In under a fortnight, we will usher in a new year. Time to wind down, take a break and reflect on what will unfold in 2013. For those wishing to pursue business opportunities in Asia, here’s our take on what you have to heed. For now, happy holidays. 

1. Low cost continues to drive change

The low cost effect is already in full swing in South-east Asia and competition will be intense next year as Scoot gets up to speed, players consolidate and take position in Indonesia and India (Tiger buys into Mandala; Etihad scoops up an ailing Kingfisher) and AirAsia and Jetstar battle it out for market share. Already the AirAsia group flies more passengers (18 million) than Singapore Airlines (16-17 million) and this week, it put in a purchase order of 100 more A320 aircraft, pushing its total fleet size to 475 narrow-bodies.

Watch the space in North Asia in particular. Japan gets into full stride. China’s Spring Airlines expands internationally. Korea’s Jin Air and Jeju Air start exploring overseas points. Jetstar Hong Kong (a partnership between Qantas and China Eastern) takes a go at the former British territory; and Cathay Pacific may respond with its own low cost venture.

Better action promised on this front than in Peter Jackson’s “Hobbit: The Unexpected Journey.”

2. The rise of China’s affluent

This is a market everyone selling anything from luxury handbags to premium beds to wild dreams is going after.  In its “Age of the Affluent” report, the Boston Consulting Group says that “at 120 million strong and with $590 billion (RMB 3.7 trillion) of buying power, the affluent class is not yet as large as the emerging and current middle class combined, nor does it have the same spending muscle. But it is growing fast.”

By 2020, it projects that this segment will grow to 280 million, which will account for more than 30% of its urban population.

The report says that the spending of the affluent will grow fivefold to $3.1 trillion, about 35% China’s total consumption and more than 5% of global consumption. It will also be nearly as much as Japan’s total consumption, 28% greater than that of Germany, and three times more than South Korea’s total consumption.

These numbers will seduce, and burn, many, just as in Zhang Yimou’s “House of Flying Daggers”.

3. OTAs get set for battle

MakeMyTrip buys hoteltravel; Webjet buys ZUJI; Priceline buys Kayak – all harbingers of a big battle that will be fought on Asia’s shores. Webjet will go head-on against Wotif as the two Australian-based businesses make their move in “The Asian Century”, as declared by the Australian government. Wotif has the first mover advantage and has appointed Scott Blume, the guy who launched ZUJI all those years ago, to take them further. But Webjet will come in all guns blazing – this is a company used to fighting hard.

MakeMyTrip has to move beyond “the India story” and will make further acquisitions to buy growth. Priceline Group will step up activity in Asia and use its two brands, booking.com and Agoda, to scale across and dig deeper into markets.

AirAsia Expedia, the joint venture that was supposed to be a game-changer at the time it was signed, has not scaled to the extent dreamt of by its chiefs but don’t write them off just yet. The hero may yet make a strong comeback despite being weakened – look at James Bond’s rise from drinking tequila with scorpions to hero status in “Skyfall”.

4. The fun will be in the emerging markets

Beyond the Chindia story, the juicy narratives, all with special local flavours, will be told in markets such as Indonesia, the Philippines, Vietnam, Thailand, Myanmar, Laos and Cambodia.

Mobile and social will lead change in Indonesia, and local players will hold strongly to their domain but competition from outside is coming in as global players jostle for position. Local players from Vietnam to Indonesia who thought it would be easy to get into the market will find it tougher going as big brands bring in their resources to bear.

Competition will be particularly intense in Vietnam – look to global brands setting up local language websites. Phuong Tran Ming, CEO of Chudu24, predicts that “big guys: Agoda, Expedia, Hotels.com, Booking.comwill have Vietnamese sites and start doing marketing in Vietnam” and that “ new local sites will launch every month” and “Groupon-like models will take a piece of the cake”.

Thailand’s starting to see some digital start-up activity – a new fund just launched this month M8VC Co which plans to invest at least THB300 million (about US$9.4 million) into tech startups in the country. Small but significant step. And while all the attention’s focused on Myanmar right now, Laos and Cambodia will also make progress in their own inimitable way.

Welcome to the “Best Exotic Marigold Hotel” with its array of unique characters and stories.

5. Make local friends 

The best travels are when you have friends in local places to show you around. The same with doing business in Asia. If you’ve invested in friendships over the years, then they will do you well in 2013. If not, the going will be tougher. The good news is, more and more players are getting into the travel space which means more friends to be made. Build and INVEST in your networks not only for 2013 but the years beyond because Asia’s on the rise.

“The Social Network” must go from virtual to real.