JAKARTA: Global brands seeking to capitalize on their international status in Asian markets are fast finding the days of “easy money” are over as consumers in emerging markets turn to local brands.
Local brands have leapt onto emerging consumer trends more effectively than many global players, according to Shaun Rein, of China Market Research Group, who believes that multinationals may have underestimated their local competition in Asia.
“Local players have moved very fast on emerging trends that multinationals have missed, like healthy and e-commerce,” he said in comments to Bloomberg recently.
While international brands had the inside running several years ago in many categories such as beverages, cigarettes or fast food, that is now changing as consumers look to local brands: for example, a China Market Research Group report from 2011 showed that 85% of Chinese consumers preferred foreign brands. Just six years later, that percentage has halved.
Improved product quality and deep understanding of local tastes is now working in favour of homegrown brands. Indonesia’s instant coffee category, worth $1.3bn, is one such example. According to a Euromonitor report cited by Bloomberg, Javaprima – an Indonesian brand of civet coffee targeted at women and new coffee drinkers – gained around 12% to hit 33% category share in Asia-Pacific between 2012-2016, while Nestle slid 1.4% points to 16%.
Unilever has noticed the tide turning against multinational brands not only in Asia, but increasingly in other regions too. Social media advertising has also made it easier for challenger brands to compete using Facebook audience segmentation, for example.
“Consumers are changing, not craving for global brands just for the sake of it,” said Hemant Bakshi, president director of Unilever Indonesia, at a panel discussion at Bloomberg's Year Ahead Asia Conference.
“From a time when consumers used to look westward and look toward global trends, what’s important now is much more what’s happening within the country, in the smaller community.”
Sourced from WARC