Thailand, Hong Kong or China: How to Separate Market, Execution and Production Roles
Entering the Asian market presents European product companies with complex decisions. Choosing where to sell, where to manage operations, and where to produce goods are distinct challenges. Treating these as separate decisions can unlock strategic advantages and reduce risks. This article explores why companies should separate the target market, execution platform, and production base. It also explains the roles Thailand, Hong Kong, and China can play in this model, using the SABE–ONNIA–Ku-Malu framework as a practical example.
Why Separate Market, Execution and Production Roles?
Many companies make the mistake of assuming one country can serve all purposes: market, operations, and manufacturing. This approach often leads to inefficiencies, regulatory hurdles, or supply chain bottlenecks. Instead, treating these roles separately allows businesses to:
Tailor strategies to local market needs
Optimise operational efficiency and compliance
Leverage cost-effective and scalable production
Each decision depends on factors such as product type, regulatory environment, customer base, ownership structure, supply chain complexity, and commercial goals. No single country is universally best for all roles. The right structure depends on the company’s unique situation.
Thailand as a Target Market and ASEAN Base
Thailand offers a growing consumer market with rising purchasing power. It is attractive for companies targeting Southeast Asia due to its strategic location and membership in ASEAN. Thailand can serve multiple roles:
Target Market: Local demand for consumer goods, healthcare products, and technology is expanding.
Local Operating Base: Companies can establish regional offices or subsidiaries to manage sales and marketing.
Importer/Distributor Location: Thailand’s infrastructure supports import and distribution across ASEAN countries.
ASEAN Expansion Base: Its trade agreements facilitate easier access to neighbouring markets.
For example, a European company selling health supplements might choose Thailand as the initial market to test products and build brand presence before expanding further into ASEAN.
Hong Kong as an International Execution Platform
Hong Kong remains a preferred hub for international business execution. Its legal system, financial services, and logistics infrastructure support complex commercial activities. Hong Kong can perform several key roles:
Licensing and Intellectual Property Management: Holding brand ownership and licensing rights in Hong Kong provides legal clarity and protection.
Procurement Coordination: Managing supplier contracts and purchase orders from Hong Kong centralises control.
Logistics Hub: Efficient port facilities and customs processes enable smooth import-export operations.
Commercialisation: Hong Kong’s business environment supports marketing, sales agreements, and partnerships.
In the SABE–ONNIA–Ku-Malu model, ONNIA Worldwide operates from Hong Kong to manage licensing and commercialisation of European intellectual property, coordinating with Asian suppliers and local markets.
Hong Kong’s port facilities support international logistics and supplier coordination.
China as a Manufacturing and Supplier Base
China remains the world’s leading manufacturing hub. Its strengths include:
Production Capacity: Large-scale manufacturing of components, tooling, and finished goods.
Supplier Network: Extensive ecosystem of suppliers supporting diverse industries.
Cost Efficiency: Competitive labour and material costs enable scalable supply.
Innovation and Tooling: Advanced capabilities in tooling and product development.
European companies often rely on China for production while managing other functions elsewhere. This separation allows them to benefit from China’s manufacturing strengths without being tied to its market or regulatory environment.
The SABE–ONNIA–Ku-Malu Model Explained
This model illustrates how separating roles can work in practice:
SABE: Represents the European intellectual property, invention, and licensing entity. It owns the product designs and patents.
ONNIA Worldwide: Based in Hong Kong, ONNIA handles execution and commercialisation. It manages licensing agreements, supplier contracts, and logistics.
Asian Suppliers: Located mainly in China, these suppliers handle manufacturing, tooling, and supply chain execution.
Ku-Malu: The market-facing product brand sold in Thailand and other ASEAN countries.
This structure allows each entity to focus on its strengths. SABE protects and develops IP. ONNIA manages business operations and market access. Asian suppliers deliver cost-effective production. Ku-Malu builds local brand recognition.
Choosing the Right Structure for Your Business
The best approach depends on several factors:
Product Type: Regulated products like medical devices may require local approvals and specialised distribution.
Regulated Activity: Some countries have strict rules on ownership, licensing, or manufacturing.
Customer Base: Understanding where customers are located guides market selection.
Ownership and Control: Legal and tax considerations influence where companies hold assets or IP.
Supply Chain Complexity: Proximity to suppliers and logistics infrastructure matters.
Commercial Strategy: Whether the focus is on direct sales, licensing, or partnerships affects the setup.
No country is inherently better. Thailand, Hong Kong, and China each offer unique advantages for different roles. The key is to assign roles based on strategic fit rather than geography alone.
China’s manufacturing lines provide scalable production and tooling capabilities.
Final Thoughts
The right question is not “Which country should we choose?” but “Which role should each location perform in our Asia execution model?” Separating the target market, execution platform, and production base allows European companies to build flexible, efficient, and compliant operations in Asia.
If you are planning company setup, supplier commitment, production, product registration, or market launch in Asia, consider developing an Initial Action Plan. AD ASIA Consulting offers strategic guidance to help you define the right structure and roles for your business. Contact us to explore how we can support your Asia project development and trading success.
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