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One of the crucial things that anyone interested in doing business in the Asia-Pacific (APAC) region should understand, according to APAC strategy and innovation expert Bhavya Sehgal, is that it’s necessary to localize — to adapt to local business practices and culture. “Either they will start localizing from day one,” Sehgal said, “or they will eventually have to do it, because they cannot succeed here without localizing.”
Deep local expertise is also how Sehgal, who is managing director, Asia-Pacific and Japan, strategy and innovation, for the business-intelligence firm ORC International, came to be the opening speaker for the 2017 PCMA Global Professionals Conference – APAC, which will be held in Bangkok, Thailand, on Aug. 28–31. The business strategist, who is based in Singapore, says he “live[s] and breathe[s] Asia.”
Sehgal earned an MBA from the T.A. Pai Management Institute (TAPMI) in Manipal, India, and is a regular contributor to The Wall Street Journal, Bloomberg, CNBC, Le Monde, and Channel News Asia. His resume makes him a natural fit for PCMA’s annual invitation-only forum — it was held in Europe last summer — which educates global planners and suppliers about international business opportunities and business events. Convene recently spoke by phone with Sehgal in Singapore, where he was starting his day and we were ending ours.
How do you develop strategy at a time when there is not only significant and ongoing disruption, but also great political uncertainty?
A few years back, say in 2012, when I used to help companies build strategy, we used to look at 2020 as a time horizon — we used to have a window of eight to nine years. But in 2017, when I’m building those strategies today, my time horizon is still only 2020. The relevance of any strategy here and in the future is only going to be three years or so. There are going to be no strategies which are going to be relevant for the next eight years, 10 years, because the market dynamics are just changing and evolving so much. The frequency of multinationals revisiting their strategic plans has actually gone up rapidly.
And the political instability aspect in Asia has always been there. It is reported a lot more in the U.S. now because North Korea is getting a little bit more active. But if you look at the conflicts between China and Philippines around the South China Sea, they have been persistent for the last five years. If you look at the conflict between Japan and Philippines, they also have been persistent for the last five years, and likewise, China and Vietnam.
Political instability does not impact a lot of the regional executives who are sitting in Asia. Specifically it’s top of mind for a lot of folks who are not based in Asia, but people like me who live and breathe Asia, for us, this is bread and butter, essentially. It doesn’t impact us, because we know that this is the new norm.
What are a few key things about the Asia-Pacific region that you hope your audience at the Global Professionals Conference will take away from your talk?
First one of three is, I would like everybody to look at Asia a little bit more patiently. This is the most important one, because everybody looks at Asia opportunistically: “The youth is there, population is there, the supplier base is there, and hence, we can actually make money.” But more often than not, when reality hits the road, what happens is that companies come with a mindset that they will start making money in three years’ time. In Asia, they will need five to six years before they can really start making money. And that is what I mean by patience — that many of them do not have that patience.
Second, everybody needs to acknowledge and understand that they need to localize in Asia-Pacific, whether it is their products or it is their themes. If they don’t localize, it is only a matter of time before they will have to.
Third, think big for APAC. What I mean is, don’t look at APAC as just one or two countries. We need executives to look at APAC from a broader lens, as a portfolio, because at some point in time, one country may be making money for them as the other country may not, and vice versa.
What are some common misperceptions about the region?
The first one is what I was talking about earlier, the misconception that you can make money in three years — it’s a very typical one. The second one is the fact that China is going down and the misconception is that, hence, let’s look somewhere else. That is a wrong strategy, because if you look somewhere else now, you will never be able to enter China again. China is slowing down for the right reasons. The third is, a lot of companies think that when they’re coming in from Europe and the U.S., they will find a similar regulatory environment to what we have in the U.S., which is not going to be the case.
They need to be open-minded that things are going to be loose, things are going to be hazy, and things are going to be in the gray zone. Hence, how do they navigate through that is the question. How do they ensure that they work with the right partners who help them navigate through all those loopholes in the regulatory system?
Are there business trends that are particularly relevant to the business-events industry?
There will be continued sustainable growth in the region despite economic and political instability. The Association of Southeast Asian Nations [ASEAN] will be growing very fast, and all countries will gain despite the U.S. pulling out of the Trans-Pacific Partnership. [Editor’s note: ASEAN countries include Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, and Vietnam.] Thirdly, China and India are too big to offer any country-level opportunities, so the way we help plant businesses is to help companies identify in China and India opportunities at the sub-national level, at the provincial level, and the city level. Picking your spots is a must.