I.

OLI Framework

A. Ownership Advantage
Alibaba is one of the largest retailers and e-commerce companies in the world that is able to provide customer-to-customer, business-to-business and
business-to-customer sales services. One can look towards the company's unique business model, its exclusive technologies and innovations, and its brand
recognition as its primary ownership advantages. Alibaba’s unique business model is more akin to a business ecosystem, a community of businesses and
consumers of many types interacting with each other and the larger business environment (the online platform and the larger off-line physical elements). The
platform by itself is a seemingly self-sustaining environment that provided its participants with all the resources, or access to the resources, that an online
business would need to succeed. Hence, the creation of the so-called ecosystem. Alibaba is what a business gets if they take all functions associated with
retail, and coordinate them online into a large data-driven network of sellers, marketers, service providers, logistics companies, and manufacturers. The
e-commerce company also has access to cutting edge cloud computing technology. It has integrated its core trading system into the cloud, and has allowed the
company to efficiently leverage data in real time. This technology enabled model - in which most of the business operations decisions are assisted or made by
machines - allows businesses to adapt dynamically to changing market conditions and customer preferences. This lets Alibaba gain tremendous competitive
advantage over traditional businesses (U. & K. G., 2021). Similarly, Alibaba also invested heavily in brand recognition. The company is widely known for
allowing small and business to enjoy rapid growth within its aforementioned ecosystem. Although not every business has aspirations for international
expansion, many were still lured in by the prospect of great growth potential with minimum commitment. (U. & K. G., 2021).

B. Locational Advantage
In the past few years, Southeast Asia has seen a rapid growth in income, population, and internet market. The region is currently home to 679 million
people, which accounts for 9 percent of the world’s population. Currently the region has a combined GDP of approximately 3.08 trillion U.S. dollars. While it
was expected to grow exponentially, the region’s outlook has been revised down by 0.1 percentage points to 3.0% as economies in the subregion imposed
targeted restrictions in the face of COVID-19’s Delta variant. However, next year’s growth forecast is increased to 5.1% as economies are expected to
continue easing overall restrictions and reviving economic activities. The region's economy is on pace to be on par with other leading emerging economies,
and currently is the second-largest market among emerging economies. Southeast Asia is the world’s fastest growing internet market. Digital retail currently
in the region grew 85% year-on-year and the region is on track to see almost 80% of consumers go digital by the end of 2021. This unprecedented growth
outpaces the likes of China (5%), Brazil (14%) and India (10%), according to Facebook and Bain & Company’s annual SYNC Southeast Asia report (Hani et
al., 2021). Per person, digital spending has risen to up 60% compared to last year, with overall e-commerce sales set to double by 2026. This is powered by a
youthful population, and the lack of traditional retail options due to geographical conditions.

C. Internationalization Advantage
Outsourcing Alibaba's Southeast Asian activities to Lazada and making a Foreign Direct Investment is the best option for three reasons: (1) Lazada's
existing operations in the area, (2) how outsourcing Alibaba's operations would reduce possible losses, and (3) Lazada's already present competitive edge.
Lazada has already made significant investments in its Southeast Asian operations, including constructing ten fulfillment facilities and over 80 distribution

1
hubs, as well as developing its own logistics service and cooperating with over 100 additional third-party suppliers. The firm has a solid platform ecosystem
in the territory, including dependable partners, merchants, and infrastructure. Perhaps this is why the e-commerce site was successful, ranking first in the
Philippines, Indonesia, Malaysia, Thailand, and Vietnam for online shopping marketplaces. Lazada was a well-established platform in the area, with
competent management and a good baseline for expansion. Secondly, Alibaba will avoid possible losses due to Lazada's purchase. Due to incentives,
discounts, logistical expenditures, and the market's unfamiliarity, Lazada suffered considerable losses in 2015. Additionally, the region's fragmented market,
infrastructure, logistics, connectivity, and payment gateways posed a problem. Early entry into the area through a greenfield investment may have been
expensive and hazardous; thus, purchasing an established company was a better alternative for Alibaba. Finally, if Alibaba were to build Lazada's competitive
advantages in Southeast Asia from scratch - via greenfield investments - it would take years for the company to achieve it. Lazada, empowered by Alibaba's
excellent online retail experience and other resources, allows Lazada to position itself competitively ahead of its rivals. Together, Lazada and Alibaba were
able to fortify their defenses in the face of increased competition in the area, notably from Amazon's expected entrance. Overall, it can be concluded that
outsourcing Alibaba’s operations and chain activities in Southeast Asia brings more benefits.

