Doing business in Asia

I was just watching a video from the store of INSEAD knowledge videos. The video was inducted by INSEAD professor, Franz Humer. In this video Prof. Humer talked about doing business in Asia. He mentioned that though the region do offer stupendous return in the range of 20-25 %, but its really not easy to do business in this region. The prime reason he mentioned was,

1. Corruption : According to Prof. Humer Asia suffers from great level of corruption at every level from top to bottom. So any business operating at the global level has to deal with this level of corruption to form their existence in the region.

2. Counterfeit : He also mentioned that the two biggest economies in the region, India and China, are also major manufacture of counterfeit products. If we go by statistical figure, around 8% of counterfeited Medicines in Europe are produced in China, while it goes more than 30% in case of India. This counterfeited trade will certainly affect not only the business of the global firms involved in this trade but also affect the human lives to a much greater extent.

Apart from the above two points mentioned by Prof. Hummer, I would also like to add some more points to the above topic.

1. Unstable boundaries : Unlike EU which did not see the any major conflict since World War 2, while the same is not applicable to Asia. Asia boundaries are always remained tensed, be it the India/Pakistan or china, or may be to some extent Russia. Such kind of tensed environment really harm the overall business development in this region.

2. No common law binding the region : Companies operating out of EU are often governed by some industry specific law like SEPA and MIFID, while no such common laws exist in the region. Thus with every cross of borders the global MNC have to adjust their policies existing in their region, which may increase their overall expenditure also.

So though Asia do pose as next big market for Developed economies, but its certain that doing business in Asia is not that easy as it look.

Thanks&Regards,
Mohit