Geo Focus: Southeast Asia
Matt Fellows investigates the markets in Singapore, Thailand and Indonesia to find out why they are drawing interest currently.
Another up-and-coming region in the industry, Southeast Asia continues to draw interest from some of the biggest international players in pro-audio. Matt Fellows investigates the markets in Singapore, Thailand and Indonesia to find out why.
There have been more than a few shake-ups in the industry with new managerial and directorial appointments in the Southeast Asia region recently, as companies appear keen to mine a sleeping potential in the area. The cluster of countries is increasingly catching the gaze of some of the industry’s big names; so what exactly is the situation in the region that makes it such a focal point of interest?
First and foremost, Singapore reports stability, according to Joe Fong, deputy managing director at distributor Electronics & Engineering: “Being a mature state, Singapore has good infrastructure that has been developed and established over the past two decades. We are seeing a shift from mass-market experiences and are now heading more towards a higher quality, technology-driven business environment. The demand for AV/IT is the forerunner to deliver media to audiences. Consumers will still flourish but in a defined technology-driven direction, particularly as a leader in the IT-driven environment where Singapore strives to position itself.”
But with multiple markets, each with their own climate, the wider focus may not be as straightforward as simple market prosperity. Andy Yulianto Jahya, consultant at HEAR Pro-Audio Consultants of Indonesia, puts it simply: “At the moment the pro-audio market in Indonesia is still not too good”.
Fellow Indonesian Rudy Winarto, director of Melodia Sound & Lighting Systems, explains: “A lot of Chinese manufacturing is coming to Indonesia, and there are also a lot of copy/fake products in the market. Digital mixers are now very affordable as a number of manufacturers are developing new digital consoles. Speakers are also becoming more affordable, with more variety in model/type from each brand, so people can choose according to their needs, budget and expectation.”
Bumps in the Road
And the situation is not all that different across the sea in Thailand, as Fuzion Far East’s director Siri Wongkamolchun remarks: “Thailand has been stuck in a political situation for a long time. The atmosphere has been unstable. However, I would say the Thai pro-AV market is doing OK despite those problems.” These issues, entirely extraneous from the industry, are pervasive throughout the region, and stifle development that could otherwise flourish.
“Our market has suffered from financial problems and political issues. Last year is just another bump in the road,” Wongkamolchun continues. “Our domestic demand went down, trade and tourism shrank and so on. Our market seems to react and bounce back quicker than before. In the end, everyone is trying to move forward.”
Thailand isn’t the only market in the region suffering as a result of issues unrelated to the industry. Indonesia’s pro-audio sector is feeling the effects of ‘uncertain political turmoil’ according to Jahya, creating an economy where disposable income is at a premium.
“People are looking for affordable products as economic growth in Indonesia is not yet stable due to the political conditions in the country,” adds Winarto. “It still seems unpredictable even now; we have our new president, but there are still lots of internal political conflicts all over Indonesia.”
These struggles could be further attributed to a gradual move into the global lens. Juggling the duress of political uncertainty, Indonesia’s move into the global market is further exacerbated by exchange rate woes.
“The exchange rate of USD to Rupiah went up a few months ago, which makes it difficult to market US products in Indonesia,” explains Winarto. “Fortunately the exchange rate of Euro to Rupiah seems a little bit lower and more stable, so that brings advantages for European products in the Indonesian market compared to US products, but still, the economic situation in the country does not yet support it due to political issues.”
Singapore, however, appears to be enjoying much greater stability.
“We have been able to balance serving the masses and attending to quality, while not forgetting to keep updated with future trends,” notes Fong. “The climate is healthy as long as the company is equipped with technology-savvy human resources. Products can be purchased anywhere but the need to design, build and maintain these sophisticated systems are very much still in demand.”
A Rising Storm
Thailand has sought to legitimise itself within the global frame by attempting to reproduce the successes of established western markets, as Wongkamolchun explains: “Our industry has been influenced by developed countries such as the UK, US and many countries in Europe. We see more and more specialists/consultants from abroad, but it will take time before our industry is going to get more mature.”
But such a fixation on the developed world has led to a unique atmosphere in the attempt to imitate it, cultivating a culture of competition. And in a culture of competition, companies have to be prepared to fight if they want to be left standing.
“Developing industries in Indonesia and around the world are all competing to be the best, and that is unique in the Indonesian market because of the diversity of cultures that demand very diverse treatment,” comments Jahya. “My company’s fate is at a stage of survival in the face of competition from increasingly fierce audio business in the country.”
In the face of stiff competition, differentiation is vital. Wongkamolchun argues that, in Thailand, those key differentiators are quality of both technical support and service: “Even though there are many good products available in our market, our technical support and service seems to be our key to differentiating us from other competitors,” he states.
Markets are wavering across the region as it makes its shaky steps over to the global playing field, but industry professionals believe things are set to get worse before they get better, with competition heating up as pro-audio companies fight for a leading position in the developing climate.
“In the next five years the market will be more difficult, because a lot of its competition is becoming increasingly extensive and rigorous,” Jahya notes. “My strategy would be to have a superior product that is of good quality with a price that is very affordable for marketing in Indonesia.”
Fong believes that not only will competition increase, but so will technological development and demand: “Cloud-based media management and delivery will change the demand for native isolated content archives. Virtual, wireless or digital transportation of media will change the business environment in such a way that some products will become obsolete.”
As each market looks to the future, their distinctive strategies are indicative of the problems that each country faces across the region.
“I think there are a few things that we need to keep working hard on. We need to keep our standard on technical support, system knowledge and after-sales service,” suggests Wongkamolchun. “Our relationship with the client is also important. We spend a long time building trust and relationships with them – we have to keep it that way. We are going to keep exploring new markets in our territory; there will always be new opportunities and new people.”
In Indonesia, future business must carefully account for the political climate. “Our strategy is to keep progressing with innovation and expansion of the business while keeping an eye on the progress of the political issues in the country,” comments Winarto. “At the same time we do believe that we have to maintain our after-sales service because that is the most important key to successful sales.”
Finally, Fong believes that technological development, not just for Singapore but the entire region, is the key to achieving global aspirations.
“Maintaining a good team of talent across all aspects of the organisation to establish teams catering to the cultural and business needs across the region is the only way to go. Singapore does not have the sheer mass, but the region does. The technological development for the SEA region has a good two decades to go of major infrastructure development to cater to the growth of the mass-to-middle income. The growth of China and India into developed or mature economies will demand for not just entry-level goods and services, but ones with quality.”
A unique, complex and multi-faceted climate slumbers in Southeast Asia; a site of simmering competition, symptomatic of a developing market. It is little wonder it has piqued attentions around the world; it is fertile ground, but there are challenges to overcome before its potential can be reaped.
Picture credit: Alter