Profile: Philips China chief marketing officer Boon Lai

The youthful-looking Boon Lai, chief marketing officer for Philips China, says he is one of the few people that actually wishes he looked older - “I get that a lot,” he says, when surprise is expressed at his age. But Lai’s boyish looks belie a decade and a half of top-level experience that began on the agency side in 1996, working in the offices of McCann Erickson in New York and Leo Burnett in Singapore,, before shifting to Reckitt Benckiser in 2001 as media and marcoms manager for Europe.

Lai’s next career step took him away from the world of marketing for a short time, first to study for an MBA at London Business School and then to take on the role of strategy manager for Castrol at BP, before finally being seduced by Philips. “I moved to BP as I wanted to leverage the skills I had learned in my MBA,” he says. “But in my heart I knew I was a marketer. And at the same time, Philips was looking to transform its organisation from being a technology-driven electronics company to more of a consumer-centric marketing company. They approached me with a very interesting role - global head of brand.”

The move to China, which came after just over 12 months within the Philips group in Amsterdam, represented a homecoming of sorts for Lai. Although Singaporean by birth, he left Asia at the age of 16 to complete his education in the US and had not worked in the region since 2001. When the invite from Philips global CMO at the time came, Lai was quick to take up the offer.

“I think it is a very exciting place to be,” he says. “Things are moving so fast. For me, it is a good opportunity to be back in Asia. One of the things  Philips was looking for was people with high potential, who spoke Chinese, and had an Asian face. Maybe they didn’t want one who looked so young, but you can’t have everything.”

For Philips, the importance of China cannot be underestimated., as Lai notes. “Emerging markets are becoming more and more important for growth,” Lai continues. “If you look at overall sales, about 33 per cent comes from emerging markets, and China in particular is accelerating growth for the organisation. It has become of huge importance for us to get China right.  And for this we need to ensure that we have the best people in place, the best marketing practices and so on.”

Lai is now in charge of a varied portfolio that is not for the faint-hearted marketer. Philips’ business globally is based on three pillars: healthcare equipment, lighting and consumer lifestyle.
In China, the brand has number-one market share across 11 of its consumer brands including shavers, coffee makers and steam irons, and is the number-two or number-three player over six other categories.  In lighting it holds the number-one position with a distribution network covering more than 300 cities, while in healthcare it is one of the top three players, leading in areas such as colour ultrasound and digital radiography.

But this scale also presents a serious marketing challenge for a brand best known for its consumer electronics. “If we look at brand surveys, televisions and shavers always come up as top-of-mind associations. Second to that is maybe light bulbs. One of the things we had to do, therefore, was to help people associate and appreciate the whole range of what Philips has to offer.”

To do this, Lai has brought to China the learnings he picked up from his time in Europe and the US. Although, surprisingly for a marketer with a solid business strategy background, the most important of these have been behavioural.

“What was interesting for me when I first went to Europe was that the way of working was a little bit different in that people spent a lot of time debating,” he says. “Asia is a very fast-paced environment and people want to get things done but I think there is also an opportunity for us to take a step back and to be clear about what objectives we have in place. That does not mean slow things down - we should still keep the good things such as speed of execution and flexibility, but at the same time I think it is important to have a clear strategic direction so that everyone is aligned.”

But Lai does not see China just as a place where he can impose his experience from the West. In fact, he already identifies areas where the rest of the world can learn from China; in particular, the fast adoption of social media as a sales and marketing tool, an area in which he believes China is already “leap-frogging ahead of Western practices”.

Philips has certainly been quick to stake its place in the Chinese online community, working with leading players across five online categories, including Tudou.com for online video and Renren.com for social networking. “We want to ensure that we are staying ahead of the game, but at the same time we are willing to experiment with different marketing opportunities and test them to see how we can interact with our consumers,” he says.

One important area of digital activity has been the establishment of a branded online store within Taobao.com, China’s leading e-commerce virtual mall. “In Europe we have our own Philips.com store but in China people will not necessarily go to the brand website to look for information. They go to Taobao, they go to Baidu, they go to different blogs. So the influence of blogs and social networking sites is so much stronger and so much more upfront in the purchase cycle. You need to have a presence there, so our digital strategy in China is to really understand where the consumer is, how they are interacting, and who they go to for advice.”

This process of localising the marketing function is especially interesting for a company such as Philips that for the most part is run on global lines - the company works with DDB and Carat as its global creative and media agency partners.

Lai stresses that although work for global products may originate out of Amsterdam, branding initiatives and campaigns for products with greater local appeal - for example, rice cookers - is undertaken locally. “Chinese consumers are more aspirational, so we have to adapt our marketing approach to that.”

This presumably also reflects the intense competition Philips faces across its three categories in
China - from both local and international brands.

“We are lucky in that the Philips brand is very strong,” says Lai. “In terms of awareness, everybody knows the brand so the issue is really how do we build consideration and preference and actually get people to purchase our products.”

The solution to creating this point of  differentiation in the market, he argues, is to go back to the Philips brand promise of sense and sensibility, which he says translates as really understanding what consumers want so that the company designs products using the right technology, creating an easier user experience. “This is embedded across the organisation,” Lai says.

Strategically, this has been achieved by allying Philips global reputation with its local scale.

“One thing we try to leverage on is the global capabilities we have in terms of our technology and our worldwide R&D centres. But it is also about the speed of action of the local sales organisation to get things done. We have 8,000 counters across all provinces in China, so once we have a winning concept we are able to push through and ramp-up distribution pretty quickly.”

This article was originally published in the March 2011 issue of Campaign Asia-Pacific.