There’s a lot of buzz surrounding the new SEA kids on the block, the 'pre-emerging' or 'new frontier' markets. Brands are taking their early steps into the markets, agencies are receiving the first briefs, some are opening up offices and these locations are fast becoming the new stamps on the passport for the seasoned Asian traveller.
For the purposes of clarity, in Asia, these refer to Bangladesh, Cambodia, Laos, Myanmar and Sri Lanka. Economists look at them as 'investable' countries of the developing world, and investors seeking high, long-run return potential typically pursue them. When Flamingo talks about 'frontiers', we also include the rural geographies of developing countries such as Indonesia, Philippines and Vietnam, for the same reason: currently undeveloped infrastructures, but with the opportunity for long-term growth.
These markets are growing fast. Four of the five are urbanising at a faster rate than the average for emerging and developing Asia, and the age profile is also much younger, which also means that birth rates are high. To put that into perspective, there were more babies born in Laos last year than in the Netherlands, a country two and a half times the size. Although many of the consumers in these countries have limited purchasing power, growth is strong, and rapid urbanisation, poverty reduction, economic growth and the establishment of modern retailing formats are supporting sales of a wide range of consumer goods, where previously there were none.
For brands the lure is strong. This is fresh, virgin territory. There’s a chance for brand owners to secure a first-mover-advantage and to pick the low-hanging fruit that they hope will be waiting. This is all, of course, very real. But “low-hanging fruit” it is not. This is where the moniker of 'frontiers' is most apt and where brand owners need to think like explorers, training hard and putting in the groundwork before embarking on the big adventure, and like economists, preparing for the long game.
These markets aren’t a homogenous group and they aren’t simply less-developed versions of markets like Thailand or Indonesia. The latter assumes that the trajectory of growth and development will be consistent or predictable, which isn’t always the case. These markets are all culturally nuanced in their own way, and life is built around a very specific set of beliefs and influences that makes each unique. It’s the companies that enter with this in mind and spend their energies grappling with the nuances that are most able to properly embed themselves into the culture. They are able to capitalise on market opportunities as producers of goods or services, as brand owners and even as local employers.
Our approach is to build up a picture of the market in layers and so to look wide, rather than deep, when we think about employing different sources of insight. We look across the spaces of: culture, people, brand and business, in order to ensure we scope the opportunities holistically.
Culture: Building a ‘cultural roadmap’ is an important start-point and helps to establish a context for everything else you learn and do. Looking back at how the country has developed—economically, politically, socially—and understanding the foundational values and belief systems, starts to paint a picture of the future trajectory of change. Although consumer insight is nearly always the cornerstone, in countries like Cambodia and Myanmar, where change is rapid in every aspect of life, the consumer insights might expire sooner than we think. And it’s these bigger cultural forces that are the best determinants of the next five, 10, 20 years.
People: Generating actionable consumer insight can be a challenge in these kinds of market environments. It’s always fascinating and you’ll always learn, but to genuinely get under the skin of consumer motivations is a tough ask.
As we know, the marketplace is underdeveloped, many products or categories are immature or non-existent and, of course, the concept of ‘brands’ is a nascent one. Added to that, deeply collectivist social structures mean that it’s the wider ecosystem and not just the individual that needs to be understood. Again, context is all. Insight has to come from the individual in the context of the wider social ecosystem. We need to think about the motivations of the group and the role played by different types of influences and influencers, including ‘authority figures’, that could come in the shape of family or village elders, religious leaders or professionals present in the community. Understanding here has to be granular.
We’ve witnessed family doctors in Myanmar extolling the benefits of Ovaltine as a replacement for breast milk and a medicine for the sick and the dying, and Monks with the power to make or break products based on tales of superstition or conjecture. In many instances, an individual would absolutely never question an authority figure.
Understanding motivations and decision-making is a fascinating, complex network of interrelationships and influence, and this needs to be properly unpacked in order to guide positioning, messaging and even targeting strategies for a brand.
The dreaded ‘research effect’ is even more of a factor in some of these markets, and it’s important as researchers that we approach methodologies with this in mind. This can mean employing observational techniques such as ethnography, even self-ethnography, tasking respondents with interviewing peers, or capturing behaviours on our behalf with the use of wearable technology, for example. When it comes to engaging people directly, we have to minimise our own effect as ‘authority figures’ as much as we can.
If this isn’t managed it can (at best) dilute the potency of response and (at worst) completely skew findings. So building up a rapport and peer-to-peer relationship with respondents beforehand, using peer-to-peer recruitment, informal locations for discussions, being sensitive to the makeup of the group—all help to ameliorate the barriers. Beyond that it comes down to interpretation of the findings and having the cultural knowledge necessary to strip out any such effects.
Brand and Business: This is the area that can be most unsettling for brand owners. Maybe there are no category norms. Your category may not even exist. Or local practices rather than consumer products are currently fulfilling it. It could be that your globally agreed brand essence has no traction, which means starting from scratch and thinking about the brand bottom-up.
Organisations that thrive in this kind of environment think like startups. They’re open to spotting opportunities in new categories, to rethinking the purpose and positioning of their brand. And most importantly, their eyes are always open. They don’t just think about where consumers are today. They’re also planning for growing aspiration. They’re thinking about the longer-term development of their brand and business, but they’re just as open to spotting the more pragmatic quick wins that show themselves along the way. The former is critical in establishing a sustainable position, to embed the brand and business in the long term. The latter can also be a powerful way to grow penetration. It could be a new payment method, a distribution opportunity, a streamlining of the supply chain, or a tactical change to format or packaging.
The organisations that win on all of these counts tend to have an internal culture of learning, a constant finger on the pulse of change. They have ways of bringing insight alive to inspire and excite internal stakeholders, and they have processes that help to turn insight into implication and opportunity, with an imperative to trial and learn, rather than polishing and perfecting.
'New frontiers' offer brand owners a unique set of opportunities for those who are willing to put the time, effort and energies in and are in it for the long game—thinking like intrepid explorers, as well as market-savvy economists.
Emma Gage is MD of Flamingo Singapore
Flamingo recently published Ovaltine & Elephants: A Cultural Survey of Myanmar, a collection of essays, interviews and infographics by journalists, academics and researchers. The book outlines the cultural tensions that have plagued Myanmar for centuries, giving rise to unlikely phenomena such as military rulers with stables of white elephants. It also looks at how a more open market and digital connectivity are creating new challenges and opportunities in a country where legacy brand Ovaltine still enjoys the status of 'elixir of life' established when Myanmar was largely closed to the outside world. The book is available for purchase from Flamingo offices, the Flamingo group site and Books Actually in Singapore.