For a long time, multinational corporations have often held a dangerous "holistic" bias when examining the Association of Southeast Asian Nations (ASEAN). This perspective views ASEAN—a region with over 690 million people and interwoven diverse cultures—as a single emerging market, attempting to capture one country as a model and then replicating that pattern across other member states.
Author | Leci Zhang
Editor | Hanchen Meng
However, reality has dealt a blow to many companies. The problem is that ASEAN is not a unified market at all; a single expansion strategy cannot penetrate eleven countries with such vastly different characteristics.
EqualOcean believes that in the current expansion across ASEAN, enterprises must shift from a logic of "replication" to a strategy of "reconfiguration." "Reconfiguration" means deconstructing a company's value chain and reallocating functional nodes—such as headquarters, R&D, manufacturing, sales, and logistics—to specific countries based on each ASEAN member's unique resource endowments, regulatory environments, and comparative advantages.
01 Breaking the Holistic Myth: Deconstructing the "Diversity" of the ASEAN Market
The core reason why multinational corporations often face setbacks in ASEAN lies in their misjudgment of the region's level of integration. Although existing policy documents, such as the ASEAN Economic Community (AEC) Blueprint 2025, are committed to reducing tariff barriers, the "diversity" within ASEAN—in terms of market structures, social contracts, political ecosystems, and cultural psychology—far exceeds that of the European Union or North America. This high degree of fragmentation dictates that a single model is inherently unfeasible.
First, ASEAN is not an olive-shaped middle-class society but rather an extremely stratified pyramid structure. Different countries are at vastly different stages of economic development, leading to a massive "fault line" in consumer sensitivity toward price, brand, and service.
Furthermore, while ASEAN has a total population of approximately 690 million, its distribution is highly uneven: Indonesia alone accounts for nearly 40%; conversely, Brunei has fewer than 500,000 people, representing less than 0.1%. The same applies to the economy: if ASEAN were viewed as a single economy, its total GDP would rank among the top seven globally. However, the disparity between rich and poor within the region is stark: Singapore's GDP per capita is close to $93,000, while in countries like Myanmar and Cambodia, it is only one or two thousand dollars. One is a developed global financial center, while the others are underdeveloped markets yet to be tapped; their consumption capabilities and demand structures are simply not on the same level.
Secondly, the linguistic, cultural, and institutional environments are worlds apart. The ASEAN region is home to over 1,200 languages, making it one of the most linguistically diverse regions in the world. Each country has its own official language and mainstream culture: Indonesia speaks Indonesian, Malaysia uses Malay and English, Singapore is primarily English-speaking but with Mandarin, Malay, and Tamil running in parallel, Thailand has Thai, Vietnam has Vietnamese... and there are numerous dialects and local vernaculars.
Religious beliefs also differ: Indonesia and Malaysia are predominantly Muslim; Thailand, Laos, and Myanmar practice Buddhism; while the Philippines and Timor-Leste have Catholic traditions. This means that consumers' values, aesthetic preferences, and even whether Sunday is a rest day vary. For example, Muslim markets have Halal requirements for food and clothing; Buddhist cultural circles emphasize concepts like non-killing and environmental protection; and in Catholic cultures, the Christmas and Easter consumption seasons are prominent. These cultural differences dictate that a marketing message that works in one country may fail to resonate in another. In other words, an advertising creative that sells big in Thailand won't necessarily move a Vietnamese audience.
Thirdly, there is a physical chasm in the infrastructure construction of various countries. The geographical forms of ASEAN—stretching from the continental connectivity of the Greater Mekong Subregion (Thailand, Vietnam, Laos, Cambodia) to the maritime archipelagos of the "country of ten thousand islands" (Indonesia, the Philippines)—determine that traditional logistics models cannot be standardized.
