Cultural differences, religious sensitivities, subtle signals; these are just some of the issues to be taken into account when doing business in Asia Pacific. The differences with the West can be profound, the consequences of ignoring them, dire. Leading marketing and research professionals highlight some of the region’s idiosyncrasies.
BV Pradeep is vice president consumer & market insight (CMI) at Unilever Asia. Based in Singapore, he leads the CMI team for the Asia, Middle East & Central Eastern European region. He has been with Unilever for more than 17 years and was previously president of the Market Research Society of India.
Do business leaders in the US and Europe understand the impact of the cultural context in APAC on both marketing and research?
There is a huge vacuum in the western world in understanding consumers and markets in Asia and other developing and emerging markets. How to translate is a big problem. In fact, the term ‘translation’ is part of the problem. Business leaders should go to these markets, because what they need is an immersion rather than a translation. That’s how they can see what’s happening in a culture. For example, in Indonesian culture people believe in collectivism as the way to succeed. This is very difficult to understand when you come from an individualistic culture like America. Another example: in Thailand if there’s no fun or entertainment in an ad, they quickly get bored. There is a big challenge when it comes to these cultural differences, as their impact is huge. So immersion is key.
In which three APAC countries do you find the most exciting opportunities?
Apart from China, we mostly look at Indonesia, Thailand and Vietnam. These are the countries where consumers are going through the most significant improvement in affluence levels. The GDP is increasing and this translates down the line. Most importantly, the kind of FMCG we sell is most relevant to people in the lower to middle classes. As their buying power increases, opportunities for us are very exciting.
When entering these markets, do you find you get enough insights from your research suppliers?
We have a strong presence in developing and emerging markets, where over fifty per cent of our turnover is now being generated. This goes back many decades, so there is a grass-roots understanding of these markets. We have a strong relationship with our agencies, but we’ve never been alien to these countries. That doesn’t mean we don’t have our own set of challenges, because people do change and we need to keep track of that. We do a lot of marketing research, obviously, and then we also do a fair amount of directly connecting to consumers.
What are the most significant threats against the continued strengthening of APAC as an economic block?
This is a region that is susceptible to all kinds of environmental issues: earthquakes, floods, tsunamis. So unfortunately, every two to three years all the progress we’ve seen gets thrown back a few years. Furthermore, APAC could get stronger if the countries would form more of an actual block, but their individual stakes in matters prohibit that sometimes. Also, many countries are still grappling with a shortage of natural resources. Another big challenge is inflation.
How is generating customer insights different in APAC when compared to the US and Europe?
The APAC cultures are generally more collective, which means the responses are usually quieter. So they may tell you they really like something, and then not buy it. The fact is they didn’t really like it, but they just didn’t want to insult you. It’s easy to decode these responses wrongly. You need to know the cultural nuances. In collective societies people do depend on each other’s opinions; a few people disapproving of a product could lead to a lot of people doing so.
What are some of the peculiarities of doing research in Asia?
You have to be very careful with social and religious sensitivities. For instance, if you mistakenly refer to the king in Thailand disrespectfully, you can end up in jail. And if you offend people in rural parts of India, you could have a mass mob after you.
Cindy Mao is consumer insights director at VF Corporation Asia Pacific, a supplier of iconic apparel brands such as Lee, Wrangler and Vans. Based in China, Mao’s market research experience includes working with McDonald’s and General Mills.
What can you tell us about the cultural differences when doing business in APAC, and how they impact on both marketing and research?
There are two major countries driving the sales growth in Asia: China and India. The cultural differences with the US and Europe are noticeable. Take jeans for example: this product has a strong heritage and history, but the context is more fashion-driven here. In addition, jeans are associated with cowboys, whose image alone doesn’t strongly connect with the present Chinese urban lifestyle.
Where in APAC do you find the most exciting opportunities?
I’d vote for China, where there are hundreds of urban cities and continuous urbanisation. You may find the tier one markets extremely competitive, but tier two and three markets offer tremendous opportunities.
