The region’s smaller markets saw their fair share of economic difficulties this year, but many saw continued rises in adspend as MNCs looked for the next growth market.
Vietnam continued to be a notable market despite the slowdown in GDP growth. The fall in GDP was mainly due to the slowdown in exports, particularly to Western markets. Exports contribute 70 per cent to GDP in Vietnam and this year they saw a 12 per cent decline. Adspend in the country, however, shot up beyond expectation.
Vietnam continued to be a notable market despite the slowdown in GDP growth. The fall in GDP was mainly due to the slowdown in exports, particularly to Western markets. Exports contribute 70 per cent to GDP in Vietnam and this year they saw a 12 per cent decline. Adspend in the country, however, shot up beyond expectation.
According to Girsh Menon, MD of Mindshare in the market, domestic consumption, particularly of “daily use products”, has been as strong as ever. As a result adspend in 2009 grew by 26 per cent year on year. “This rate of growth is higher than that experienced in 2007 and 2008,” he says.
Companies that significantly increased spend include MNCs Unilever, FrieslandCampina and PepsiCo, plus local players THP Group and Masan. The sectors that saw increased investment in the country include banking and real estate. Hong Leong Bank has recently opened operations, while HSBC, ANZ and Standard Chartered have upped their investments in the country.
According to Vikas Mehta, CEO of Lowe Worldwide, one positive result of the economic pressures earlier this year has been the “weeding out of the numerous not-so-robust players” across industries and a “bit of consolidation”.
“From a market maturity point of view in the long term, I see it as a good sign. At the same time, there are a few watch-outs that could create roadblocks like inflation. But the basic factors that have made Vietnam a success story this decade remain solid.”
The biggest challenges for brands in Vietnam include excessive TV inflation in the range of 25 to 30 per cent and a shortage of experienced marketing talent.
Pakistan was tipped for big things this year, but was hit hard by economic and political woes. The Government expects growth of 3.3 per cent this fiscal year, to the end of June 2010. According to Khalid Naseem, vice-president of operations and planning at Ogilvy Pakistan, the global recession’s biggest impact has been a decline in private-sector investment, foreign investment and exports.
Yet the economic climate did not stop brands from entering the market. Hardee’s, Hyper Star (Carrefour), QMobile, Garnier, Calvin Klein and L’Oréal are among the brands that ventured into Pakistan in 2009. Sarwar Khan, MD of Maxus Pakistan, says that brands were attracted by Pakistan’s huge population of 170 million. Foreign brands, he says, have low penetration but are accepted. Khan adds that TV spend has grown by 24 per cent over last year and “eight out of the top 10 spenders are MNCs doubling, tripling and even quadrupling spending.”
The challenges for brands from his perspective have been “volatility in terms of security, the public and media repercussions, and religious considerations.”
Neigbouring Bangladesh has had a relatively smoother time. According to Syed Gousul Alam, vice-president and country head of Grey Group Bangladesh, economic growth is stable at six per cent. The garment sector, which is key to the country’s economy, was not as adversely affected as in some other countries. Brands that have entered the country include KFC, Pizza Inn, Nando’s and Barista.
Bangladesh could be one to watch for next year. Alam says that foreign multinationals including his client Procter & Gamble have started to look differently at Bangladesh with the return of democratic government this year. “It has been good for Bangladesh,” he says. “Going forward we expect strong growth.”
Got a view?
Email feedback@media.asia
This article was originally published in 17 December 2009 issue of Media.