II. Questions

A. Why was Southeast Asia the right region to invest on?

The ASEAN economy rose to be amongst the emerging economies of the world and the low penetration rate presented opportunities for growth and
development of the market in the Southeast Asian region. That is, Southeast Asia used to utilize 3% online retail penetration compared to 14% in China and
the US. Having 260 million online users in 2016, then estimated 480 million in 2020, and 3.8 million new users a month, it had a fast-growing internet market
and attracted attention as one that is primed for growth through internet services (Google and Temasek 2016). Furthermore, its young population, having only
limited large establishment retailers serving the countries and evolving middle classes, is seen as promising. Alibaba was right to invest in the Southeast Asia
region through local online marketing platforms like Lazada with established supply chains, delivery and payment options in the region, as there was still a lot
of space and potential left in the e-commerce markets for the advancement of products and new ideas — the market being underdeveloped but displaying an
upward trajectory (UNESCAP, 2018). Marie Sun, a senior equity analyst at Morningstar, told CNBC that Alibaba was looking for future growth drivers
outside China (Sahelirc, 2016). And with the many untapped areas of Southeast Asia’s e-commerce market compared to those in China and U.S., this shows
that there could be more breakthroughs and chances for dominance in the market in the future, as well as the potential for technology to make a difference in
people’s lives through e-commerce, online banking or in messaging and calling apps when the mobile internet penetration increases in the region in which
Alibaba can greatly benefit from.

B. What was the strategic rationale behind Alibaba’s investment in Southeast Asia?
Southeast Asia had several factors that would have contributed to how strategic it would actually be to invest in the region itself. First, it had an
ever-expanding middle class population, and partnered with the multiple opportunities for growth in the region, Southeast Asia had the potential to possibly
drive up the e-commerce market. One example of this is Lazada, an e-commerce platform based in Southeast Asia, which was established in 2011. The
company based its model on Amazon’s own e-commerce platform, and gained recognition as it had no other dominant competitors at the time. Lazada grew
substantially over the years, with its online footprint averaging around five million daily visits, as well as having the most Facebook followers in Southeast

2
Asia (Kittilaksanawong & Harun, 2018). Investing in Lazada seemed to be the next big move for Alibaba, considering the latter’s access to an ever expanding
consumer base in Southeast Asia. Additionally, establishing its own platform — rather than investing in a well-established one in the region— would have
cost Alibaba billions of dollars, not to mention time and labor, to develop strategic assets to operate in Southeast Asia (K. & H. N., 2018).

C. Was their acquisition of Lazada a smart move? Or would creating an alliance be better for them?
Yes. Alibaba’s acquisition of Lazada was a smart move because it provided them a new source of revenue to sustain their growth. As the three factors:
(a) increased domestic competition, (b) slowdown in the Chinese economy, and (c) expectations from capital markets, motivated Alibaba to expand globally,
acquiring Lazada would be a strategic move since it aligns with Alibaba’s goal to generate its total revenue of initially 7 percent from international retail and
wholesale markets to over 50 percent in the next twenty years (Kittilaksanawong & Harun, 2018). Through Lazada, Alibaba would have access to a new
market and a growing consumer base outside of China, especially since Southeast Asia is a fast-growing region which could potentially drive the e-commerce
market (K. & H. N., 2018). However, it is important to note that despite the potential market growth in Southeast Asia, it also has downside risks such as
fragmented markets, logistics and payment getaways. With this in mind, starting from scratch would have been more costly and time-consuming for Alibaba
thus, reiterating why acquiring Lazada was a smart move. The acquisition provided Alibaba with an already well-established platform with competent
management and a strong foundation for growth in the region (K. & H. N., 2018). Moreover, the acquisition of Lazada provided opportunities for both
companies to collaborate. In contrast, creating an alliance with Lazada would have been risky for Alibaba because the pegged ‘Amazon of Southeast Asia’
was already cash-strapped in 2015 despite its spectacular growth, and was looking for additional funding to sustain its operations.

