FEATURES: EMPOWERED BUYERS - Asia's once docile consumers are revelling in their new-found empowerment, keeping companies on their toes

Asia is experiencing the first throes of consumer activism, and

consumers are coming to grips with their power at a time when regional

economies are heading towards greater liberalisation and

competition.

While consumers in the West are agitating over genetically-modified

crops and the growing threat of globalised capitalism, the key worries

afflicting Asian consumers appear to be over pricing and quality.

Indeed, this is borne out in consumer protests organised in the last few

months, which also indicate that consumer empowerment is taking hold

across the region, but at a varying pace:

- SK Oil was forced to drop its price increase in Korea after consumer

groups ran a campaign urging people to boycott the company.

- Last month, a South Korean civic group called for a boycott of

Japanese products following the revision of a Japanese school history

textbook, which it claimed justified Japan's occupation of Korea in the

early part of the last century.

- Globe, the mobile phone service provider in the Philippines, faced

strong public clamour when it could not provide service to customers

after Nokia installed an upgrade. Globe was then forced to appease

customers with free phone services for a while.

A survey by ICOM agencies in Asia-Pacific conducted exclusively for

media found consumer empowerment growing in most countries the network

operates in, with Hong Kong being something of an exception. Jeffrey

Schultz, managing director of PR firm Golin Harris in Singapore, says:

"There's been some progress, but it has been very slow and Asia is still

about 10 to 15 years behind the US and Europe. It also varies throughout

the region."

John Cohen, principal of ICOM-affiliated agency PMP Advertising, notes

that Hong Kong consumers are actively protesting, but rarely do the

campaigns succeed. "I cannot think of any consumer initiatives that have

succeeded," he says, pointing to banking giant HSBC pushing ahead with

plans to charge for services that were previously free. About 50,000

depositors switched their business to other banks, but as Cohen fully

expects, the bank will shake off the loss and its action is likely to

encourage others to follow suit. The same old explanation about Hong

Kong being apathetic is offered as the excuse although this is unlikely

to hold water much longer. In recent months, Hong Kong residents have

come out in force clamouring for political change and protesting

depressed property prices and a range of other issues. Still, the image

of an apathetic Hong Kong remains entrenched overseas.

Tham Khai Meng, regional creative director for Ogilvy & Mather, notes:

"There's lots of wealth there and information on the environment, for

example, but they don't seem to be too worried about what goes into Hong

Kong harbour or whether the products they purchase have been tested on

animals."

In contrast, consumer activism has grown stronger in recent years,

fuelled in a large part by the near collapse of the country's economy

and the retrenchment of thousands of workers. The protests against SK

Oil and Japanese products are among a handful of actions waged by its

consumers.

Last year, when Pulmouone wanted to differentiate its dofu from others

by claiming that it is made only of domestic beans, a consumer group

proved its claim false following thorough testing. H S Lim, president of

ICOM-affiliate Smart Group, said this became a serious issue because of

concerns about a lack of truthfulness. Lim noted that consumer

empowerment has been growing rapidly under the current government of

pro-democracy advocate Kim Dae-Jung, a radical change from the military

regimes that governed the country in the 70s and 80s.

Japan's consumers, once a docile group, have been equally tenacious in

wielding their new-found power, prodded on by 10 years of economic

stagnation and some of the highest prices in the world. Shoichi Hoshi,

international advisor at Nihon Keizai, however noted that there are

fewer protests these days as prices have been falling. But it's arguable

whether the consumer protests or a tottering economy depressed

prices.

Singaporean consumers are perhaps showing the strongest inclination to

exercise the power of their dollars. But their concerns are decidedly

prosaic. Andrew Pirie, managing director of PR firm Weber Shandwick,

notes: "Consumers are becoming more demanding, not about political or

social issues, but more about product prices and reliability. Weber

Shandwick had included Singapore as the only Asian country in its recent

international survey, which evaluated consumer concerns. Adds Shultz of

Golin Harris: "Singapore is a little bit more laidback so there's a bit

more room for consumer empowerment."

And Singaporeans have been taking the opportunity to voice their

concerns about unfair trade practices with unusual gusto, sending a

chilling warning to companies that ignore them. Ericsson is a case in

point. Originally, the Consumer Association of Singapore (CASE) had been

pursuing an individual complaint against the telecoms equipment

provider. But when CASE spoke to the company, it realised that the

problem was more widespread because it was caused by a component defect

from one of the manufacturing arms.

To its credit, Ericsson responded quickly to CASE's complaints and

agreed to replace the faulty handsets for free.

