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Long time no talk ,

Would you believe it’s already November?

It seems October and November are the expo season. I’ve already been to Food & Hospitality Queensland and the Good Food Wine Show in October, and I’m heading to the Gluten-Free Living Expo and the Global Sourcing Expo in Melbourne this month.

In China, we have seen the Canton Fair and the largest-ever China International Import Expo (CIIE). Australia’s very own prime minister made an appearance, marking the thawing of the bilateral tension between the two countries.

If you are looking for distributors and buyers in Asia, here’s my to-visit list:

• Korean Vegan Fair (11-13 Apr, 2024)

• Seoul Food & Hotel Expo (11-14 Jun, 2024)

• Seoul Coffee Expo (21-24 Mar, 2024)

• Taipei International Food Expo (26 - 29 Jun, 2024)

• Thailand: Thaifex Anuga Asia (28 May - 1 Jun, 2024)

The business of expo shows its effectiveness as a sales channel, despite the fast-growing E-Commerce.

• The majority of sales are still made in the traditional retail market in Southeast Asia. It is not a matter of one channel or the other. You’ve got to go omnichannel.

• Buying things online like we do in the developed markets is still a relatively new thing in Southeast Asia. Despite the COVID-driven penetration and platform integrity by Lazada and Shopee, fraud and fake goods continue to affect customer trust.

I will use the case of the Vietnamese retail market to illustrate why meeting distributors via expos is still important.

This week’s edition touches on interesting insights such as:

• 🍷🍷 The Vietnamese wine market, an entry-level market worth $229m;

• 🧑‍🏭🧑‍🏭 Southeast Asian migrant workers continue to fuel the skilled job market in Korea (1m+ workers), Taiwan (0.7m workers) and Japan (1.8m workers);

• 🇻🇳 🏭 Da Nang 2030 Master Development Plan approved, Vietnam’s third-largest city;

• 🇮🇩 🍵 Immunity and Beauty/Wellness Functional Drinks are positioned favourably for the $1.5B Indonesian market.

Have a beautiful Sunday,
Peter Park
Connect with me on LinkedIn and Twitter

Special Edition: Vietnamese Retail Market

Key Statistic: The retail market size in Vietnam is projected to grow from US$246.65 billion in 2023 to US$435.59 billion by 2028, with a CAGR of 12.05%. E-retailing is also expanding rapidly, with sales expected to increase from US$14 billion in 2022 to US$32 billion by 2025 (Source: Vietnam Briefing)

Key Takeaway: Unlike many developed markets, the retail scene is highly fragmented with the major CVS players from Korea, Japan and the US. This landscape indicates room for foreign imported brands to partner with foreign CVS brands. The CVS brands are also incentivised to offer more products to draw more customers and build brand loyalty.

Statistics of the Week

• Singapore aims to self-produce 30% of its food with its innovative vertical hydroponic farming. Most of the food locally is imported (Source: Bloomberg)

• Is yogurt-based drink the next ‘bubble tea’? Chinese Gen Z is driving the behavioural shift in this $30B market growing at 9% YoY (Source: China Skinny)

• Many Southeast Asian children see work as a means to contribute to their family's well-being, resulting in over 70% of the world's working children living in Asia (Source: SSEAC Stories)

• Da Nang’s 2030 Master Plan reveals the digital economy to make up 35-40% of Vietnam’s third-largest city’s GDP (Source: Vietnam Briefing)

• South Korea increased the maximum number of visas for migrant workers to 110,000 (vs 88,000 in 2022 vs 51,000 in 2019), many of whom come from Southeast Asia where they make avg. $2,500 per month or 10x the home salary (Source: Nikkei Asia)

• From 2025, multinational enterprises in Singapore with consolidated annual revenues of EUR 750 million (US$797 million) or more will be required to pay a tax rate of 15% on profits earned in the jurisdiction in which they operate (Source: ASEAN Briefing)

Economy

• Global tech companies (Meta, YouTube, Google, TikTok) have become indispensable partners in Vietnam’s online censorship regime, to the point that they are too important to Vietnam to be shut down. And the entanglement goes both ways — for the tech companies, the Vietnamese market is too lucrative for them to back out or resist censorship demands (Source: Coda Story)

• An estimated 100,000 Chinese students are attending Southeast Asian universities driven by practical motivations, emphasising career advancement over academic pursuits (Source: SCMP)

• Taiwan may be a great place to test products bound for Southeast Asia due to its sizeable migrant population. Taoyuan and New Taipei are great places to start (Source: One Forty)

  

  Source: One Forty, Ministery of Labor Taiwan

• Vietnam took over South Korea as the US’s sixth-largest trading partner, driven by its neutral manufacturing location amidst the US-China tension. However, its high-tech export still relies heavily on foreign innovation and the country’s low per capita GDP still needs to grow from the current $7-8K to $20K+ to be the next ‘Asian tiger’ (Source: East Asia Forum)

Infrastructure

• Cambodia announced a master plan for its transport and logistics sectors. This plan includes 174 projects worth an estimated $50 billion (Source: Phnomenpen Post)

• Changi Airport Terminal 2 in Singapore reopened on November 1 after three and a half years of upgrades, increasing the airport’s annual passenger capacity to 90 million (vs Sydney: 45 million) (Source: Channel News Asia) - yes, there is a 14m digital waterfall!

• The outgoing Indonesian President Joko Widodo initiated the construction of projects worth $32B for the newly planned capital city of Nusantara. This includes an airport, a toll road and a hospital. Funds have been pooled from mostly domestic companies (Source: Reuters)

• The construction of the China-Thailand railway between Khon Kaen and Nong Khai via the China-Laos Railway, the transport hubs of Thailand's northeastern region, will form a broader trans-Asian railway network and be Thailand’s first high-speed railway (Source: Bangkok Post)

Politics

• Australia needs a mindset shift when it comes to celebrating investment wins overseas. In 2018–19, Australian companies, particularly in mining, manufacturing, and finance, generated $42.5 billion in profits before tax and returned $15.2 billion to their parents, while spending $25.5 billion in new capital. In addition to taxes paid in their host jurisdictions, these affiliates employed 412,000 people locally and paid $32 billion in local wages and salaries (Source: Lowy Institute)

• Divorce is still illegal in the Philippines. A draft bill requires the Senate’s approval before it establishes a clear definition of ‘divorce’ in law. Strong opponents cite religion as a key reason. Improved social rights such as divorce and custody rights bring the country closer to developed market status (Source: Philippine Star)

• The son of Indonesia’s outgoing president Joko Widodo, Gibran Rakabuming Raka, may run for Vice President in the upcoming election despite having been lower than the constitutional minimum age requirement. However, the Constitutional Court, led by Jokowi's brother-in-law, recently lowered the requirement, enabling Gibran's candidacy. The situation is further complicated by internal party dynamics and Gibran's limited political experience, raising questions about his credibility and the future of Jokowi's legacy (Source: Lowy Institute)

Diagram of the Week: Critical Mineral Production vs Processing

A contrast between the two diagrams of critical mineral production vs processing shows why the world is so obsessed with them, particularly given the US-China tension and their role in high-tech goods production such as EV batteries and semiconductors.

The left diagram shows the diversified share of the top three critical mineral-producing countries. You can see China have large deposits of rare earth minerals and graphite, predominantly used in semiconductors and batteries. Australia has significant Lithium which is used in Electric Vehicle batteries.

The right diagram shows the concentration of processing capacity with China dominating 50% or more of the global capacity for most of these critical minerals. The only exception is Indonesia in nickel production - more than 50% of the global production.

Now that is an imbalance that can be chopped, leveraged, arbitraged, abused and manipulated!