D. How can Alibaba and Lazada maintain a leadership position in Southeast Asia? What internationalization strategy can they utilize?
One of the ways Alibaba and Lazada can keep their leadership position in Southeast Asia is to enhance their logistics systems and infrastructure all
over the region, including building more e-fulfillment and distribution hubs. By doing so, they should be able to ensure quicker and more efficient delivery
services. This was the strategy of one of their bigger competitors, JD.com, which has an extensive logistics network and offers same-day and next-day
deliveries (Kittilaksanawong & Harun, 2018). Given that most customers prefer the ease and safety of online shopping during the pandemic, Alibaba and
Lazada can also create more strategic partnerships in order to provide better deals and additional services for their customers. Just as Amazon thought of
acquiring an online grocery marketplace, they can look into similar collaborations just so they have an edge against their competitors (K. & H. N., 2018).
Lastly, being sensitive to cultural nuances of the different countries can help them create better services for their platform. For example, for countries
who subscribe mostly to the Islam religion, they can create special featured categories for halal products on their home page.

Alibaba and Lazada utilized a multidomestic strategy in their approach to Southeast Asia expansion. This was effective, as the diversities of the
societies in Southeast Asia would make a standardized approach difficult to sustain. In order to continue having their leadership position in the region, they
should keep being attuned to the preferences and attitudes of the Southeast Asian societies and provide more localized services. Given that most of the
countries in Southeast Asia are from the Global South and thus have more difficulty acquiring certain products as compared to the more well-off countries,
a focus on their needs and wants would help engage more customers.

3
III. STEP Analysis Summary

Southeast Asia consists of various cultures and religions. Countries that belong to the region have good ties - with ASEAN serving as the primary
political and economic union of ten member states in the region. This way, intergovernmental cooperation is promoted. Policies or agreements that have
significantly improved trade in the region include the ASEAN Free Trade Agreement (AFTA) and the Regional Comprehensive Economic Partnership
(RCEP). The technology in the territory is quickly gaining traction especially with the shift in the digital era during the pandemic. As Southeast Asian
governments struggle to lead their economies towards recovery - global trends in trade, foreign investment, and production present a combination of hazard
and opportunity. With the fragmented market of Southeast Asia, it is imperative to dive deeper in the STEP analysis of the region through evaluating the
environment of Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam as a whole in order to capitalize on the emerging e-commerce market and
potential growth of Alibaba that can benefit the company in the long term.

Indonesia’s large population is composed of various cultures and languages. For this reason, its government has introduced plenty of initiatives and
spent a lot on IT for its citizens to adapt to technology ("Information Technology Sector in Indonesia," 2021). This made the country more receptive to
e-commerce, with the sector having a gross market value of 30 billion USD and 83 billion USD in 2025. Indonesia has a good relationship with its neighbor
Southeast Asian countries, exporting to Singapore, India, Japan, etc. (Shaw, 2021). While Indonesians have been pushing for stricter laws in protectionism, its
government recognizes the importance of FDI during this pandemic and are creating laws to further support it (Bland, 2020).

