We talk to Sean T. Ngo, founder and CEO of leading Southeast Asia-specializing consultancy VF Franchise Consulting, about the lesser-known franchises that are making waves in this growing market

Which franchise sectors are up and coming just now?

SN: As expected, in Asia, we find that there is enormous interest in new F&B concepts, as well as education, retail and services.

Convenience stores in general require many units to gain economies of scales and branding – they are fast-growing in emerging markets such as Vietnam, Cambodia, Myanmar and Laos. The usual CVS players are present, and many homegrown brands have also entered the fray, and in some markets, leading the industry.
Of course, fast food is also quite popular in ASEAN, with the likes of KFC, Pizza Hut and McDonald’s leading the way. The coffee and desserts/snacks segments also see continued growth throughout the region, including Starbucks, Coffee Bean & Tea Leaf, Cinnabon, Baskin Robbins and the like.

What do brands find attractive about franchising in ASEAN countries?

SN: ASEAN has a population of over 650m people and boasts one of the fastest-growing GDP/capita as a region, with countries such as Vietnam, Philippines, Cambodia, Myanmar and Laos leading the growth.

In 2015, the region’s economic output was $2.8 trillion – the sixth
largest in the world – behind the US, China, Japan, Germany and the UK.
According to the McKinsey Global Institute, ASEAN will have the fifth largest economy by 2050.
According to the Boston Consulting Group, an estimated 120m people will join the middle and affluent classes by the year 2020.

How healthy is the homecare market in the Far East?

SN: The homecare market is quite young in ASEAN as only Singapore has an ageing population.

The homecare market is likely to have better opportunities in ageing markets like China, Japan, Korea, Taiwan and Hong Kong.

Which countries may be interested in automotive franchises?

SN: Many cars are produced in ASEAN, especially in places such as Thailand and Indonesia, which produces millions of cars every year for export and local consumption.

While cars are commonplace in many markets, the abundance of motorbikes is also prevalent in countries such as Indonesia, Vietnam, Thailand, the Philippines and Cambodia. Automotive franchises may be attractive to many markets in ASEAN, though real estate availability and real estate rentals will be a challenge.

Source: Global Franchise Magazine

             March 13,2019