North American Companies Prefer India, China, Australia, and Other APAC Countries in Q2 2023, According to GlobalData

North American Companies Prefer India, China, Australia, and Other APAC Countries in Q2 2023, According to GlobalData

In the second quarter of 2023, registrations by firms with headquarters in North America were dominated by Asia-Pacific (APAC) nations including China, India, Australia, Japan, and South Korea, according to a GlobalData analysis. Along with this, important nations like the UK, Brazil, Germany, Russia and Ukraine were also mentioned.

According to GlobalData’s ‘Company Filings Analytics Trends and Signals Q1 2023’ study, mentions of all five APAC nations grew year over year in Q2 2023. Additionally, it stated that although mentions of Russia and Ukraine decreased, mentions of the UK, Brazil, and Germany climbed.

According to Misa Singh, corporate Fundamentals Analyst at GlobalData, “North American companies appear to be considering the APAC region, and more specifically the region’s emerging markets like China and India, as potential destinations for their business expansion strategies.”

“Companies are investing more and more in the APAC area in order to improve their R&D skills and construct new facilities. In order to enhance the supply chain, North American businesses are increasingly forming strategic supplier alliances. Europe also plays a significant role in their plan for international expansion, said Misa Singh.

In order to increase operations in the Chinese city of Xi’an, Micron Technology Inc. announced a $600 million investment over the next several years. Additionally, the business intends to construct a new structure to increase product capacity. Additionally, it intends to upgrade its Japanese fab in Hiroshima with EUV technology. It wants to introduce EUV technology to Japan as the country’s first enterprise.

In order to create a world-class electronic manufacturing hub in India, Sanmina Corp. formed a joint venture with a completely owned subsidiary of Reliance Industries Limited in the first quarter of 2023. In the meanwhile, Papa John’s International Inc., which views India as an appealing market, revealed its ambitions to open 650 additional stores by 2033 in April 2023.

To promote expansion in the UK and start a localised market in Turkey, Xometry Inc. contributed $1 million. In order to boost the value of SaaS clients and overall recurring income from customers, Thryv Holdings Inc. aims to open a marketing centre in Australia later this year (2023).

“As businesses want to reduce their market exposure owing to the regional crisis, mentions of Russia and Ukraine have decreased. While some global corporations have left or intend to leave Russia as a result of the sanctions, some businesses have momentarily halted operations in Ukraine owing to safety concerns, according to Misa Singh. Yum! Brands, Inc. is one illustration.

In April 2023, KFC will open in Russia. In some circumstances, McCormick & Co. Inc. declared a temporary decrease in the scope of its commercial activities in particular regions of Ukraine.

GlobalData, a renowned data analytics and consulting company, has recently released a report that highlights the preferences of North American companies for establishing or expanding operations in the Asia-Pacific (APAC) region during the second quarter of 2023.

The report is an insightful compilation of data that reveals the attraction of countries like India, China, and Australia, among others, for North American businesses. It analyses key drivers, constraints, and opportunities that are shaping the investment landscape in these countries.

Before diving into country-specific details, it’s essential to understand the broader appeal of the APAC region for North American companies:

• Economic Growth: APAC economies are among the fastest-growing in the world.
• Consumer Market: The region offers a burgeoning middle class that is eager to consume a wide range of products and services.
• Cost-Effectiveness: Labor and operational costs are often lower than in North America.
• Innovation Hubs: Several countries in APAC have become centers for technological innovation.

According to GlobalData, India is particularly appealing for the technology, IT services, and business process outsourcing sectors. North American tech giants like Google, Amazon, and Microsoft have been ramping up their Indian operations due to the highly skilled workforce and burgeoning consumer market. India’s startup ecosystem, worth over $70 billion, also offers partnership and acquisition opportunities.

Abundance of technically proficient professionals.Regulatory reforms make it easier for foreign companies to operate.English is commonly spoken and used in business, reducing the language barrier.

Companies must navigate an ever-changing regulatory landscape.While improving, the country still requires better infrastructure for optimal business operations.

Despite ongoing trade tensions with the U.S., China remains an appealing destination for manufacturing and consumer goods. The sheer size of the Chinese consumer market, coupled with its advanced manufacturing capabilities, is a significant draw.

Over a billion consumers offer an enormous market for various products.China has cutting-edge factories and a well-established supply chain.

U.S.-China relations can impact business operations.Protection of IP remains a concern for foreign companies.

Australia is popular among North American companies, particularly in the mining, energy, and education sectors. Its political stability and English-speaking population make it a convenient choice.

A strong economy offers low risks for foreign investments.Abundance of minerals and energy resources.Its geographical location far from North America can be a logistical challenge.High operational costs due to strict labor laws and environmental regulations.

The APAC region continues to be an appealing destination for North American companies, with India, China, and Australia taking the lead. While each country offers unique opportunities, they also come with their own sets of challenges.

Companies looking to expand into these regions should conduct thorough research and consider forming local partnerships for the most seamless transition. The GlobalData report serves as a valuable starting point for this endeavor.