Malaysia is strategically situated at the heart of Southeast Asia, and thus is a very ideal business location for those who wish to penetrate the
Southeast Asian markets (International Trade Administration, n.d.). With a population of 32.7 million, majority subscribes to the official religion Sunni Islam
(World Population Review, n.d.; Office of International Religious Freedom, 2021). Consequently, the majority subscribes to sharia or the Islamic canonical
law, thus there is a huge market for halal products or halal versions of popular products (Lee, 2020). Malaysia is very open to trade and foreign investment,
and has a preference for imported goods, which they perceive of better quality than local goods (Venugopal et al., 2022). The country’s best prospect industry
sector is their ICT (International Trade Administration, 2021). The government promotes technology adoption and encourages digital entrepreneurship; they
also have a high investment in R&D (Elsevier, 2020; World Bank, 2021). However, Malaysia has experienced crises in the past couple of years. They are not
as stable as they were, given the health and economic crisis following the pandemic, and the political crisis they recently had following the resignation of their
prime minister (Medina, 2021).

The Philippines is a middle-income country and is the 37th largest economy in the world with a GDP of $393.73 billion in 2022. It is a Unitary
presidential republic with a population of 109.6 million people in 2020 (Trading Economics, 2020). The current political environment remains plagued by
corruption, violent crime, and uncertainty surrounding the presidential election due in 2022, and as such carries an apparent political risk. Generally the state
could be described as a decent choice for investors due to low business set-up cost, strategic location within the densest region on earth, and the availability of
a top-notch and affordable workforce. The Department of Trade and Industry (DTI) forecasts predict that the state has the potential to be a technological

4
leader in Southeast Asia in the future (Hani et al., 2021). And finally the market base responds heavily to an entertainment based approach to marketing,
which remains a popular vehicle to target the lower socio-economic class who comprise the majority of the market.

Singapore is a blend of cultures and people – Malays, Chinese, Indians and expats from various countries (People of Singapore, n.d.). It is a young
and growing country where its population of 5,850,342 in 2020 is urban and it was tagged as the happiest country in Southeast Asia (World Happiness Report,
2018). It has one of the most technologically advanced ICT markets in the world and is known to be an early adopter of new technologies, applications and
solutions (ITA, 2021). Singapore holds a high value-added industry with new mechanisms, finance, chemicals, pharmaceuticals and is Asia's leading exporter
of capital through sovereign wealth funds (Coface, 2022). Overall, Singapore has a stable political climate which brings about peace and good standards of
living in the country. It follows the parliamentary democratic system where the Prime Minister and the President are the government and head of the state, in
which the country’s survival and prosperity is their highest goal.

Thailand is an upper middle-income country and the second largest economy in Southeast Asia with a GDP of $409 billion in 2013 (UNCTAD,
2015). It is a constitutional monarchy with a population of 70,087,990 as of 2020 and presents a low to moderate political risk in terms of external debt
obligations. In general, the Thais have a warm and welcoming culture but they are also conservative in nature. According to Bharadwaj et al. (2017), a few
consumer trends that are shaping Thailand are (1) growth is strong in categories that offer indulgences and experiences, (2) a new social media model is
driving e-commerce and (3) women have substantial buying power, even in traditionally nonfemale categories. In recent years, Thailand has had significant
per capita income; however, the country is now experiencing a decline in growth and is at risk of falling under the “middle-income trap” (UNCTAD, 2015). In
addition, Thailand is also experiencing increasing difficulty in competing against lower cost locations such as Cambodia and Vietnam, while at the same time
still lacking the technological know-how and human capabilities of moving into more sophisticated, higher value-added activities (UNCTAD, 2015). There is
not much investment in R&D as well, compared to its Southeast Asian counterparts in the region.

Vietnam is a culturally rich nation, with an approximate population of 96,208,984 citizens, as well as an estimated $1.047 trillion in total GDP
(Burrage, 2021; International Monetary Fund, 2020). Additionally, Vietnam is operated under a unitary communist system of government, though follows a
capitalist ideology for its economics (Shaw, 2021). Vietnam is also relatively technologically advanced, its leading sub-sectors being telecommunications,
smart cities, and cybersecurity, with future opportunities in areas such as healthcare, education, transportation, and electricity (International Trade
Administration, 2021).

