SINGAPORE – February 5, 2024 – While emerging brands have made inroads capturing market share from established brands, Bain & Company’s latest analysis shows many established consumer product brands continue to achieve success.

The report studied established (also known as incumbent) consumer product brands’ market share in 23 product categories across 11 Asia Pacific markets over a five-year period (2018 – 2022).

It revealed that among 253 category and market combinations Bain studied, large incumbent brands lost market share in 44% of cases (defined as losing more than one percentage point of market share in aggregate) against emerging or insurgent brands, held steady in 28% cases and won (gained more than one percentage point of market share in aggregate) in 27% cases. There was no single category where incumbents lost share across every Asia Pacific market, nor a single market where they lost share across all categories.

When looking at markets, Malaysia, the Philippines and India emerge as the top three most favorable markets for incumbents, while South Korea, Singapore, and China had the most favorable environments for insurgents. In Malaysia, for example, established incumbents won or maintained share in 74% of 23 categories Bain tracked, whereas for South Korea, incumbent brands lost ground in 70% of the categories.

“The trend could be linked to the channel dynamics across markets. For example, the thriving e-commerce sector and well-established networks of third-party suppliers are making countries like South Korea particularly conducive for emerging consumer brands’ growth. On the other hand, the dominance of traditional trade and relatively low penetration of e-commerce make countries like the Philippines more favorable markets for established brands,” said Jichul Kang, head of Bain’s consumer products practice in South Korea.

From a category perspective, Bain’s analysis revealed that the beauty and personal care sector was the most receptive to insurgent brands overall, in stark contrast to other sectors, including alcoholic and non-alcoholic beverages, food, and home care.

Bain’s report indicates that while market, category characteristics, and macro situations contribute to incumbents’ success to some extent, what matters most is how they manage their categories and brands. Successful incumbent companies are adept at incorporating the most effective strategies from insurgent competitors while leveraging their inherent strengths. They have harnessed their scale to their advantage. They have skillfully navigated typical pitfalls, such as complexity and inertia, which often beset large organizations. Additionally, they have shown a capacity for innovation, investment, and execution.

For example, when driving portfolio growth, successful incumbents systematically search for unmet consumer needs, and innovate based on emerging trends even when new prospects initially seem minor. Other successful incumbents adopt solutions that insurgents are trying to scale—solutions that resonate with consumers—and use their scale advantage to build distribution and brand awareness and achieve cost-effectiveness quickly.

“Our study challenges the notion that insurgent brands universally disrupt incumbents. Many incumbents have successfully maintained or grown their market share amid tight competition. The successful incumbents thrived by blending their incumbent strengths and insurgent tactics,

allowing them to counter threats and strengthen their market position effectively,” said Sydney-based David Zehner, head of Bain’s Asia Pacific consumer products practice.

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Editor's Note: For more information or interview requests please contact: Ann Lee - tel: +65 6228 2960, email: ann.lee@bain.com

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