Despite having more than 50% of the world’s population, just 10 brands from Asia made it onto Interbrand’s 2016 Best Global Brands (two in the top 10: Toyota and Samsung), and that's with the addition in recent years of two brands from China (Huawei and Lenovo), reflective of its own dynamic emergence.
The historical reasons for such a lack of global brands is widely known and discussed: limited global appeal, growing populations at home (for emerging markets), a copy-cat mentality in many cases, a focus on low cost manufacturing, a historical preference for many Western brands, marketing and brand building at a tactical level, over-diversified and siloed organizations… The list goes on.
To what extent is this changing, and what is the opportunity for Asian brands moving forward? To help answer this, we analyzed Interbrand data, going back five years, from the annual Best Brands studies in each of our major Asian markets.
The overriding insight is that, while total brand values in all markets grew over that five-year period, a consistent weakness in rate-of-growth was engagement. Interbrand defines engagement as “the degree to which customers and consumers show a deep understanding of, active participation in, and a strong sense of identification with the brand.”
A key issue for many of the larger, conglomerate businesses in Asia remains the sheer extent of their diversification, making it very difficult for businesses to define and express a clear brand definition in the first place.
A more fundamental issue is a lack of purpose beyond being “number one” or “beating the competition.” These things are important but are of interest to only a small number of people inside the organization, and of no interest to customers. A more meaningful purpose should center itself around doing something of direct benefit to customers, or the world at large. Something that ultimately people can unite around and identify with, and through which the brand owner can create a clear brand definition and deliver meaningful experiences.
The opportunity for Asian brands
There is no denying in recent years that we have entered a period of accelerating change—some would say a new age. From rapid technological advancement to demographic shifts and changing customer expectations, we are witnessing the emergence of new tech-driven brands that are fundamentally transforming the business landscape, and leading the way in terms of customer engagement.
Nowhere is this change more emphatic than in China, where ambitious Chinese tech entrepreneurs have created a new level of personalized consumer engagement, in ways that drive purchase at unprecedented rates.
For example, “buy” buttons are routinely embedded and woven seamlessly across different e-commerce platforms and different brands, in ways that are tailored to an individual’s online journey (to what extent this starts to feel irritating or even invasive for some is perhaps an impending issue for China’s marketers).
In tandem, people in Asia are travelling more, and while the region is still far from homogenous we see an ever-increasing flow of tastes, trends, and culture from market to market, which transcends national borders. This is a relatively new phenomenon and, coupled with changes in behavior brought about by technology adoption, is creating a potent mix of opportunities for Asian brand owners.
Leveraging big data and insight-driven marketing
Brands in Asia will win and engage better with customers if they use big data in a more meaningful way. Data needs to be converted into insights around customers and those insights then used to create new value through innovating products and services.
Clearly, the tech companies are leading the way in this respect by leveraging technology tools in ways that are relevant to consumers, to drive choice, loyalty, and performance for their products and services.
According to Bloomberg, more than two-thirds of Chinese people use Tencent’s messaging apps, WeChat and QQ, for everything from texting to shopping, flirting, dating, watching videos, playing games, and ordering food and taxis. Indeed, Tencent has reached a point where it is looking to expand globally in order to maintain its impressive growth rate.
A constant flow of new tools and processes for analyzing data is making insight-driven analytics more accessible for all companies, regardless of their size and resources. Given its importance and the desire for more personalized and curated experiences from consumers, this investment should be a priority for all of Asia’s brands.
Going local, everywhere!
Each market in the Asia region has its own unique way of conducting business and its own unique cultural characteristics. However, we see the challenge of localization that regional brands currently deal with dissipating over time, allowing brands to be far more versatile with a huge ability to flex.
The customer is shifting to the center of a rapidly evolving, connected ecosystem in which brands create truly personalized, curated experiences around individuals across diverse markets. We see greater personalization taking place across many sectors. In retail for example, Uniqlo, with its insight capabilities is producing various new apparel products at fast speeds with incredibly wide semi-customized product line-ups. This impacts design as well as “needs based” innovation, through highly functional materials such as Heat-tech and AIRism.
In Korea, the “Please do it for me” delivery service is well known as a personalized butler service for the masses. While general delivery services for food, documents, or groceries have proliferated in Korea, the “Please do it for me” service has evolved to provide customers with a seamless “butler” experience. If a customer wants to celebrate his or her anniversary, for example, but has no time to prepare, “Please do it for me” can buy the gifts, make the restaurant reservations, and generally take the stress out of the day.
Connected experiences keep consumers engaged, and as such technology itself will reshape the operating model of many businesses. The rigid and outdated Asian models built around silos, hierarchies, process, and policy must be discarded so that companies can truly engage with customers. New business models will need to be more organic, transparent, and even porous as the interactions between brand owners and their customers evolves ever more. Culturally, this is a major challenge for Asia’s more traditional businesses.
Adopting a protectionist and control-oriented mentality limits possibilities. Businesses will need completely new skills and new cultures. Left brain-orientated, compliant individuals who have grown up following rules in hierarchies will find their skills diminishing in value.
Creators, adaptors, connectors, innovators, and entrepreneurs will offer the skills and talents that will be prized, and which will be most important in building successful and sustainable businesses and brands.
The large internet companies have a head start in this respect and will further cooperate with different industries to create new value for consumers. For example, these brands are cooperating more and more with electronics manufacturers such Sony and Panasonic to develop Smart Home concepts, where the individual home becomes an ecosystem in itself.
The diversified advantage
In fact, many of the large diversified Asian conglomerates have the benefit of multiple businesses in what are now complimentary sectors (technology and digital being the binding agents). Samsung is a good example, having expertise in mobile smartphone devices, home appliances, computing, cameras, TV, and audio, as well as business and industrial products/solutions. Integrating these areas of expertise is already underway (home appliances can now be controlled via smartphones, for example) – and in theory the possibilities are endless.
Panasonic also has business interests that spread across appliances, eco solutions, AVC networks and automotive and industrial solutions. It is leveraging customer insights from its consumer business to inform its enterprise businesses and making large investments in areas such as smart-town initiatives, cutting edge technological breakthroughs that make work easier such as robotic suits to aid human movement in farming, construction work and nursing care and a partnership with Toyota to co-develop cloud services for next-generation telematics systems that link cars to home appliances, These initiatives and more by similar brands are changing the world, somewhat behind the scenes.
If these behemoths can overcome their internal silos and cooperate with one vision (built upon a customer-centric purpose), the age of the diversified conglomerate might well be back upon us.