Seeing the growth potential, major firms are using this strategy to sell products in region
By RALPH JENNINGS 04 November 2009
For hundreds of diners in Taiwan, 22-year-old Sheena Tsai is the billboard for Carlsberg, a Danish beer vying for a slice of Asia’s competitive lager market. The university student brings beer straight to tables at packed Taipei seafood restaurants with handy facts about Carlsberg’s origin and flavour.
‘Some don’t know about it,’ said Ms Tsai, who wears a beer-branded blouse to local seafood joints. ‘They like to meet sellers face to face. This kind of promotion is useful.’
Carlsberg isn’t the only one in Asia. As major companies see growth potential in the region, many more are seeking a marketing strategy to suit it, giving new clout to the ages-old tool of bringing products directly to consumers.
Dozens of companies, from consumer goods maker Hindustan Unilever Ltd to delivery firms such as Fedex, are now using direct marketing methods to sell their products in increasingly crowded and competitive markets.
Direct marketing, broadly defined, covers any sales technique from pop-up stores and commercial gift bag giveaways to free sample handouts that puts sellers directly in touch with target customers, compared to indirect marketing such as advertising, product placement or sponsorship.
Asian consumers, long accustomed to doing business with trusted family or friends to avoid scams, see contact with direct marketers as safe avenues to get to study a product in a world of commercial uncertainty, specialists say.
‘People still reply to direct mail. They want to be marketed to,’ said Dominic Powers, Asia-Pacific senior vice-president with marketing firm Epsilon International.
‘Relationships are very strong, more so than in America, and they get things done.’
Every major firm active in Asia uses both direct and indirect marketing, with the direct portion growing.
Last year, direct sales in Asia increased 5 per cent to US$40 billion, up from a 0.4 per cent increase in 2007, largely due to expanding markets such as China and India, according to data from market research firm Euromonitor International.
Big in Asia’s direct marketing are alcoholic beverages such as Carlsberg and Glenmorangie Scotch whiskey, Coca Cola Co’s Glaceau Vitamin Water, delivery firms such as Fedex with pre-existing address databases and common household goods sold by the likes of Amway.
And there’s still room for more. Consumption and savings are expected to grow throughout Asia from a rate of 3.1 per cent in 2002 to 4.6 per cent next year, according to an HSBC Global Research report.
About 48 per cent of the US$150.3 billion spent globally on direct marketing will go to Asia by 2012, according to estimates by the Grey Group marketing communications firm.
‘Companies have to adapt to Asian situations,’ said Dibyo Haldar, a strategy analyst with marketing agency Euro RSCG Worldwide in Singapore. ‘Direct marketing as a per cent of budgets is increasing. Everyone wants to try it out.’
Direct marketing costs far less than mass advertising - and marketing officials say it gives them more bang for their buck.
The 300-member trade organisation Sri Lanka Apparel has reached 100,000 people, spending only US$150,000, by joining online communities such as student activist groups with an interest in garments made in safe, legal working conditions.
The same outreach via conventional advertising would have cost at least US$20 million.
‘We get a lot of bang out of our buck,’ said Sri Lanka Apparel global marketing chairman Kumar Mirchandani.
Amway Global, a major US-based direct marketing firm, saw 25 per cent growth in greater China in 2008 and generated 30 per cent of its worldwide business from the region.
‘An Asian speciality is that personal relations are more emphasised. In the West, they think the Internet can solve all kinds of problems,’ said Shirley Chen, general manager with Amway Taiwan.
Reaching out
Dave Poh began selling Nu Skin products in 2005 after a friend in Singapore introduced them to him following a sale to that friend by another friend. He has recruited about 80 members in his new hometown Taipei, largely by making friends with them.
Almost 70 per cent of consumers in Bangladesh and Sri Lanka bought something in a door-to-door sale last year, said Steve Yi, chief strategy officer for the Grey Group in Seoul.
And a once obscure foreign cigarette brand gained 10 per cent of South Korea’s market share in 2002 by handing out samples to bar hostesses who then passed them on to clients, who eventually began buying the brand, Mr. Yi said.
Taking advantage of the popularity of door-to-door sales in India, 10 years ago Hindustan Unilever Ltd began a direct-sales scheme in rural areas with populations of less than 2,000. About 100,000 villages are involved.
Some 45,000 women go door-to-door with Unilever hair oil, soap, shampoo and cream in baskets or cardboard cartons on bicycles. They bought Unilever inventory worth 4.5 billion rupees (S$133.4 million) in 2008, said Hemant Bakshi, an executive director.
A boom in electronic marketing is expected as Asian consumers adopt the latest technologies faster than peers elsewhere and welcome ads via mobile phone messages or online communities.
About 60 per cent of Internet users in the Asia-Pacific region have made purchases based on e-mail advertisements, compared with less than half in North America and just over 40 per cent in Europe, Epislon has found.
By 2012, the Asia-Pacific will lead other regions in mobile marketing spending at US$7.7 billion versus the global figure of US$16 billion, according to a study by ABI Research.
