Asia (Region) Three Asia Political Flashpoints To Watch: Consumer And Retail Impact

摘要

Three political flashpoints are impacting the Consumer and Retail sectors in Asia; 1. Hong Kong Protests: Ongoing civil unrest in Hong Kong will weigh on luxury and duty-free sales, as inbound tourists from mainland China decline, key shopping locations close at weekends and the Hong Kong airport is closed. 2. US-China Trade War: Level of Chinese consumers travelling to the US has dropped, threat of a Chinese consumer boycott within China on US brands in a volatile trade war environment. 3. South Korea–Japan dispute: South Korean consumers boycotting Japanese products and brands. The Asia-Pacific region is a key strategic growth area for consumer-facing companies, but elevated political risk is a mounting threat they are having to navigate. As developed markets in North America and Europe become increasingly saturated, with growth harder to come by, Asia has become an increasingly important region for investment and expansion for consumer facing firms. While breaking into China has been a key strategy pillar for major retails and FMCG brands, the region in general is home to increasingly affluent, tech-savvy populations with a growing taste for premium products. Our political risk index highlights the riskier environment for businesses in Asia, with the region's short term political risk score in decline (low score= higher risk). Our latest 2019 reading for the Asia region is 67.8 out of 100, down from 68.1 in 2018, and 73.7 at the beginning of the decade.