When I was in my early 20s, I packed my bag and boarded a flight from Stockholm. I was heading for Asia. I wanted to improve my Thai and experience the Asian way of living, so I stayed in cheap hotels, ate the local cuisine and drank the local liquor all on a shoestring. I had many memorable adventures. I even have fond memories of a gruelling 23-hour train trip from Bangkok to Penang. I was just in love with the country. My nose was glued to the window for the whole journey.
This trip gave me invaluable insights into Asia, its people and the culture. If you want something done, there will always be a way. If you need something, there will always be someone who will know where to find it. There is great entrepreneurial spirit in Asia and I believe that leaves us with a great opportunity.
But living and working in Asia for a number of years now, I have noticed that many ordinary Asians have stayed out of the stock market. For instance, it has been hard to buy meaningful exposure to the Thai tourism sector, in spite of its obvious growth potential.
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Today I want to tell you why I think that's about to change, and what that means for investors. I want to tell you about a sector that's growing like mad all across Southeast Asia.
A shift towards domestic consumption
While these brands might be from further north, Southeast Asia has been an integral part of the success story in forms of supplying support services, management expertise and raw materials.
In this fast Asia, economists are waxing lyrical about the labour productivity and competitiveness in the export sector. But with the world economy going through an uncertain period, Asian economies are being forced to quickly rebalance towards greater domestic consumption.
The same economists are lamenting that the domestic economy predominantly consisting of the service sector is marred by low labour productivity and inefficiencies. But economists are not in the business of making money. They forget that this slow, inefficient Asia means opportunity for savvy entrepreneurs.
So, where exactly do the opportunities lie? Let me tell you about Tony Fernandes who has made a fortune through such an opportunity.
Follow the Asian Lord Sugar
The Apprentice Asia
I think Mr Fernandes affable, plump and gifted with what a friend aptly described as "not an ounce of self-doubt" tells us a lot about how to succeed in the Asian market. AirAsia is a low-cost international carrier. As more and more Asians turn to holidaying in other Asian nations, this budget airline has blossomed. I believe businesses offering low-cost services will succeed here.It's already happening.
First, the Chinese government has banned the construction of government buildings for five years after a number of new luxurious official buildings were built in impoverished areas. A government-controlled company caused a public outcry after pictures showing offices which resemble France's Palace of Versailles.
Second, Las Vegas Sands's results for the second quarter of 2013 revealed that Marina Bay Sands, one of Singapore's largest casinos, is facing a growth slowdown. It also reported an increase in accounts receivable, suggesting that many affluent punters had problems living up to their high-spending reputation.
Third, Capitaland, the leading Singaporean property developer, is said to be planning to reduce the average size of flats as the government is imposing various punitive measures to cool down the property market. The smaller sizes will make the flats more affordable.
Fourth, The Erawan Group, a leading Thai hotel operator, has announced it will launch Hop Inn, a new budget hotel chain. The goal is to roll out 15 hotels by 2015 and 100 throughout the Association of Southeast Asian Nations(Asean) by 2020. What is really amazing is that the average daily rate is to be Bt600 ($20) which can be compared with the luxury rate in Bangkok of Bt4,977, mid-scale Bt2,703 and economy Bt1,383.
Fifth, Malaysia Airports Holdings, the operator of most Malaysian airports, is building the world's largest purpose-built terminal (KLIA 2) for low-cost carriers with the capacity to serve up to 45 million passengers annually, ready to cater for the strong growth in low-cost travel. The new terminal will open in April 2014.
Lonely Planet's guide to investments
I foresee low-cost Asia turning into the latest battleground for companies eyeing healthy growth in an uncertain world economy.
Asian companies are likely to have an advantage against their Western peers in this region. Success will require deeper direct knowledge of Asian cultures and customs, but also the ability to cut through red tape.
There is also great potential for successful Asian companies to replicate their business model elsewhere in Asia. This is helped by the AFTA 2015' an early version of the EU trade bloc - which will allow companies within the ten-member countries of Asean easier access to member countries.
My dream is to enable foreign visitors to buy into the country they see during their trips to Southeast Asia. And I want them to have a chance to get in early.
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