5
IV. Annex A
A. STEP Analysis Table

S T E P

Country Social Technological Economic Political

- Population was 278,270,598
Indonesia in 2022, making it the world's
fourth largest (Indonesia
Population, 2022)
- World's biggest Muslim nation
composing 86.70% of the
population (Shaw, 2021)
- One of the world's most
ethnically and linguistically
diverse nations with 600 ethnic
groups, and 700 spoken
languages (Embassy of
Indonesia, n.d.)
- Literacy rate is 95%. (O'Neill,
2022)
- Rise of the middle class is
changing public opinion
- Fashion, nutritious food,
frozen processed food, digital
gadgets, and western cuisine are
popular sectors (Shaw, 2021)
- E-commerce sector had a GMV
of USD 30 billion in 2020 and is
predicted to reach USD 83 billion
in 2025 (International Trade
Administration, 2021)
- Has become the leading spender
on IT in Southeast Asia.
- World's fourth biggest mobile
market, with 112% mobile
penetration and 266 million
customers
- Annual growth rate of 17.7% in
e-commerce revenue by 2022,
resulting in a market volume of
USD 16.5 billion ("Information
Technology Sector in Indonesia,"
2021)
- Fast to adopt technological
advancements. Government has
launched tech initiatives and
transformed e-language into local
dialects (Shaw, 2021)
- GDP was 1.089 trillion USD in
2020, making it the world's 15th
highest. Performance in
pandemic is still strong
compared to others (Shaw,2021)
- Vast number of firms are owned
by the Indonesian government.
However, foreign investors and
private businesses continue to
dominate the economy
(Indonesia Investments, n.d.)
-Goods are usually exported to
Singapore, India, Japan, the US,
and China, while many are
imported from Thailand,
Malaysia, Japan, and China
(Shaw, 2021)
- Unemployment rate was 4.11%
in 2020, and has been below 5%
for the last decade (O'Neill,
2022)
- Member of commercial groups
such as the WTO, the
Organization of Islamic
Cooperation, the East Asia
Summit, ASEAN, the
Non-Aligned Movement, and
the G20 (Shaw, 2021)
- While Indonesians have been
pushing for stricter laws in
protectionism, its government
recognizes the importance of
FDI during this pandemic and
are creating laws to further
support it (Bland, 2020)
- Indonesia is dealing with
serious corruption. It has
infiltrated every sector and
organization, to the point that
several provinces desire to
secede - resulting in political
instability (Gallup, 2021)

- Population is at 32.37 million - The best prospect industry - Malaysia’s GDP per capita in - Unstable due to the health,
Malaysia (2022) and population rate is sector for Malaysia is their 2020 is 10,412.3 USD (World economic, and political crises
1.30% (2020) (World Information & Communications Bank, n.d.) following the pandemic and
Population Review, n.d.) Technology (International - Their GDP growth is expected the recent resignation of the