Topographic Map of Southeast Asia
Data Source: 地理教师网
As a top-tier global transit hub, Singapore consistently ranks at the top of the World Bank's Logistics Performance Index (LPI). It possesses seamless sea-air intermodal capabilities, making it an ideal distribution center for high-value and time-sensitive cargo. Thailand and Malaysia boast relatively mature road and rail networks. With the advancement of the Pan-Asia Railway network, cross-border land transport from China through Vietnam and Laos directly to Thailand has become possible, providing a logistical foundation for "China+1" supply chains.
In contrast, Indonesia comprises over 17,000 islands, and its logistics costs have long accounted for more than 20% of its GDP—far higher than the single-digit levels seen in developed countries. The efficient e-commerce delivery experience found on Java is completely irreplicable in Sulawesi or Papua.
The failure of JD.com (京东) in Indonesia was largely due to its attempt to replicate its Chinese model—relying on heavy-asset, self-built logistics (integrated warehousing and distribution) to create an ultimate user experience—within such a fragmented geographical environment. While this model is effective in Eastern China, which is highly populated and land-connected, maintaining a massive self-operated logistics network in Indonesia brought unsustainable capital expenditures and operating costs. Furthermore, it could not rapidly cover lower-tier markets through a light-asset third-party logistics partnership model as Shopee did.
Finally, regarding the institutional environment, laws, regulations, and the ease of doing business vary drastically across countries. Singapore is clean and efficient, with a world-class business environment (scoring 84 on Transparency International’s Corruption Perceptions Index, making it the third least corrupt country globally). Meanwhile, some countries in the region score below 30, with complex and inefficient business systems that require navigating various "grey area" unspoken rules, directly impacting the difficulty and cost of corporate landing.
Additionally, although ASEAN has long held the vision of establishing a common market, the integration process is far from complete. While tariff barriers are gradually decreasing, countries still maintain their own independent systems for investment access, standard certification, and customs procedures. Unlike the European Union, which has unified regulations and a single currency, ASEAN is more like "each country running its own shop under a shared signboard." For enterprises, operating across borders in Southeast Asia often means dealing with over a dozen different regulatory systems. What was expected to be a "copy-paste" expansion results in re-applying for approvals, modifying product standards, and processing licenses in every new country.
In summary, ASEAN is not a flat, uniform plain, but rather a landscape of diverse and uneven hills. Each country is an independent puzzle piece with its own distinct colors and edges. Without understanding this diversity, any company clinging to the fantasy of "one mold for ten nations" will likely face a severe downfall.
02 Redefining the "Springboard": A "Reconfiguration" Matrix Based on Comparative Advantage
Since "replication" is a shortcut to failure, "reconfiguration" is the narrow gate to success. The core of a "reconfiguration" strategy lies in no longer viewing a single country as the sole entry point into ASEAN, but rather treating ASEAN as an integrated circuit board composed of different functional modules. Enterprises need to strategically place their headquarters, R&D, manufacturing, sales, and data centers at the optimal nodes based on each country's comparative advantages.
Many successful companies going global have already been practicing this "modular layout" logic, whether intentionally or otherwise. Specifically, they differentiate the roles played by various ASEAN nations, assigning different strategic functions to different countries rather than forcing a "one-size-fits-all" approach. Taking several key markets as examples, let's look at how mature enterprises are redefining the "springboard":
Singapore: The Regional Hub and Window
As the most developed economy and financial center in Southeast Asia, Singapore is the preferred location for the regional headquarters of many multinational corporations. Although its market size is small (with a population of less than 6 million, accounting for less than 1% of ASEAN), it excels with a world-class business environment, sound legal systems, and zero language barriers (English is widely spoken), making it ideal as a center for regional management and coordination. For example, ByteDance (字节跳动) established its global co-headquarters in Singapore; the cross-border e-commerce giant SHEIN (希音) also chose Singapore to build its Southeast Asian operations center.
