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We spoke with Pete Read, Senior Vice President at GIA Singapore and a pioneer of strategic market intelligence in Asia with 16 years’ experience in the region, about market intelligence in Asia Pacific, the topic of a white paper he recently co-authored with Carol Mak, an Analyst in GIA’s Hong Kong office.
How would you characterize the diversity apparent in Asia-Pacific markets?
“Diversity in the region is apparent in multiple ways. Due to its size and geographical layout, as well as its different governments, local histories and cultures, Asia Pacific’s development has been uneven both across the region and within countries. For example, in 2010 China registered a total GDP of US$5,745 billion and Japan US$5,391 billion, however, average GDP per capita in China was a mere US$4,283, compared with US$42,325 in Japan – ten times higher.
China is seen as the ‘world’s factory’ with the largest labour force in the world (814 million), and an emerging domestic market. Japan and Korea are advanced, broad-based economies dominated by home-grown conglomerates and built largely on technology advances. South Asia, dominated by India, is one of the poorest regions on earth with an economy largely based on agriculture, but with rapidly emerging technology and service sectors. The countries of Southeast Asia (with the notable exception of Singapore) are characterized by lower levels of economic development and global success, and rely on rich natural resources and cheap labour forces. Australia and New Zealand are westernized economies closer in nature to the US than other Asia-Pacific countries. Finally Hong Kong and Singapore are physically tiny but economically important, single-city administrations heavily dependent on finance and international trade, acting as hubs for East Asia and Southeast Asia respectively.”
What are some of the challenges in conducting market intelligence in Asia-Pacific?
"Language diversity is one common challenge. There are over 3,000 languages in the region and no common language across the region and, in some cases, within individual countries. There are also large social and economic gaps between countries and sub regions, where differences in income, education, level of industrialization and globalization are extreme. These factors affect the methodologies used to study the markets, for example market observation and industry interviews can be done very efficiently in Singapore, but will take several times longer in a large and less advanced country like Indonesia.
Lack of secondary information, inconsistent information and questionable reliability of information mean that primary research is an essential in many cases. This in turn requires language capabilities and an understanding of the local cultures and business norms. For example, it is important to plan ahead and make formal appointments when meeting respondents in Japan, and management approval is often required. Any changes to the appointment can jeopardize the whole meeting.”
How can companies identify opportunities and minimise risk in the region?
“Companies expanding in Asia should choose to work with market intelligence partners who have local presence and contact networks. Quality control and data validation processes are important, and primary research capabilities – coupled with an understanding of how to implement such research in different countries – are essential.
Companies should conduct continuous market monitoring tailored to the business and tapping into local language sources as well as English sources. On top of this monitoring, market intelligence projects to inform specific strategic decisions should involve a partner with a proven track record of working in the target sectors and geographies – one who understands the company’s business and the linkages between market intelligence and business decision-making.”
Can you give us some specific examples of market intelligence in action in Asia?
“I’d like to highlight two types of MI, both of which are important in getting to grips with this region and making better informed decisions on business expansion and competitive strategy:
First, continuous monitoring of market and competitor activity. This type of continuous market intelligence forms the bedrock which is a general understanding and currency of knowledge among decision makers in the company, including top management, country management, sales and marketing, strategic planning, business development, procurement and others. For one of the big global logistics integrators, we monitor market news, competitive developments and industry reports, in English, Arabic, Japanese, Chinese and Korean across 17 countries in the region. The intelligence is delivered daily to 100 decision makers via customised email alerts and a secure web platform, keeping them up to date on macro-economic indicators, new regulations, competitor developments, M&A and trends in customer segments.
Secondly, issue-driven market intelligence assessments. These market intelligence projects address specific important strategy questions such as which countries and market segments to focus investment in, who to acquire, how to position the brand to compete with local players, what’s our addressable market size, how to appeal to different customer segments, and so on. Local primary research on the ground is key to developing a deep and detailed understanding. For a North American household appliances company, we looked at the opportunity to strengthen its presence in Asia with market assessments of Korea, Philippines and Thailand as three possible new markets to enter. The analysis included coverage of market size and forecasts by product, industry structure, demand drivers and growth, value chain, and competitor intelligence, as well as consumer attitudes, behaviour and brand perceptions. With this comprehensive set of information, derived from a full-circle research approach in which we interviewed industry players through the value chain and sector experts, conducted consumer focus groups and carried out retail observation, we were able to recommend a solid business expansion strategy, including country priorities, product focus and price positioning, optimal channels, and the fastest route to market.”
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