‘Direct plus digital is growing, while conventional advertising is definitely not, in terms of budgets and activity,’ said Mr. Haldar of Euro RSCG. -- Reuters
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Direct marketing gains new clout in Asia
Seeing the growth potential, major firms are using this strategy to sell products in region
By RALPH JENNINGS
04 November 2009
For hundreds of diners in Taiwan, 22-year-old Sheena Tsai is the billboard for Carlsberg, a Danish beer vying for a slice of Asia’s competitive lager market. The university student brings beer straight to tables at packed Taipei seafood restaurants with handy facts about Carlsberg’s origin and flavour.
‘Some don’t know about it,’ said Ms Tsai, who wears a beer-branded blouse to local seafood joints. ‘They like to meet sellers face to face. This kind of promotion is useful.’
Carlsberg isn’t the only one in Asia. As major companies see growth potential in the region, many more are seeking a marketing strategy to suit it, giving new clout to the ages-old tool of bringing products directly to consumers.
Dozens of companies, from consumer goods maker Hindustan Unilever Ltd to delivery firms such as Fedex, are now using direct marketing methods to sell their products in increasingly crowded and competitive markets.
Direct marketing, broadly defined, covers any sales technique from pop-up stores and commercial gift bag giveaways to free sample handouts that puts sellers directly in touch with target customers, compared to indirect marketing such as advertising, product placement or sponsorship.
Asian consumers, long accustomed to doing business with trusted family or friends to avoid scams, see contact with direct marketers as safe avenues to get to study a product in a world of commercial uncertainty, specialists say.
‘People still reply to direct mail. They want to be marketed to,’ said Dominic Powers, Asia-Pacific senior vice-president with marketing firm Epsilon International.
‘Relationships are very strong, more so than in America, and they get things done.’
Every major firm active in Asia uses both direct and indirect marketing, with the direct portion growing.
Room for more
Last year, direct sales in Asia increased 5 per cent to US$40 billion, up from a 0.4 per cent increase in 2007, largely due to expanding markets such as China and India, according to data from market research firm Euromonitor International.
Big in Asia’s direct marketing are alcoholic beverages such as Carlsberg and Glenmorangie Scotch whiskey, Coca Cola Co’s Glaceau Vitamin Water, delivery firms such as Fedex with pre-existing address databases and common household goods sold by the likes of Amway.
And there’s still room for more. Consumption and savings are expected to grow throughout Asia from a rate of 3.1 per cent in 2002 to 4.6 per cent next year, according to an HSBC Global Research report.
About 48 per cent of the US$150.3 billion spent globally on direct marketing will go to Asia by 2012, according to estimates by the Grey Group marketing communications firm.
‘Companies have to adapt to Asian situations,’ said Dibyo Haldar, a strategy analyst with marketing agency Euro RSCG Worldwide in Singapore. ‘Direct marketing as a per cent of budgets is increasing. Everyone wants to try it out.’
Direct marketing costs far less than mass advertising - and marketing officials say it gives them more bang for their buck.
The 300-member trade organisation Sri Lanka Apparel has reached 100,000 people, spending only US$150,000, by joining online communities such as student activist groups with an interest in garments made in safe, legal working conditions.
The same outreach via conventional advertising would have cost at least US$20 million.
‘We get a lot of bang out of our buck,’ said Sri Lanka Apparel global marketing chairman Kumar Mirchandani.
Amway Global, a major US-based direct marketing firm, saw 25 per cent growth in greater China in 2008 and generated 30 per cent of its worldwide business from the region.
‘An Asian speciality is that personal relations are more emphasised. In the West, they think the Internet can solve all kinds of problems,’ said Shirley Chen, general manager with Amway Taiwan.
Reaching out
Dave Poh began selling Nu Skin products in 2005 after a friend in Singapore introduced them to him following a sale to that friend by another friend. He has recruited about 80 members in his new hometown Taipei, largely by making friends with them.
Almost 70 per cent of consumers in Bangladesh and Sri Lanka bought something in a door-to-door sale last year, said Steve Yi, chief strategy officer for the Grey Group in Seoul.
And a once obscure foreign cigarette brand gained 10 per cent of South Korea’s market share in 2002 by handing out samples to bar hostesses who then passed them on to clients, who eventually began buying the brand, Mr. Yi said.
Taking advantage of the popularity of door-to-door sales in India, 10 years ago Hindustan Unilever Ltd began a direct-sales scheme in rural areas with populations of less than 2,000. About 100,000 villages are involved.
Electronic marketing
Some 45,000 women go door-to-door with Unilever hair oil, soap, shampoo and cream in baskets or cardboard cartons on bicycles. They bought Unilever inventory worth 4.5 billion rupees (S$133.4 million) in 2008, said Hemant Bakshi, an executive director.
A boom in electronic marketing is expected as Asian consumers adopt the latest technologies faster than peers elsewhere and welcome ads via mobile phone messages or online communities.
About 60 per cent of Internet users in the Asia-Pacific region have made purchases based on e-mail advertisements, compared with less than half in North America and just over 40 per cent in Europe, Epislon has found.
By 2012, the Asia-Pacific will lead other regions in mobile marketing spending at US$7.7 billion versus the global figure of US$16 billion, according to a study by ABI Research.
‘Direct plus digital is growing, while conventional advertising is definitely not, in terms of budgets and activity,’ said Mr. Haldar of Euro RSCG. -- Reuters
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