Singapore also serves as an excellent window for brand display. Robin Liu, the Chief Marketing Officer of MINISO (名创优品), stated bluntly that Singapore is the core market of Southeast Asia and an important model for testing overseas patterns: "Singapore is not just a sales destination, but also a brand display window; we prioritize launching new concept stores there." In other words, refining a brand image on the highly internationalized stage of Singapore allows the mature concept to radiate to other countries. This differs from the traditional path of "choosing a small market for trial and error before replicating": Singapore acts more like a regional control tower and a "showroom," helping companies establish their strategic and brand footing before expanding to the surrounding areas.
Malaysia: The Low-Risk Testing Ground
Malaysia is regarded by many outbound enterprises as the "first stop" and a field for experimentation in Southeast Asia. Why? First, it has a relatively stable political situation, moderate business costs, and a high level of acceptance for foreign investment and new business models. Second, its social culture is diverse and inclusive, featuring a Muslim mainstream culture alongside a Chinese population of about 30% and an emerging urban youth demographic. With an environment where both Chinese and English are common, the requirements for product and operational adaptability are high—testing the waters here can expose problems and help refine models. Third, the market scale is moderate (33 million people, with the 4th largest GDP in ASEAN), making risks controllable for small and medium-sized enterprises (SMEs).
For these reasons, Malaysia is considered an ideal first stop for Chinese SMEs going global: costs are manageable, risks are low, and it is easy to adapt, allowing local experience to become the foundation for entering broader markets. For instance, in terms of the digital economy, Alibaba (阿里巴巴) deployed its eWTP digital hub in Malaysia long ago, and Tencent Cloud (腾讯云) has also launched data center services in Cyberjaya through cooperation with local partners. It can be said that Malaysia allows enterprises to truly integrate locally, preparing them for future moves into more complex and larger markets.
Indonesia: The Scale-Driven Growth Engine
Indonesia is the undisputed giant of ASEAN; both its population of 280 million and its GDP of $1.4 trillion account for approximately one-third to one-half of the ASEAN total. Any enterprise seeking commercial success in Southeast Asia cannot bypass this largest single market.
However, precisely because of its size, the Indonesian market is also the most complex and volatile, resembling a "miniature continent": over 13,000 islands, hundreds of languages and ethnic groups, extremely uneven regional development, and unique regulatory policies. This requires enterprises in Indonesia to be highly localized and flexible, rather than simply importing experience from other countries.
Many Chinese companies have recognized this and treat Indonesia as an independent strategic focus. For example, Transsion Holdings (传音控股), the mobile phone manufacturer that "rules Africa," chose Indonesia as its starting point for entering Southeast Asia in 2015. After several years of deep cultivation, Transsion's sub-brand Infinix achieved great success in Indonesia. By focusing on gaming phones that align with the needs of local youth and collaborating with popular mobile game IPs and sponsoring local e-sports events, they thoroughly penetrated the youth market. By 2024, Transsion's share of the Southeast Asian smartphone market jumped to 16%, tying for first place with Samsung, with Indonesia being the primary contributor.
Another example is ByteDance's TikTok, which has over 130 million users in Indonesia, second only to the U.S. market. Faced with such a massive user base, TikTok's development strategy in Indonesia had to be independently customized. This included establishing a local content moderation team in Jakarta, launching more localized challenges and filters that align with Indonesian culture, and rapidly adjusting its e-commerce business in response to government regulations.
At the end of 2023, Indonesia issued new regulations prohibiting social media from direct selling. TikTok Indonesia quickly invested $1.5 billion to take a controlling stake in the local Indonesian e-commerce platform Tokopedia. Through this "capital-for-license" approach, TikTok successfully decoupled its e-commerce backend to a local partner while retaining a seamless shopping experience for users on the frontend, resolving the regulatory crisis. These moves demonstrate that the Indonesian market requires its own "dance"—stepping to the local rhythm rather than mechanically following the beat of China or other countries.