Anthony Kang, chief executive at AdGrand, an ICOM agency, believes

consumer empowerment is more apparent in Singapore because CASE is very

active.

If that's not enough, the government is looking to give CASE more teeth,

which may see it acting like a fair trading office, according to senior

minister for trade and industry, Peter Chen. He suggested that the

ministry jointly lead a task force to strengthen consumer protection

laws and look at ways to empower CASE to carry out its duties more

effectively.

A proposal before the ministry argues that fair trading legislation will

help reputable businesses by getting rid of "cowboys" tarnishing their

industries. "If you look at the industries that have bad companies

involved, they're big industries. Time share is a big industry and the

concept itself is not bad, but there are so many companies in that

industry and some are not doing things properly. We need fair trading

legislation to clean up industries like this," says an observer.

If CASE succeeds in transforming itself into a fair trading office, it

will be a rare breed in the region. As one observer points out, the

closest Asia has to fair trading legislation is in Hong Kong and Japan.

"There is definitely a need for it because we have so many problems with

things like high pressure sales tactics and bait and switch."

The media in Singapore remains a powerful force in shaping consumer

activism in the city. When the local broadsheet, the Straits Times, ran

stories on higher bank fees and petrol prices, its Forum section was

flooded with letters of complaint. Says Schultz of Golin Harris: "That

newspaper plays a major role in shaping public opinion because it

decides which issues are important. Singapore companies are scared of

the letters pages."

Basskaran Nair, head of PR firm Basskaran & Partners International, says

corporations studiously monitor the Forum section to see if they are

mentioned.

Businesses take notice of the Forum page because they know if "they

don't respond to concerns raised in the letters pages then the story

will make headlines in the news pages", says Stephen Loke, chairman of

the consumer affairs committee at CASE.

With the furore over petrol prices, one oil company was so concerned

about letters appearing in the Forum pages that it reportedly organised

a private briefing for journalists. The oil retailers also discounted

oil prices at select outlets and employed PR companies to generate news

stories in the papers about "sale days".

Local banks in Singapore have also been using public relations agencies

extensively, but according to Shultz at Golin Harris, the banks are

"purely reactive".

"They're not anticipating the consumer backlashes. The increase in fees

- which was justifiable - wasn't properly explained at the beginning so

people got upset. Eventually, they communicated why they were increasing

fees but the damage was pretty much done."

Loke at CASE says some banks are "recalcitrant" but they are slowly

"realising without consumer support they are nothing". Some banks have

also been hit hard by growing shareholder activism. Since 1997, at least

15 major shareholder associations have started up across Asia.

Singapore's United Overseas Bank (UOB), for example, has been fined

Sdollars 222,000 (USdollars 122,000) by the Singapore Stock Exchange

after a shareholder group claimed the bank had artificially pushed up

the subscription price for shares in eWorldofSports.com.

Basskaran at BPI says companies have responded to shareholder activism

by being more open to minority shareholders. He says companies are

providing more comprehensive press releases and using the web to

disclose more information.

But consumer groups still face an uphill battle if the companies being

targeted are government-linked.

"The problem is if you start criticising government linked companies

then it's not a great leap of logic to say 'hey you're criticising the

government," explains Shultz at Golin Harris. He says in many countries

"corporate authority is authority and Asian people are generally less

likely to question authority".

Meanwhile, as consumers protest over high prices and product quality,

there seems to be relatively little concern for environmental issues in

Asia. "Price plays a big role," says one observer. Pirie at Weber

Shandwick agrees. "For example, McDonald's kept using polystyrene

packaging here long after Western markets changed over to recyclable

paper.

"And when they did change over it wasn't in response to consumer

pressure."

Christopher Lee at Asian Geographic says that when there are

cause-related marketing campaigns in the region it tends to be by

multinationals rather than local companies. "We've tried to get

advertisers to take a stance on the environment, but Asian companies are

very reluctant to do this. Sometimes a multinational company will want

to do something but then there is resistance from managers in the local

offices."

Overall, consumer activism is growing but it is coming off a low

base.

Asian consumers are enjoying more power than before partly because they

are wealthier and have access to greater information thanks to the

web.

"This means they can compare prices across countries, find out what

companies are doing in different countries and mobilise support for

certain causes," explains Tham at O&M.

The downside is that Asian consumers are less political than people in

the West and there is very little in the way of consumer protection laws

in this region.

This may explain why there isn't a culture of consumer activism, says

Lee at Asian Geographic. "The whole economic imperative in many

countries is to help businesses and as a consequence consumers come

last."