6
 - Geographical location is
strategically situated at the
heart of Southeast Asia
(International Trade
Administration, n.d.)
- Their literacy rate is at 94.5%
(MacroTrends, n.d.)
- The country’s official religion
is Sunni Islam, with smaller
percentages of other religions,
and thus the majority
subscribes to sharia (Office of
International Religious
Freedom, 2021)
- Majority prefers halal
products or halal versions of
popular products (Lee, 2020)
- Interested in eco-friendly
products and environment-
conscious living (Lee, 2020)
- Preference for imported goods
for perceived better quality
compared to local goods
(Venugopal et al., 2022)
- Filipino and English are the
Philippines official languages in the
Philippines. It is a primarily
Christian country, with Islam
being the 2nd largest religion.
The total population in the
Philippines was estimated at
109.6 million people in 2020,
according to the latest census
Trade Administration, 2021)
- Malaysian government also had
a high investment in R&D, with
about $12 billion (2018) which
is 1.4% of the country’s GDP
(Elsevier, 2020)
- The Malaysian government
promotes technology adoption
among businesses and
encourages digital
entrepreneurship (World Bank,
2021)
- Despite the maintenance of
intellectual property rights in
Malaysia, the amount of
counterfeit and pirated items
remain high (International
Trade Administration, 2021)
- Poor infrastructure is one of the
main problems businesses face in
the Philippines. The government
has made plans to address this
issue through a large-scale
infrastructure initiative. The latest
edition of the government’s plan,
issued in August 2020, consists of
104 projects costing a total
to decline from 4.5 to 2.0
percent over the next three
decades (Devadas et al., 2020)
- The expected GDP growth
decline is foreseen to have
been due to demographics, a
declining marginal product of
private capital, and slowing
growth rates of total factor
productivity and human capital
(Devadas et al., 2020)
- The current unemployment
rate is 4.5%, the highest
percentage since 1999
(Statista, 2022)
- The Philippines is the 37th
largest economy in the world. Its
GDP in 2022 is worth around
$393.73 billion. The state's main
industries that dominate the
economy are travel and tourism,
agriculture, manufacturing,
mining and mineral processing,
pharmaceuticals, shipbuilding,
prime minister (Medina,
2021)
- Bilateral Free Trade
Agreements with Australia,
Chile, India, Japan, New
Zealand, Pakistan and Turkey
(Privacy Shield Framework,
n.d.)
- Member of the ASEAN Free
Trade Area (AFTA), Trade
Preferential
System-Organization of
Islamic Conference
(TPS-OIC), and Developing
Eight (D-8) Preferential Tariff
Agreements (PTA) (Privacy
Shield Framework, n.d.)
- Open to trade and foreign
investment, and imports are
generally treated in the same
way as domestic goods
- In February 2021, Congress
passed wide-ranging
amendments to the main tax
law, investment incentives
regime and several laws that
regulate freeports and economic
zones. The corporate tax rate
has been decreased from 30% to
25% (20% for small and
7
 figures and projections from
Trading Economics. (Trading
Economics, 2020)
- According to market trends,
entertainment remains a popular
vehicle to target the lower
socio-economic class who
comprise the majority of the
market.
- Product loyalty is more
common among the upper-class
consumer, rather than of the
lower classes or any other
demographic category.
- Rapid inflation caused lower
end products of the available
price-range to become
attractive as well to the
upper-and middle-class
segments.
(Economist Intelligence Unit,
2022)
- Population is 5,925,991 as of
Singapore Thursday, February 24, 2022,
equivalent to 0.08% of the total
world population
(Worldometer,n.d.)
P4.13trn
- According to data from the
Philippine Department of Trade
and Industry (DTI), e-commerce
contributed 3.4%, or US$12
billion (PHP599 billion), to the
country’s GDP in 2020.
- The DTI also intends to increase
the number of e-commerce
businesses from 500,000 in 2020
to 750,000 by 2021 and one
million by 2022
- Filipino citizens are quick to
adapt to digital technology in the
midst of the pandemic, and
Department of Trade and Industry
(DTI) forecasts predict that the
state has the potential to be a
technological leader in Southeast
Asia in the future. (Hani et al.,
2021)
