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Marketing is AEC challenge

News, 05 January 2016

JAKARTA: The official advent of the ASEAN Economic Community (AEC) on New Year's Eve is not expected to have any immediate effect but marketing may be a significant challenge for local brands seeking to take advantage of the new ten-nation market.

The low-key launch was described by one commentator as "an important new chapter rather than [an] inflection point", with the effects being felt over the next decade rather than overnight.

Joseph Incalcaterra, Asia-Pacific economist at HSBC Global Research, also observed that "the free trade in goods is largely a fait accompli", with liberalisation of services and investment likely to bring about the most tangible economic benefits in coming years.

That view was echoed by Adhi S. Lukman, chairman of the Indonesian Food and Beverage Association (Gapmmi), who told the Jakarta Post that most ASEAN countries had reduced the majority of tariffs on goods to zero over the past five years.

"What we need to look at is improving our human resources for marketing," he said. "Traditionally, people sell products overseas by literally exporting the products [without marketing them]."

His counterpart at the Association of Indonesian Soft Drink Producers (Asrim) voiced similar concerns, although in an inward context.

"We've recently seen a number of neighbouring countries' beverage brands coming in the country," said Triyono Prijosoesilo, and he expected that the main task for local beverage companies – and other companies generally – would be in stepping up their marketing to meet the challenge of this new competition .

While businesses are gearing up to address the emerging ASEAN single market – although the true single market vision remains some years off – consumers remain blithely indifferent to the whole thing.

One commentator remarked that "ASEAN has no meaning for the majority of the 600m citizens living in the region … They have no real feeling of being a member of an ASEAN community".

Data sourced from Jakarta Post; additional content by Warc staff