TikTok Indonesia and Goto have officially entered into a partnership
Data Source: ANTARA FOTO
Of course, in addition to the three archetypes mentioned above, other ASEAN nations also have their own distinct role positionings. For instance, Thailand possesses mature tourism and retail markets with high cultural acceptance, making it a hotbed for trendy consumer goods. Vietnam, with a population exceeding 100 million and a rising manufacturing sector, serves as both a new growth point for consumption and a supply chain base; many Chinese manufacturing enterprises have invested in factories there. The Philippines stands out for its youthful population and English-language advantage, boasting a developed Business Process Outsourcing (BPO) industry, leading some internet companies to establish customer service centers in Manila.
Successful enterprises assign different functions to different countries based on their own business characteristics, treating the entirety of Southeast Asia as an ecosystem capable of internal synergy. For example, Huawei (华为) established its first overseas global training center in Malaysia, utilizing local multilingual talent to provide training across the entire region.
03 Conclusion: Winning ASEAN with Modular Capabilities
Facing the "diverse" puzzle of ASEAN, Chinese enterprises need not a superstitious belief in templates or a rush to replicate, but rather a reverence for differences and the ability to localize rapidly. Winning in ASEAN relies not on "copy-paste" but on modular combination.
The so-called modular combination means that an enterprise must deconstruct its core competitiveness into portable modules (such as technical platforms, supply chain systems, management experience, etc.) and then quickly assemble customized operational solutions for different countries. In this way, when entering a new market, the company can utilize standardized underlying advantages while flexibly replacing the "shell" for local adaptation. For example, if a company possesses a powerful e-commerce technical platform, this platform is a module that can be universally used across countries; however, the frontend website UI language, payment methods, logistics partners, and marketing content must be adjusted according to local habits. This approach of "unified chassis + localized custom shell" is far more pragmatic and efficient than blind replication.
At the same time, enterprises must learn local reconfiguration. Do not cling to the idea that a specific product successful in Country A must be pushed to Country B exactly as it is; instead, elements proven effective in different markets can be recombined. For instance, a consumer goods company might have validated its channel model in Thailand, its product packaging design in Vietnam, and its pricing strategy in Indonesia. When entering the Philippines, it can integrate the best of all worlds: learn the channels from Thailand, the packaging from Vietnam, and the pricing from Indonesia, then add unique local Philippine elements to combine into a new strategy. This is actually much more reliable than mechanically copying a single template.
Lastly and most importantly, is the organizational capacity for rapid localization. The Southeast Asian market changes quickly and is highly competitive; whoever can understand local users and adapt to the policy environment faster will seize the initiative. This requires enterprises to grant sufficient authorization to regional and local teams within their organizational structure, encouraging them to adjust quickly based on market feedback. For example, when TikTok noticed regulatory changes in Indonesia, the local team was able to immediately decide on product adjustments; another example is the ability of MINISO to design and launch IP co-branded products featuring local cultural elements in different countries, which also benefits from a timely response to local market insights.
In summary, entrepreneurship and expansion in this highly diverse land of ASEAN require maintaining a heart of reverence and respecting the uniqueness of each market. Do not fantasize that conquering one model market will allow you to "sweep across ASEAN." The true path to success is to develop modular and combinatorial strategic thinking and organizational capabilities, becoming adept at seeking commonalities amidst "diversity" and quickly piecing together localized patterns within the multi-faceted puzzle. Only in this way can Chinese enterprises adapt flexibly and defeat their competitors one by one in the 11-nation chessboard of Southeast Asia, ultimately piecing together a victory map of their own.
About EqualOcean
Since 2018, EqualOcean has been dedicated to tracking and analyzing the global expansion of Chinese enterprises. We welcome contributions from industry professionals to share your expertise and insights. Companies seeking international growth, media exposure, or discussions on overseas strategies are also encouraged to contact us directly.
You can reach us via WeChat at xyrnina or by email at xingyiran@iyiou.com.
