How to Navigate Regulatory Complexity in Asian Countries

Cultural Competence and Relationship Building

Cultural Nuances play a vital role in regulatory compliance in Asia. Fostering strong relationships with regional stakeholders, government officials and business partners is crucial. In most Asian nations, regulatory decisions are often influenced by the trust the other party can instill in them. While this may sound off to Westerners who go by the book, it’s a norm in Asia. Investing time and effort to understand and respect local customs has proven to go a long way.

One major factor that led to the failure of the world’s largest retail chain in South Korea was its failure to understand South Korean consumer preferences. Meanwhile, McDonald’s in Japan was successful due to the company’s deep understanding of the local culture, and they designed a custom menu that was, once again, strongly influenced by their local cuisine. Demonstrating cultural sensitivity has proven to yield tremendous business success in Asia.

"Facilitating cross-border collaborations, local expertise plays a crucial role in comprehending the market nuances and assisting in developing tailored strategies," Amandeep Kochar, President & Group CEO, Baker & Taylor.

Adaptability and Flexibility

Due to Asia’s growing market status, international businesses are gathering en masse. This label has led to a stage where the local regulators continuously update the regulations owing to the complexities arising in the aftermath of such expansions. Experts employ a culture of adaptability within existing Asian branches and have dedicated specialists to monitor, inform and act accordingly. Adaptability to such changing regulations has proven to be a key metric in staying relevant in the markets.

The largest ride-hailing company in the world failed in China as they could not adapt to the changing regulations thrown their way. Meanwhile, Airbnb’s venture in SEA is a notable example of adaptability. They had adjusted their business model to align with local regulations, like introducing partnerships with local hotels, which was a primary requirement in Thailand and Singapore.

"Understanding the type of change required, assessing the organization’s readiness for change, and evaluating the company's culture are essential components to consider,” Rico Wang, Chairman of the Singapore Chamber of E-Commerce.