Some of the bigger global developments in the last few decades have revolved around the rise of Asia.
Today, even with the pandemic disrupting the region’s growth, there is still much optimism that the region will bounce back and continue to grow – in fact, estimates from the CEO of Singapore-based DBS, Piyush Gupta, indicate that Asia will continue to grow “at four to five per cent” over the next few years. In Gupta’s words, Asia will “still be the biggest engine, or delta, of global demand”.
Additionally, COVID-19 has been the driving engine for rapidly shifting business from traditional retail to e-commerce, causing a massive stipulation in the markets to buy products and services online.
This demand is driven by the region’s rising affluence among its growing middle-class, its integration into global flows of trade, and its quick uptake of digitalisation – key reasons businesses from across the globe are gravitating towards Asia.
However, entering the region requires a winning plan and strategy that is tailored to the specific markets a business is looking to set foot in – something which many businesses often fail to consider when looking to break into the region.
As a continent, Asia is made up of diverse markets, each with their own set of cultures, purchasing habits, ways of working and doing business, regulatory environments, and economic development. What this means is that how you approach doing business in Indonesia will be very different from how you do it in the Philippines or India.
From my experience refining e-commerce strategies across the region, here are some insights I’ve gathered over the past 12 years that may be useful if you’re looking to build or expand on your business presence in Asia.
1. Understand who your target consumer is
Given how fragmented and diverse Asia is, it is extremely important to have a good understanding of your target customers before entering a market. Study their consumption and purchasing habits, their wants and needs, their price sensitivity, as well as where they are getting information from.
While consumers in the region rely heavily on social media to shop, you need to be very clear about which of the many platforms they are using, and which are most effective. For example, consumers in Thailand use Line to shop and communicate with merchants, while Chinese consumers use the “Super-App” WeChat.
Getting a grasp of the habits and tendencies of your target consumer can help you better localise your business and marketing approaches. Knowing what your customer is looking for means you can best cater to the market’s expectations of suitable product or service offerings and price points.
2. Know your local competition
Entering any Asian market today means that you most likely have to face stiff competition from homegrown hyperlocal players who have a better understanding of the local business and customer landscape. And often, these players can also hold their own against global businesses.
Take Go-Jek in Indonesia for example. It thoroughly recognises and understands what consumers in the market need and has used this knowledge to build services that are tailored to solving the country’s biggest challenges – the movement of people and goods across a wide and congested space. They realised at a very early stage that providing a ride for their users was only the starting point before adding Food Delivery, Delivery Services and even Payments to their product portfolio.
As such, in order to compete with the well-established players, businesses need to know who the local competition is, their competitive advantage, and what problems are still waiting to be solved for consumers.
Analyse this as part of market entry planning to assess the gaps in the product or service offerings that your business can potentially fill, or decide whether entering a market is even a good move for your business at all.
3. Find the right partnerships locally
For international businesses, building an understanding of local contexts and ways of working is hard to do overnight. To help with this process, having the right local partners can make a huge difference to the success of an expansion into a new country and gaining market share.
For brands, this means looking for the right partners that meet their needs.
This includes online and offline retail channel partners, whether it is a local marketplace strategy, a brand.com, or entering malls or ‘mom-and-pop’ shops. In addition, getting delivery right is crucial for building a satisfied customer base, so finding a last-mile logistics provider who can optimise routes, provide cash on delivery, track orders and deliveries using local knowledge of distribution networks is important. These are only two of areas for consideration – we haven’t even covered warehousing and inventory management.
These local partners will have a good understanding of trends and challenges in the market and can work with you on the different ways the business can capitalise on potential opportunities.
I’d also recommend to first be clear with these local partners what your business objectives are and align your interests as these help to set a strong foundation for the partnership to mutually grow. Getting your priorities right with local partners early on can make things easier for everyone involved.
One thing I have learned is that setting foot in Asian markets is easier said than done, but it definitely can be done. The region’s diversity means businesses need an Asia-specific model to overcome barriers to entry and succeed.
Ultimately, local knowledge and understanding and a network of partners can set you and your business on the right path to navigating and achieving business growth across the region.