Jakarta Post

When Brands Hit a Wall in Developing Asia

Winning in developing Asia is not easy. Yet some companies are getting ahead by overcoming five common pitfalls that keep their competitors behind.

글 Nader Elkhweet and Mike Booker

First published on 3월 23, 2018
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This article originally appeared on The Jakarta Post. With their huge and expanding consumer population and rising incomes, Asia’s developing markets may be the most promising place on Earth to sell fast-moving consumer goods (FMCG). But for too many brands, the region has become a quick place to fail. The game is changing at an ever-increasing pace, and many multinational and local brands struggle to keep up. The changes are many. As their lives become more hectic, people buy more food and beverages that they can consume on the go, changing the rules for how and where brands sell those goods. Consumers now prefer convenience stores over larger store formats, requiring brands to adapt their assortment mix and distribution strategies, among other big moves. And consumers in the region are quickly moving online. China has 1.3 billion mobile phone subscriptions, and the six largest countries in Southeast Asia now boast a total of more than 200 million digital consumers—a 50% rise from 2016 to 2017. In three years, an estimated 130 million consumers in India will purchase beauty and hygiene products online, according to a 2016 study by Bain & Company and Google. Yet, despite the vast potential, fewer than 20% of brands outgrow their categories in this high-growth region, according to our research—that’s roughly the same proportion as in low-growth developed markets. What holds them back? We have identified five common pitfalls and ways to overcome them. Read the full article at The Jakarta Post. Nader Elkhweet is a Bain & Company partner based in Jakarta. Mike Booker, a partner based in Singapore, leads Bain’s Consumer Products practice in Asia-Pacific.

This article originally appeared on The Jakarta Post.

With their huge and expanding consumer population and rising incomes, Asia’s developing markets may be the most promising place on Earth to sell fast-moving consumer goods (FMCG). But for too many brands, the region has become a quick place to fail. The game is changing at an ever-increasing pace, and many multinational and local brands struggle to keep up.

The changes are many. As their lives become more hectic, people buy more food and beverages that they can consume on the go, changing the rules for how and where brands sell those goods. Consumers now prefer convenience stores over larger store formats, requiring brands to adapt their assortment mix and distribution strategies, among other big moves. And consumers in the region are quickly moving online. China has 1.3 billion mobile phone subscriptions, and the six largest countries in Southeast Asia now boast a total of more than 200 million digital consumers—a 50% rise from 2016 to 2017. In three years, an estimated 130 million consumers in India will purchase beauty and hygiene products online, according to a 2016 study by Bain & Company and Google.

Yet, despite the vast potential, fewer than 20% of brands outgrow their categories in this high-growth region, according to our research—that’s roughly the same proportion as in low-growth developed markets.

What holds them back? We have identified five common pitfalls and ways to overcome them.

Read the full article at The Jakarta Post.

Nader Elkhweet is a Bain & Company partner based in Jakarta. Mike Booker, a partner based in Singapore, leads Bain’s Consumer Products practice in Asia-Pacific.