- The Executive Asia
- Posts
- SEA Conglomerates Are Limiting Region's Growth
SEA Conglomerates Are Limiting Region's Growth
Southeast Asia's large, ageing conglomerates are limiting the region's economic growth.
The market value of investible stocks in Indonesia, Malaysia, the Philippines, Singapore, and Thailand is about $900 billion—less than half of India's, even though their combined GDP is similar.
Many conglomerates have deep political ties, which protect them from competition but stifle innovation.
Between 2013 and 2022, conglomerates in the region saw annual returns of just 4%, compared to 11% for more focused companies.
Though some conglomerates are branching into new sectors, their reliance on domestic markets keeps them less competitive compared to South Korea’s innovative chaebols.