Five lessons when marketing in Asia
Tied into the launch of The Marketing Society Asia we asked Hometown London’s commercial director, Sean Singleton, to interview one of our Founding Members in Hong Kong, Jonathan Cummings.
Jonathan is managing director of Start JG's Hong Kong office and has worked in Hong Kong and Asia for the last seven years.
What is the first lesson marketers and brands need to be aware of when first working in this region?
The biggest and most important point is the diversity of the whole region. For example, Hong Kong and Mainland China are vastly different – different languages and very different cultures. Hong Kong has been a trading centre for hundreds of years and was under British control for 150 years. Therefore its consumers are very brand savvy and relatively Western in their attitude. China has been at the other end of the economic spectrum until recently and therefore the consumer market is far less mature than Hong Kong or other parts of Asia in many ways.
Add in Indonesia, a hugely diverse country in itself with a population of some 250 million, along with Japan, India, Malaysia, Myanmar, Thailand, Australia etc and you can start to appreciate the incredible variety of languages, cultures, customs and economic environments. Clearly brands cannot treat Asia as one homogenous region although many do try.
OK great. What is your second tip?
Well it’s probably worth singling out China, as it’s the powerhouse of the Asia, and arguably the world economy going forward. There are books galore on marketing in China as the market develops at a startling pace with domestic and international brands battling for market share.
Within China itself there is such diversity, and the population numbers are mind boggling by European standards. A lot of people focus on the four ‘Tier 1’ megacities of Beijing, Shanghai, Guangzhou and Shenzhen, but there are over 200 cities with a population of over a million people. In the whole of Europe there are only 35. And it is estimated that there are some 135 million consumers earning average salaries equivalent to city dwellers living in the ‘hinterland’ outside of these cities.
Digital is a really interesting area. For instance, smartphone penetration is much higher than the global average and there is a far broader portfolio of phone brands, many of which only exist in the domestic market. A large percentage of the market went straight to mobile, bypassing desktop internet which has resulted in different behaviours to those in the west. There are different search engines (Google only has a small minority share of the market) and social media platforms, not to mention the very restrictive censorship approach taken by the Chinese Government.
Well I suppose this is called the Chinese Century for a reason..What is your third lesson?
As Asian markets develop, more and more Western brands are coming East looking for growth. As outlined already, there are huge differences in these markets and therefore it is vital to consider what is the most appropriate brand positioning and brand proposition. There are many mainstream British brands that have positioned themselves in Asia at a much more premium level; Clarks Shoes and Mothercare being two that spring to mind. Much of our work is for British brands, which are held in very high esteem in Asia. People really buy into the history, craftsmanship and heritage of British products and therefore it makes sense for brands to leverage this.
For instance we are currently working with Costa Coffee who are growing rapidly in China, a market still exploring and discovering coffee culture. Costa’s advantage lies primarily in the quality of its coffee, but importantly also in the expertise of its baristas and the quality of service which consumers associate closely with its British roots.
What about the issue of western brand names that might translate poorly?
Good point, and one than has created much amusement over the years. Whether it’s brand names or straplines, one has to be extremely careful when launching into Asian markets. Peugeot’s translated name Biao Zhi sounds unhappily like the regional slang for prostitute in southern China, and Pepsi’s ‘Come alive with the Pepsi generation’ translated into ‘Pepsi brings your ancestors back from the dead’.
It’s not just China. When Superdry, a Japanese-inspired British brand launched into Japan, their translated brand name made no sense to native Japanese. And the same is true of Asian brands going west as Japan’s second largest tourist agency discovered when they started receiving requests for unusual sex tours. Kinki Nippon Tourist Company soon began marketing itself as KNT.
Do you think in the future we'll see Eastern brands coming West, rather Western brands coming East?
Without doubt, in fact that leads to my fourth lesson. For example in China, they have been good at copying Western brands in terms of product quality but now they are starting to get better at creating brands.
We have seen global brand powerhouses come out of Japan for decades, and more recently from Korea and Taiwan. But in the next decade we will also start to see more global competition from Chinese brands, especially in consumer electronics. Lenovo are already leading the way, enhanced by their acquisitions of IBM’s PC business some time ago and more recently Motorola. TCL, ZTE, Haier, Huawei and others will not be far behind and I wouldn’t be surprised to see retailers such as Suning start to expand their horizons.
At Hometown, our client Rakuten is a large Japanese e-tailer who has been buying Western digital brands like Play.com and Buy.com. They are part of a wave of Eastern brands with big global ambitions.
That’s a very good point. Alongside organic international growth of Asian brands, many are also using acquisition to drive global growth. New World Hospitality, part of the huge Hong Kong based New World conglomerate recently purchased Rosewood Hotels for a reported US$1.1bn and automotive firm Geely bought Volvo. Historically, Chinese firms haven’t needed to look far outside their huge domestic market for growth, or haven’t felt they had the product to compete internationally. But that is changing fast.
So, what would be your fifth and final tip?
You cannot hope to understand Asia from afar. It’s too vast, too complex and moving too fast. Having a base in Asia and spending time on the ground in the different markets is absolutely key.
And read more from Sean in our Clubhouse.