Challenger brands see mixed results in Asia

21 April 2010

HONG KONG: Challenger brands are currently making more of an impact in markets like China and Malaysia than in India.

Adam Morgan, the founder of eatbigfish, the consultancy, has written extensively on the topic of challenger brands, and has now argued that regional differences must be taken into account in Asia.

"With Asian brands in particular, you can't succeed with the Western model," he said.

More specifically, Morgan suggested many firms may be seeking to work against conventions within their specific category rather than taking on major rivals.

"It is certainly true that challengers need to challenge something in the category in order to succeed … but it's really about the way in which they challenge it," he said.

According to Morgan, Li Ning, the Chinese sportswear manufacturer, fits the overall profile of a challenger brand, having asserted itself against multinational operators like Nike and Adidas.

While Li Ning has been accused of mimicking its competitors' strategies, one specific way it sought to stand out was by tapping into the patriotic feeling that accompanied the 2008 Beijing Olympics.

China Unicom, the telecoms firm, similarly boasts many of the characteristics of a challenger brand, having secured exclusive rights to sell Apple's iPhone as it aims to steal share from China Mobile.

Meanwhile, Mengniu, the dairy manufacturer, has adopted a range of distinctive and innovative marketing techniques, both online and offline, in an effort to connect with consumers.

BYD, an automaker, has emphasised its eco-friendly credentials and based its brand around Wang Chuanfu, its ceo, who has a profile in China similar to that of Steve Jobs globally.

However, Chris Reitermann, president of OgilvyOne in China, argued that media budgets often play a key role in deciding which products go on to ultimately achieve success.

"In a market such as China, one can be a challenger but in most segments it cannot be done without a serious level of investment," he said.
"Creativity and competitive drive can help a brand stand out and spend less on buying awareness, but history has shown that spend often wins the day."

In Malaysia, Air Asia, the low-cost airline, has attempted to position itself as being the polar opposite of the more established Malaysian Airlines.

DiGi, which was launched in 1995 and is active in the country's mobile sector, has used a broadly equivalent strategy as it takes on its more established rival Celcom, which was founded in 1988.

"We dare to be different, we have the guts to try new things," Johan Dennelind, DiGi's chief executive, said. "With the DiGi brand you can do that because it is unconventional."

India is one country where challenger brands have been forced to adapt to broader societal traditions, Morgan's research has shown.

"[If] you are trying to succeed in India, you can't do it by simply challenging the generation above you; that's not culturally acceptable. So you must challenge conventions in a different way," he said.

Virgin Mobile, another telecoms specialist, is one brand that has discussed subjects which are thought of as "taboo" by older Indians not by younger audiences.

Data sourced from Media Asia; additional content by Warc staff