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Brands feel protectionist heat

News, 15 February 2017
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ASIA: International brands operating across Asian markets should consider whether they are prepared for the "politics of consumption" in a time of political uncertainty and growing brand nationalism.

The actions of leaders such as Donald Trump in the US and Rodrigo Duterte in the Philippines, as well as the flaring up of historical tensions, have the potential to affect how consumers respond to brands associated with particular countries, according to observers.

"Every single Northeast-Asian culture values stability as the platform of progress," noted Tom Doctoroff, former CEO of J. Walter Thompson Asia-Pacific. "When that stability is threatened or dismantled, you really have a lot of things that can go wrong and a lot of things that can spring from uncertainty," he told Campaign Asia-Pacific.

The economic nationalism of political leaders can easily rebound on brands from those countries, with consumer boycotts and public demonstrations of opposition taking place.

Different interpretations of history and territorial disputes are other sources of disagreement. In a recent case, China's official tourism body ordered travel agencies to boycott APA, a Japanese hotel chain, because its CEO had written a book challenging the casualty figures of the 1937 Nanjing massacre.

Chris Robinson, managing partner at research consultancy Anovax, also sees religion becoming a factor in certain markets.

"In Malaysia [we are] going to see a huge Islamic product market quite different from China or Western markets," he said. "Smart brands there will push the Muslim line very strongly, in other words halal products, and tap into religious brand positions.

"Politically and religiously orientated boycotting is going to be a problem for brands going forward—I could see that happening even in the Philippines."

While there is no one path for brands to follow – being foreign may be an advantage in terms of various associations: Italy for workmanship, Japan for innovation, for example – the tone of their communications will be vital; Chinese consumers may appreciate the quality control that foreign food brands apply but they don't want to see their own country denigrated.

Other options include the use of local opinion leaders and celebrities as ambassadors or the presentation of a "culturally odourless" brand without close links to any one nation; but perhaps the most effective may be putting down local roots.

"International brands can do more and communicate more on a regular basis on how their business has localised and contributed back to the local community to mitigate … political risk," suggested Yukino Yamamoto, managing director of Asia for Labbrand.

"It could be sourcing local produces for food and beverage brands, encouraging research, studies or education for engineering students, or taking part in local events or fundraising activities."

Data sourced from Campaign Asia-Pacific; additional content by Warc staff

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