Standard Chartered Research Identifies Asia Pacific as the Priority Market for International Expansion
New research published by Standard Chartered Bank has revealed that while corporations in Europe and the Americas are prioritising their home regions of Europe (84%) and North America (74%) as a source of growth, Asia Pacific (55%) remains a target for their international expansion strategies.
Other regions of interest include South America (38%), Middle East (32%) and Africa (17%), as reported in a press release by the firm.
The survey explored how international expansion remains a key priority for corporations of all sizes and industries to diversify and grow their business. It also delved into CFOs’ and treasurers’ ambitions, concerns and goals as they help their organisations pursue new geographical areas of growth.
The Covid-19 pandemic has reshaped many organisations operating and strategic priorities in the Americas. This is reflected in how close to half (49%) Americas respondents indicated that managing the sustained impact of Covid-19 as one of their top three challenges.
When looking at liquidity issues, 23% of Americas businesses indicated lower than anticipated revenue as a management challenge overseas when asked. This was followed closely by supply chain failure and disruption (21%).
Over the next six to twelve months, Americas companies highlighted the need to diversify their suppliers outside of their home region (37%) as the top priority.
Beyond Covid-19, Americas respondents ranked the ability to understand and comply with local regulations on growth outside the home region as the top challenge of international expansion (32%). This unfamiliarity may suggest why only 13%* of Americas businesses listed Africa as a top three potential growth market – especially when considering the growth potential of the region.
When it comes down to financing international growth, Equity capital markets (76%), bank borrowing (63%) and venture capital (63%) are the top three preferred choices of Americas respondents.
Counter to expectations, only 3% of the respondents in the Americas ranked environmental, social and governance (ESG) criteria and sustainability issues as their top supply chain priority. This could be down to the responsibilities for ESG elsewhere in the organisation, or a view that ESG and sustainability objectives are inherent in the business culture, reports Standard Chartered.
Torry Berntsen, Chief Executive Officer, Americas and Regional Head, Corporate and Institutional Banking, Standard Chartered Bank, said: “Around the world, companies’ experience of the COVID-19 crisis has inevitably reshaped their priorities and the way they address challenges. As businesses explore expansion opportunities, the growth potential of emerging markets such as Africa should not be ignored. Some of the most commonly perceived challenges can be readily overcome with a trusted partner.”
Recommended news