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Economy

Middleweights, not megacities, will lead ASEAN growth

Landscape to look 'very different' by 2030; cross-border trade to be driver

TOKYO -- Gone are the days when huge cities such as Manila, Bangkok and Jakarta spearheaded the fastest consumer demand growth in the Association of Southeast Asian Nations region. Today, middleweight regions such as Cavite in the Philippines are the new hotspots for growth, according to Nielsen and strategy firm AlphaBeta.

In the report "Rethinking ASEAN," the companies surveyed top markets in the region for items such as beer, soft drinks, chocolate, cigarettes and moisturizer. The results showed that many lesser-known middleweight cities ranked among the top 10 markets. In moisturizers, for example, the Thai cities of Nakhon Ratchasima, Chonburi and Rayong came in at sixth, seventh and ninth respectively, just after Bangkok, Singapore and Jakarta.

With soft drinks, the Philippine cities Cebu, Cavite and Negros Occidental rank alongside Manila among the top 10.

The authors also say that it is a "myth" that major markets in ASEAN will not change much by 2030. "The reality is, by 2030, the ASEAN market landscape will look very different."

For beer, Da Nang will be ASEAN's fifth largest market, up from today's eighth. Likewise, Cebu will be the eighth most important market for chocolate, up from today's 15th.

"Targeting these regions today, will ensure a seat at the table for the top markets of tomorrow," the authors said.

The No. 1 driver of growth will be cross-border trade, according to the report. "Given its proximity to India, China and Japan, ASEAN is well positioned to benefit from all types of global flows. By 2025, more than half of the world's consuming class will live within a five-hour flight of Myanmar."

The prominence of economic clusters, the region's abundance of natural resources and burgeoning tourism were also cited in the report.

Middleweight cities are predicted to have the fastest consumer demand growth in seven of the 10 categories by 2030, the report said. Take the demand in chocolate: based on previous data, the large middleweight (1-5 million people) is predicted to have a 5.1% annual growth rate by 2030, compared to 2.6% growth within megacities.

The results were determined by surveying data on consumer demand in over 700 regions within seven ASEAN member states (Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam).

(Nikkei)

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