Western brands with the right approach can succeed in Asia, writes Mark Haviland, managing director at Rakuten Marketing Europe.
Internet shopping has dissolved borders for retailers, allowing them to expand their global footprint without having to set up high street stores. One market that European retailers have their eye on is the Asia Pacific region, due its high growth potential and the explosion of digital there.
By 2018, digital ad spend is predicted to reach £62bn ($95.5bn) in APAC, highlighting the influence of the internet on this part of the world. In addition, according to Magna Global, Asia saw the fastest year-on-year programmatic growth (73%) with a phenomenal spend of over £320m ($493m). New technology is making the market easier for foreign brands to penetrate the market and as a result, breaking into this region is a game-changing venture.
The area, encompassing four billion people, 1.5 billion internet users and one billion social media enthusiasts, presents a huge opportunity for companies looking to elevate global revenue and brand awareness. Asia is home to some of the world’s largest internet companies with multi-billion pound annual turnovers, including Rakuten in Japan and Alibaba in China, and now European brands are looking for a slice of the action.
Effective marketing is key for successful international expansion, so here are some strategic marketing tips for brands breaking into this market.
1. Tackle one market at a time
Each APAC market is culturally and technologically unique, so don’t attempt to tackle them all at once. Focus on one country to begin with, and do your research to inform your campaigns.
For example, while customers in Thailand often view UK products as luxury items and require more after-sales service, those in China may need exclusive offers to convince them to buy. As there are a lot of value seekers in the market the best campaign could be offering incentives or discounts.
Each APAC market is culturally and technologically unique, so don’t attempt to tackle them all at once.
In addition, most businesses in Japan are driven by personal relationships. The idea of premium and personalised customer service is valued highly, so go the extra mile to build long lasting customer relationships. This means using the data and information you have about your customers to create tailored campaigns and surprising them with perks from time to time to reward their loyalty.
Competitors will likely already have a great reputation, so make sure you’ve secured sufficient partnerships prior to launch that will allow you to grow business based on customer recommendations. Once you’ve gained good publicity in one market, then you can look to develop exposure in another.
Mobile usage varies across Europe and the US, so inevitably there are differences in the use of mobile across APAC markets too. For example, mobile traffic and sales in Japan are higher than other markets because the advent of 3G meant that it became commonplace for people to use their mobile phones to search and purchase products early on, in fact years before the iPhone came to market.
In addition, the idea of using mobile phones to make payments is well established in Japan through their home-grown “keitai” (feature phone) culture. The recent shift from “keitai” to smartphones means bigger and brighter screens, driving many Japanese people to use their smartphone as their sole internet device.
In countries where mobile usage is high, retailers should be investing in mobile-optimised marketing campaigns in order to offer customers the right content in the most convenient format for them.
3. Don’t rely on third party data
Third party consumer data is much harder for brands to access in Asia due to strict privacy policies. Furthermore, much of the data that is available is outdated, as consumer behaviour changes so quickly in this market.
At the same time though, programmatic buying is increasing at a rate of knots in Asia, as markets learn from processes in the UK and US. This is allowing retailers to access targeting options beyond third party cookie data.
No longer can brands rely on mass-marketing in the hope it will resonate with a percentage of their audience.
Brands need to learn to adapt, and instead of turning to cookies, rely more on contextual targeting, look-a-like modelling and real-time data. That combined with programmatic technology, and better adoption of first party data available, will replace the need for cookies.
No longer can brands rely on mass-marketing in the hope it will resonate with a percentage of their audience, instead they need to consider smarter targeting to nurture relationships. Programmatic technology allows brands to run their marketing campaigns on a solid foundation of data and ensure that they are only targeting customers with relevant content and products.
4. Choose the right partnerships
The partnerships you choose to build will be fundamental to your success in APAC, so look to create strategic online marketing partnerships that will help to build local brand presence.
Affiliate networks can introduce brands to local publishers and build relationships that will allow you to protect your brand. Local publishers act as key brand advocates, giving credibility to foreign brands amongst the right audiences, so it’s essential that you partner with the right sites.
For example, Japanese affiliate marketing is well established and used as an online sales or customer acquisition tool by big brands. Farfetch opened an affiliate programme through Rakuten Affiliate Japan, after success with their UK, US and AU networks. This exclusive partnership has allowed them to work with quality Japanese fashion bloggers and content sites to maintain their global positioning as a luxury fashion brand.
Moving into new markets is challenging when you are physically removed from your customer, so look to build strategic partnerships with companies that can advise on how the market works, and the publishers who can help you reach target audiences.
Use their understanding of subtle nuances and insider tips to bridge the geographical and cultural gap between you and your international customers. With a local approach to marketing in APAC, brands can make a success of the huge opportunity it presents.