4 DIMENSIONS TO GROW IN ASIA: THE MARKET

Nov 18, 2020

Texere Advisors was born with the purpose of sharing its experience in Asia with Italian and European SMEs which still find difficulties when facing the East.

The real obstacles to commercial success in Asia lie in the "invisible" details, in the daily management of negotiations, in the understanding of the social context and the dynamics that drive it, and of course in cultural differences.

All these are imperceptible elements are often underestimated and cannot be learned from a book. We have acquired these elements by performing hundreds, perhaps thousands of trips, meetings and negotiations. We rolled out projects and performed market restructuring, which taught us how to build trust and business relationships with Asian partners.

Retail is an emblematic sector as it means taking care of the brand, product, market, and consumer. Brand awareness, innovative and sophisticated marketing and communication, an efficient supply chain, impeccable consumer service, an always updated product, an international and dynamic management, the ability to continuously adapt to the changing context, are rules that are applicable to all industries.

This report summarises in a few pages the above-mentioned experiences, it does not aspire to become a golden rule to be successful in Asia, but more simply to provide essential guidelines to approach a market which is near and far at the same time.

The third dimension to analyse in order to grow in Asia is the Market.

What is important to keep in mind is that retailers prefer brands already known, or established in the domestic market.

Moreover, an omni-channel strategy requires discipline and consistency between all channels and during the entire sales cycle.

THE MARKET

When talking about the market, there are three key aspects to consider:

 

COMPETITIVE DISTRIBUTION

PREVALENCE OF MONOBRAND:

  • Single-brand distribution ensures presence, awareness and brand positioning
  • Limited presence of multi-brand retailers, mainly concentrated in Japan, Korea and Australia. More relevant for certain industries such as F&B and furniture

HETEROGENEOUS MARKETS:

  • Asia is not a homogeneous market, neither culturally nor economically.
  • Preferences and tastes can vary greatly from one country to another, while the distribution of wealth is unequally distributed.
  • The business culture varies from country to country, and so does the way of negotiating
  • Importance of managing the business relationship with the local partner

EXPENSIVE AND COMPETITIVE DISTRIBUTION:

  • Short and expensive rental contracts, from 1 to 3 years without key money, and frequent renewal of the store, every 3-5 years, push for continuousinnovation and investment
  • High rotation of signs in shopping malls
  • In case of indirect distribution, increasing requests from the partner for contributions for capex, marketing, stock
  • Need for an omni-channel strategy in some markets

OMNICHANNEL

PHYSICAL RETAIL:
  • Essential to have a pan-Asian expansion plan
  • The choice of the location is crucial for the positioning, visibility, and success of the brand.
  • The boutique must increasingly offer a sophisticated shopping experience
  • Importance of sales staff training

E-COMMERCE

  • Increasingly significant channel, especially in some markets
  • Does not replace but complements and strengthens physical retail
  • Requires many resources and must be controlled
  • Preferable in the presence of direct retail
  • Requires strong discipline in pricing strategy (online/offline)

TRAVEL RETAIL

  • Being present in international airports elevates the positioning of the brand

CONTINUOUS AND IMPORTANT INVESTMENTS

SOCIAL MEDIA AND MARKETING

  • Adaptation to the social platforms and styles of Asia
  • Continuous stratagems for customer loyalty (events, co-marketing, charities, promotions)

GLOBAL MARKETING

  • Define a clear brand direction with events and global presence

KOLS

  • An important method to be known and appreciated in a local way

 

Get in touch for a free masterclass with us via pr@texereadvisors.com

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