Markets in Developed APAC are facing a period of extraordinary uncertainty, driven by forces such as rapid inflation, drastic currency depreciation, and widespread pessimistic sentiment. These dynamics will present major challenges to executives in 2023, as developed markets in APAC are known for their stability and are unaccustomed to such volatility.
There are at least three key headwinds executives should account for when developing plans for Japan, South Korea, and Australia:
- Heightened price sensitivity: Each of the three markets is experiencing unique domestic and global factors contributing to this trend. Multinationals will have greater difficulty maintaining their margins and passing on price increases to end customers in 2023 than in 2022.
- Shifting consumer dynamics: With all three markets adopting an endemic approach to COVID-19 and opening their borders, consumer demand has shifted away from durable goods toward services, entertainment, and travel. Though rising costs will weigh on spending growth in 2023, these channels will display resilience, as they will benefit from tourism and pent-up demand.
- Slowing manufacturing activity: A contraction in global export demand will weaken manufacturing activity across developed APAC markets. In addition, rising interest rates and inflationary pressures will also dampen the appetite for new investments.
It is important that you have a clear understanding of how these dynamics will play out across the individual markets, how you can navigate them, and where pockets of opportunity lie. Watch our webinar on Navigating Headwinds in Developed APAC Markets to learn more.
Watch the Developed APAC Webinar Recording
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