- Singapore is one of the most
technologically advanced ICT
markets in the world (ITA, 2021)
- In December 2020, the wireless
broadband penetration rate was
and electronics. The country’s
top trading partners are China,
Hong Kong, the United States,
Japan, Germany, South Korea,
and Thailand.
- The lack of rapid institutional
change would likely cause the
state to underperform
economically in the long term.
Analysis forecasts real GDP
growth to average 4.4% a year in
2021-50. Institutional obstacles
to the effective implementation
of policy are likely to prevent an
increase in the rate of gross fixed
investment growth that could
result in a marked slowdown in
the growth of productivity and
income per head in 2031-50.
- The Philippines is a decent
choice for investors due to low
business set-up cost, strategic
location within the densest
region on earth, and the
availability of a top-notch and
affordable workforce.
(Economist Intelligence Unit,
2022)
- Asia's leading exporter of
capital through sovereign wealth
funds (Coface, 2022)
- High value-added industry
(new technologies, finance,
medium firms). Although the
tax rate on regional
headquarters of multinational
firms will see an increase from
10% to 25% by January 2022.
- The current political
environment remains plagued
by corruption, violent crime,
and uncertainty surrounding the
presidential election due in
2022.
- The previous policy priorities
have been put into the
background due the ongoing e
covid-19 pandemic. Job
creation remains a policy issue,
and unemployment remains
elevated. The planned major
shift in industrial policy that has
not materialized.
(Economist Intelligence Unit,
2022)
- Singapore is known for its
stable political climate
- stability has translated to
peace and a better standard of
living
8
 - Singapore is a blend of 173.2% while mobile penetration chemicals, pharmaceuticals) - Singapore follows the
cultures and people – Malays, reached 148.2% - Member of trade organizations parliamentary democratic
Chinese, Indians and expats - Singapore is an early adopter of like Commonwealth of Nations, system where the Prime
from various countries (People new technologies, applications ASEAN, Non-Aligned Minister and the President are
of Singapore, n.d.) and solutions
Movement, APEC, East Asia the government and state’s head
- Singapore is a young and - It has a vision to have a
world-class, secure, and resilient Summit, PECC, WTO, and UN (POS, n.d.)
growing country and the median
5G infrastructure that will be the (Shaw, 2021) - local governments play critical
age in the country is 42.2 years
backbone of its digital economy - The Singapore economy is role in policy making and
- 100% of the population is (ITA, 2021) dominated by the service sector, regulations
urban (5,850,342 people in - Often regarded as the Asian which contributed approximately
- The highest goal of the
2020) (Worldometer, n.d.) technology capital 75.5% to the total GDP in 2016
(Lucintel, 2017) government is the country’s
- Happiest country in Southeast Singaporeans are highly survival and prosperity
Asia’ according to the 2018 connected, avid users of - Major goods transport and
World Happiness Report (WHR, technology and consumers of data trading hub (air and sea), - The government believes in
2018) - Eased communication and financial center (Coface, 2022) being proactive and thinking for
- top city in Asia in terms of increased connectivity - Dependent on exports and the future (GMS, 2015)
quality of living according to - Singapore is universally imports (energy and food) - Singapore has been able to
global human resource regarded as the #1 Tech hub in - It is among the most
attract some 9000 multi-national
consultancy, Mercer the Indo-Pacific, a key reason competitive countries with
educated and motivated workers companies, because it offers
- Family and community are the why 4,500 U.S. companies are in
the country - Strategic geographic location First World conditions in a
most important units in
Singapore despite materialistic - More than 10Mbps of and skill level of human Third World region (GMS,
goals broadband internet service is resources is moderate to high in 2015)
- High Literacy rate and available the Services sector
increased nation productivity - Research and development
- Good command of English and investment at both macro and
Chinese languages. micro level (ITA, 2021)

