APAC Market Report - Business Expansion

In this new analysis, we look at business expansion trends across APAC. Business expansion patterns are key indicators of where the future of APAC business is headed, as well as where opportunities will arise for those looking to lead.

Read the highlights below, or download the full report to find out more! https://economicgraph.linkedin.com/content/dam/me/economicgraph/en-us/PDF/APAC-Market-Report-Business-Expansion-New.pdf

Expansion into APAC countries grew by 35% between 2019 to 2023.

The 35% growth in expansion into APAC is above the average for Europe (29%) and US (26%). Much of expansion activity into APAC was driven largely by India, which accounted for over half of the region’s total expansion.

Expansion activity was dominated by the Professional Services sector, with more than 1 in 4 companies coming from that sector.

On average, across APAC, the Professional Services sector took up around over 25% of expansion activity, followed by Tech (17%), Manufacturing (14%), and Financial Services (8%).

• The share of Professional Services companies was particularly high in the Philippines (35%) and India (32%), indicating strong growth in service-oriented industries in these markets.
• The Tech sector also saw strong representation, especially in India (19%) and Japan (22%), reflecting the importance of technology in both established and emerging APAC economies.
• Financial Services also contributed a notable share in Singapore (14%), which is nearly double that of the APAC average.
• Manufacturing played a significant role in Malaysia (20%) and Japan (18%), demonstrating the continued importance of these countries as production centres.

The US and UK are expanding to advanced APAC countries and India, while advanced APAC countries are expanding to emerging SEA countries.

When we look at the expansion activity into APAC, we find that companies from the US and UK tend to expand into advanced APAC economies such as Australia, Japan and Singapore, as well as the fast-growing India market. In contrast, advanced APAC economies such as Japan, Australia, and Singapore channel a much larger proportion of their APAC expansions into South-East Asia (SEA). The difference is significant - Japan directs 6 times more expansion into SEA compared to advanced APAC economies, Australia 7 times more, and Singapore nearly 10 times more.

Key Takeaways

1. India's rise as a key driver of business expansion in APAC will set the stage for broader growth across the region. Neighbouring economies, particularly in Southeast Asia, stand to benefit from India's expanding economic influence through trade partnerships, investment collaborations, and shared innovation ecosystems. As businesses look to establish a presence in India, they may also explore opportunities in surrounding markets, leveraging the region's inter-connectedness to tap into a broader range of growth prospects across APAC.
2. The diversity of sectors attracting businesses to APAC underscores its multi-dimensional economic landscape. Professional services, tech, manufacturing, and financial services are key areas of growth, revealing where future opportunities are likely to emerge. However, companies must adopt a tailored approach to expansion, navigating the complex regulatory environments, cultural differences, and unique market needs across the region.
3. There is a cascading business expansion pattern, where developed economies focus on expanding operations into well-established APAC countries with strong infrastructure, while advanced APAC nations with better contextual knowledge of the region are better able to identify growth opportunities in the emerging markets. This underscores the strategic focus of advanced APAC economies on leveraging growth opportunities in developing SEA markets.