impacting the sector’s 2,000 auto-parts makers, which employ half a million workers. 

Vietnam – There appears to be a trend for global electronics manufacturers to move production to Vietnam. Samsung Electronics will stop producing personal computers in China and shift production to an existing factory in Vietnam to minimize costs. The factory in China will close this month and will be partly converted into a research and development (R&D)centre. Meanwhile, LG is considering scaling up its factory in Hai Phong and building an R&D hub. The moves comes as the Japanese Government has begun helping companies shift component supply to Vietnam, and other countries in Southeast Asia.

Tourism

Thailand – The Thai Hotels Association reports that up to 70% of Thailand’s hotels are ready to resume business, with the remaining properties needing more time to adjust their operations to new government-mandated safety and hygiene measures. In response, suppliers to the food service sector have seen an uptick in demand for food and beverage products.

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