The Asia Pacific outlook for 2021 is making progress as countries are developing and/or procuring COVID-19 vaccines to reduce health risks. China’s Sinopharm has already administered its vaccine to 1 million people. The Indian government has confirmed orders of 1.6 billion doses of COVID-19 vaccines from various suppliers. Thailand and the Philippines have confirmed purchase of 26 million and 2.6 million doses of AstraZeneca’s vaccine, respectively, and Malaysia has signed an agreement to buy 12.8 million doses of the vaccine manufactured by Pfizer. Even as countries focus on procurement, firms should expect a prolonged timeline for most countries to achieve full vaccination due to fiscal constraints and logistical challenges.
While Asia as a region will exhibit impressive growth in 2021 compared to the rest of the world, performance across its markets will vary dramatically. Countries that managed domestic COVID-19 outbreaks aggressively and successfully (e.g., China and Vietnam) will lead the recovery, while those that failed to slow the virus’ continued rise (e.g., India, Indonesia, and the Philippines) will experience longer-term economic damage and scarring. As businesses pursue opportunities in this environment, they should prepare to deal with substantial uncertainty. Headwinds to global growth, continued US-China tensions, and localized outbreaks and lockdowns will continue to create more volatility than the APAC portfolio has seen in decades.
Continued coronavirus outbreaks will weigh on Asia’s growth for the foreseeable future. Asia will continue to suffer from secondary COVID-19 outbreaks over the coming quarters that will impact prospects for profitable growth by disrupting business activity, weighing on household incomes, and forcing governments to divert resources toward epidemic management. However, wealthier markets with more developed infrastructure are likely to get full access to vaccines before others, allowing their people to revert to pre-COVID behavioral patterns and economic growth more quickly.
Government stimulus will support fragile economies in the coming quarters. Governments across Asia are attempting to offset the pandemic’s economic impact with substantial stimulus. These packages, which vary in size and scope, have the potential to create opportunities for companies in the short term but will put pressure on government budgets in the long term.
Asian markets will exhibit marked differences in their recovery timelines. Asia Pacific is the only region globally whose economy will recover to pre-COVID levels in 2021. Regional executives who have a clear view of recovery timelines for 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.
Actions for Business Professionals
- Pressure-test your omnichannel strategy in key countries to ensure your route to market will remain robust regardless of whether your customers are in lockdown or able to move freely. Companies that can serve customers effectively through new outbreaks are likely to take market share from those who cannot.
- Prepare to spend more time managing up and managing internal narratives as headquarters sees Asia post remarkable growth relative to the rest of the world.
- Utilize scenario planning to pressure-test your strategic plans for 2021 and determine where there may be potential upside and downside risks for your business.
Download an executive summary of our 2021 Asia Pacific Outlook today. For more information on the key global events to watch in 2021 that will impact businesses operating in Asia, watch the full presentation of our Asia Pacific Events to Watch 2021 webinar.
FrontierView has all the information you need about your market, industry, and company in real-time to power your business decisions. We offer a solution that puts the right information at the right time, at your fingertips. If you would like more insights into your specific markets, click the “Start Free Trial” button on your screen to speak with a dedicated Client Services Manager and receive complimentary access to our offering.