Even so, China is dealing with growing inflation. Does this impact consumer optimism?
Consumer confidence is impacted by the CPI inflation, however it remains comparatively stronger than in other countries. In addition, consumers are getting more sophisticated in looking for better value and paying the right price.
How is generating consumer insights different in APAC than in the US and Europe?
We still have to be mindful about data-collection quality of large sample sizes when quantitative studies are conducted. The response to conventional research methodology is getting much lower, whilst online is not yet able to replace it. The good news is that the agencies are working hard to be more efficient.
What is the biggest improvement that you’ve seen in market research?
The shift from academic to more grounded insights is ongoing. There are many smart and professional researchers in China who think harder and take clients’ business or marketing issues on board in order to bring great insights to life.
Lihong Qin is general manager of Customer & Corporate, Longfor Properties, China. Before joining Longfor Group, Mr. Qin worked for Procter & Gamble, Roland Berger Strategy Consultants and Anhui Chery Automobile Sales and Service Company.
What is the impact of cultural context on both marketing and research in the US and Europe?
In American and European companies data, especially quantitative data, plays a key role in decision making. However, in China – and Japan as well – people rely more on experience and put their trust in authority. People admire business heroes who have great instinct and sense, such as Steve Jobs.
In which APAC countries do you find the most exciting opportunities?
Of course, China. The urbanisation rate in China is around 50 per cent now. This is a huge advancement compared to ten years ago, when it was 20 per cent, but there is still a huge potential when you compare it to other advanced economies. People will continue to move to cities and towns, which will create tons of opportunities. The government-led adjustment to the economic growth model will also create opportunities, especially in the consumer goods industries.
The CEO of M&C Saatchi Asia, based in Hong Kong, is one of the most experienced international leaders in the world of consumer communications. During his career, he has led the creation of major international campaigns for brands like HSBC, Nokia, Microsoft, Shell, Unilever and Coca-Cola.
What are your views on the impact of cultural context on both marketing and research?
We are living in the dying days of corporate colonialism. There still remains an arrogant assumption that western business principles are the right ones, and that their infinite superiority will ultimately prevail. But business success in Asia depends on a willingness to accept that the region is built on different principles.
So how can we learn to understand the differences and translate them for leadership in the US and Europe?
These Asian principles are complex, but you can never understand any of them if you don’t understand four fundamental facts:
1. Culture: Today, there are more than one billion people in the West who inherit their intellectual influence from ancient Greece. Their culture is built on the Greeks’ unquestioned belief in the power of rational argument and the importance of the individual. Yet there are more than twice as many people who have inherited their intellectual and cultural values from the Asian traditions of Confucianism, Taoism and Buddhism. Their values are almost entirely contradictory. They are based on a belief in ‘the Way’ rather than ‘the Truth,’ the community above the individual, and a belief that consensus is more powerful than argument.
2. History: China and India have been the world’s two largest economies for 18 out of the last 20 centuries. The age of western economic domination began less than 200 years ago, and we can already see its decline. Both China and India are confident in their own importance and destiny. They do not aspire to become western. They aspire to learn from the best of the West.
3. Velocity: Never in the history of the world have so many people gone through so much transformation in such a short period. In China alone, roughly 600 million people have been taken out of poverty in the last 30 years. That’s about the size of Europe and the US combined, taken out of subsistence living, with many made middle class in one generation. In fifteen years, the Chinese middle class will reach a massive 800 million. And a recent Credit Suisse report indicates that Chinese consumption will reach US $16 trillion by 2020, with China shortly becoming the largest consumer market in the world.
4. Technology: China is already the world’s largest internet market, and the world’s biggest mobile market. There are already over 513 million internet users, including 250 million microbloggers, and more than 975 million mobile phone users in China today.
These four forces lie at the heart of the amazing opportunities and the immense complexities of Asia. And as every western company tries to navigate its way towards Asian success, the research industry has never been more necessary. But it must be an industry that approaches the region with humility, not arrogance, and a willingness to discover new ways to help uncover the unique motivations and influences of the most exciting and important continent in the world.