Asia Pacific will continue to experience COVID-19 outbreaks over the course of 2022, but their impact will vary substantially across countries. Markets that have aggressively vaccinated their populations will see less damaging flareups, and their growth rates will begin to return to pre-COVID levels and exhibit more stability over time.
In contrast, our APAC outlook for 2022 tells us that markets with extended vaccination timelines will see more impactful disruption. Their growth rates will lag their peers and exhibit substantial—albeit declining—volatility. Regional executives who understand these dynamics and have a clear-eyed view on critical domestic factors in individual Asian markets will be better positioned to allocate resources across their portfolio, challenge their local teams’ assumptions, and manage expectations from corporate than those who do not.
Markets will diverge as some feel the burden of COVID-19 lighten
APAC is poised to continue posting impressive numbers next year as illustrated in our APAC outlook for 2022. However, many executives in the region will find it more challenging to make the case, capitalize on opportunities, and navigate disruption than in years past. APAC leaders will be forced spend considerable time managing volatility. Many Asian markets have fallen behind in their vaccination efforts, leaving themselves vulnerable to continued COVID-driven disruption. As a result, APAC executives will be forced to spend substantial time on market monitoring and course correction.
Suggested Actions for MNCs
Prepare for continued volatility and divergence in performance across markets. Since many APAC markets will continue to suffer COVID-19 outbreaks over the coming quarters, there is the potential to slow growth, disrupt business activity, weigh on household incomes, and force governments to divert resources toward epidemic management.
MNCs should build substantial flexibility into their demand forecasts in markets where vaccination campaigns are extended, as additional outbreaks could create volatility in your revenue generation capacity there.
Pricing pressures will likely also remain acute in 2022. MNCs should also plan for potential pushback from customers and consider bringing a range of functions together for pricing conversations to ensure you can explore a variety of solutions.
Interested in learning more?
Asia’s business environment will be shaped by continued COVID-19 outbreaks, vaccination drives, and governments’ containment strategies. Download the Executive Summary of our APAC outlook for 2022 to learn more about the drivers, business implications and actions to take, our demand dynamics outlook, and operating conditions outlook.
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