Executive Sentiment: APAC leaders re-think regional strategies

What was meant to be a year of currency and inflation stabilization, monetary loosening and growth acceleration in APAC has rapidly turned into one of uncertainty and dampened economic prospects. FrontierView expects 2025 GDP in China to slow from 5% in 2024 to 4.6% in 2025, at the non-China APAC level to drop from 4.3% in 2024 to 3.2%, at the Southeast Asia level from 4.8% last year to 3.5% this year. These came from downward revisions to export figures especially, from 6.6% to 2.7% in SEA and 6% to 4.4% in ex-China APAC overall.

Winning in APAC will remain critical to MNC portfolios. More importantly, structuring supply chains optimally for the long term across APAC will be essential to global performance. Thus, senior executives are gradually transforming their APAC strategy to prepare it for a new international trade norm.

FrontierView held an exclusive roundtable with senior executives of the region’s top 15 companies across B2B, B2C and healthcare sectors. What clearly emerged was that they are refraining from major supply chain shifts until tariffs are clarified, but holding or phasing out investment decisions and mostly shortening business review and target setting cycles.

China strategies receive a re-set

As multinational companies recalibrate their global strategies, a growing consensus is emerging among executives; China’s growth trajectory is evolving, and so too must the approach to succeeding in this market. No longer the default engine of rapid expansion or the world’s unrivaled manufacturing hub, China now demands a more nuanced, locally grounded playbook. Winning in China will hinge on rethinking resource allocation, setting more realistic performance targets, and pushing deeper into tier 2 and 3 cities where growth potential remains stronger. Scenario building on key macro and long term risks ranging from geopolitical tensions to lingering real estate market vulnerabilities – will be key. While the scale and dynamism of China’s domestic market continue to make it indispensable to global portfolios, leading executives are recognizing the need to reposition China —not as a one-size-fits-all growth story, but as a strategically unique market requiring differentiated investment and sustained adaptability.

At FrontierView’s roundtable, 54% of executives expressed they had manufacturing already in China and intended to maintain those resources – more for a China for China strategy.

India is the top opportunity

India stands out as one of the most compelling growth opportunities for multinational companies today, offering both strong macroeconomic fundamentals and the promise of sustained expansion in a world with few remaining high-growth markets. With domestic activity showing resilience—even amid shifting global trade dynamics and limited tariff-related disruptions—India has become a strategic priority for all the sectors FrontierView engages with. However, the opportunity comes with a challenging operating environment, requiring firms to find a tough optimal go to market and margin strategy. Success will depend on navigating regulatory intricacies, regional diversity, and evolving consumer behaviors—all while maintaining agility and long-term commitment in a market that is as demanding as it is rewarding.

Based on our survey of senior executives, companies are actively pursuing a wide range of strategies to capture India’s growth opportunity in 2025. The most common actions include increasing investment in marketing and customer support resources (67%), expanding distributor networks (58%), and investing in local manufacturing (50%). Many are also introducing new products (50%) and boosting headcount (42%). While some firms are focusing on exports or e-commerce (both at 25%), only a small minority (17%) are holding back due to uncertainty around tariff negotiations.

SEA will remain a manufacturing base but medium term potential is being reassessed

Southeast Asia remains a critical medium-term growth opportunity within the APAC portfolios of multinational companies, with strong long-term potential. Executives rank the region highly in terms of future growth, led by Indonesia, Vietnam, Thailand, the Philippines, Singapore, and Malaysia, in that order. However, the region is not delivering consistently in the short term, with uneven performance across markets falling short of earlier expectations. To capture Southeast Asia’s promise, companies are prioritizing further localization of marketing, customer service, and support functions (67%), alongside expanding distributor networks (42%). Other key strategic actions include investing in export-oriented manufacturing, introducing more localized products, and developing direct and e-commerce channels—each cited by 25% of respondents. Success will depend on tailored, market-specific execution that reflects both the diversity and complexity of the region.

MNCs will need to eventually reassess the total market potential – after the tariff uncertainty settles and the winners and losers of the new world are identified. They will also need to prepare for increased Chinese dumping and thus resign cheaper competition as well as risk of factory closures and lay offs continuing.

Executives are watching to see whether to prioritize the developed APAC region

Developed APAC markets—Australia, Japan, and South Korea—are wealthier large, sophisticated, high-value markets where success is non-negotiable for APAC-wide growth. However, most executives remain cautious, with limited proactive moves underway. In Australia, companies are waiting to see whether the Labor government can stimulate domestic demand and how exposed the economy will be to China’s slowdown. In South Korea, the business outlook hinges on post-election sentiment and whether consumer and corporate confidence will rebound from currently muted levels. Meanwhile, Japan presents a complex mix of high wage growth, a strong yen, historically high inflation but also price sensitivy and an uncertain interest rate path—further complicated by trade tensions and weak confidence in key sectors. As a result, while the potential remains significant, multinationals are largely in a holding pattern, waiting for clearer signals before committing to bolder strategies.