- Population: 70,087,990 as of - Innovations and technology - Thailand is an upper - Thailand is a Constitutional

Thailand Thursday, February 24, 2022 have played a big part in the middle-income country and the Monarchy.
and is equivalent to 0.9% of the recent economic growth in second largest economy in - Thailand presents a low to
total world population Thailand (Ma, 2021). Southeast Asia with a GDP of moderate political risk.
(Worldometer, n.d.) - There is an increasing difficulty $409 billion in 2013 (UNCTAD, - The Corporate Income Tax or

9
- Thailand has a warm and
welcoming culture but they are
also conservative in nature.
- Five (5) consumer trends that
are shaping Thailand’s
consumer landscape (Bharadwaj
et al., 2017):
● Growth is strong in
categories that offer
indulgences and
experiences.
● Brands matter, and
consumers are very
brand loyal.
● Women have substantial
buying power, even in
traditionally nonfemale
categories.
● A new social media
model is driving
e-commerce.
● Convenience stores are
shaping shopper
behavior.
- The dominant religion in
Thailand is Buddhism.
- People in Bangkok struggle to
achieve a work-life balance
mainly under the broader
themes: work intensity, society
and institutions, and urban
livability (Bangkok Post Public
Company, 2020).
in competing against lower cost
locations such as Cambodia and
Vietnam, while still lacking the
technological know-how and
human capabilities of moving
into more sophisticated, higher
value-added activities (UNCTAD,
2015).
- Thailand’s investment in R&D
and its financial support in STI is
lower than that of the more
advanced economies in the region
(UNCTAD, 2015). It is also
important to note that the R&D
investments usually come from
public expenditure rather than
from the private sector.
- According to WEF (2014 in
UNCTAD, 2015), Thailand has a
fairly developed IP system,
although there are considerable
delays in examining patent
applications and some uncertainty
about protection.
- The relative weakness of
Thailand’s innovation system is
reflected in several international
benchmarking exercises such as
the Global Innovation Index,
which show its modest
performance in comparison to
other Asian countries of similar
size and development (UNCTAD,
2015).
2015).
- Following a significant increase
in per capita income over the
past few decades, Thailand is
now experiencing a decline in
growth and is at risk of falling
under the “middle-income trap”
(UNCTAD, 2015).
- Projection = policy rate to end
2022 at 0.56% and 2023 at
1.00% (Focus Economics, n.d.)
- The unemployment rate in
Thailand reached 1.02 percent in
2020, a small increase from the
previous year. Most of
Thailand’s population is of
working age and employed.
About 46 percent of Thailand’s
inhabitants work in the service
sector, and another large portion
of the population works in
agriculture (O’Neill, 2022).
- Overall, Thailand’s economic
growth has resulted more from
capital investment and
employment reallocation from
the agricultural to the
manufacturing services sectors,
than from productivity gains
(UNCTAD, 2015).
CIT rate is 20% (PwC, n.d.).
- A foreign company carrying
on business in Thailand shall
pay 30% tax (reduced to 20%
until 2015) only on profit
deriving from business in
Thailand. However,
international transportation
companies shall pay tax at the
rate of 3% on gross receipts
(The Revenue Department,
2020).
- Thailand has implemented
bilateral trade agreements with
various countries. Implemented
a number of FTAs with its
trading partners (International
Trade Administration, 2021).
- According to Shiino (2012 in
International Trade Centre,
n.d.), Thailand’s exporters enjoy
few barriers to their exports, the
country’s high import tariffs,
which are even applied to a
small domestic production,
serve as an impediment to trade.
10
 - As of the 2019 census,
Vietnam Vietnam has approximately
96,208,984 citizens, with a
density of 295.0/km2 (General
Statistics Office of Vietnam,
2020).
- The following consumer
trends have seen an uptick since
the start of the COVID-19
Pandemic (Burrage, 2021):
● Food & Beverage
Delivery
● Books & Stationery for
Education & Home
Entertainment
● Electronic Devices &
Accessories
● Sports Apparel
- Vietnam has identified its
technological sector as a major
industry and socio-economic
driving factor, bringing in an
estimated $20 billion in 2019
(International Trade
Administration, 2021).
- Vietnam has already taken steps
in developing technological
institutions, with over 220 foreign
and 700 local tech companies
working in hardware, software,
and infrastructure development
(Shaw, 2021).
- Its leading technological
sub-sectors include
telecommunications, smart cities,
and cybersecurity, with further
opportunities in healthcare,
environment, electricity,
transport, and education.
(International Trade
Administration, 2021).
- Vietnam has an estimated
$1.047 trillion in total GDP, with
the per capita GDP being
approximately $10,755
(International Monetary Fund,
2020).
- Vietnam has raised its tariff
rates in the past several years,
though they are still well below
WTO bound levels. However, the
increase in tariff rates has
affected several businesses.
(International Trade
Administration, 2021)
- Corporate tax rates - 20%;
Personal Income tax rates -
35%-50% (income-dependent);
Oil & Gas Companies tax rates -
32%-50% (earnings-dependent.)
(Shaw, 2021).
- Vietnam operates on a unitary
Communist system of
government, with a single
socialist republic communist
party running the entire country.
However, it is worth noting that
the country follows a capitalist
ideology for its economy (Shaw,
2021).
- Vietnam prides itself in its
alliance to approximately 178
countries, as well as its
memberships in global
organizations such as ASEAN,
the UN, and WTO (Shaw,
2021).
11
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