Three opportunities SEA countries can expect from a 'Plus One' approach
This approach is set to diversify Southeast Asia's supply chain.
Asia is expected to be a hotbed for supply chain activity as many manufacturing players started to adopt a "China Plus One" or "Plus One"—an approach that diversifies businesses into other countries instead of investing only in China, YCP Solidiance said in its report titled "SEA Supply China in 2023: Opportunities and Challenges."
This approach is designed to avoid delays and bottlenecks experienced during the instability brought about by the COVID-19 pandemic.
"Whilst supply chain players are set to benefit from moving to Southeast Asia, several intriguing business opportunities are also present amidst international players' supply chain migration to ASEAN countries," YCP Solidiance said.
First is regional economic growth. The migration of players to SEA is expected to make available more jobs, help accelerate infrastructure development, and attract more international businesses.
Second is the growth of construction and infrastructure, which will follow the setting up of factories and related facilities.
Finally, supply chain diversification is forecasted to have a long-term ripple effect on the development of the region's respective specialities.
YCP Solidiance cited Vietnam's capacity to solidify its position as a major electronics and technology player on a global level and Thailand's ability to become a powerhouse in automotive.
“Overall, supply chain diversification and the increased entry of players to Southeast Asia provide beneficial opportunities for all parties involved, especially due to its rapid growth. Although this is promising, the players driving progress should remain cautious and adopt a holistic approach since economies in Southeast Asia are still in the early stages of development,” YCP Solidiance said.