What You Need to Know before Expanding to Asia (Part I)
Updated: Oct 16, 2020
One of the goals I had in mind when I set up the agency was to help European businesses launch into and expand across Asia. During my seven-plus years in Hong Kong, I had numerous discussions with European firms looking to do exactly that.
It’s understandable that Asia looks like an attractive destination when companies are considering new markets. The region accounts for more than 60% of the world’s population and has powered much of its economic growth in recent decades - a trend likely to continue for the rest of what has been dubbed the Asian century.
A significant proportion of those conversations failed to get beyond an initial call as businesses hadn’t done their homework or were looking for a short-cut that simply does not exist. So, to help us all save some time ahead of such calls, here are some of the key things to consider about launching a product or service from the West into Asia.
1. Asia is a geographical descriptor not a market
I’ve had calls with prospects who inform me that they’ve set aside a (usually derisory) budget for an Asia campaign. They don’t want to focus on a specific country; they want to make an impact across the region. Firstly, if you really want to make an impact across the region, the kind of budget needed will be a big seven-digit figure (see point 2). Secondly, there is no such thing as an Asia campaign and to succeed activities will need to be tailored for and relevant to specific markets (see point 3). Which involves picking a market to penetrate - something we can advise on but that needs serious operational support.
2. Asia is not cheap
Asian cities frequently top lists of the world’s most expensive p[aces to live. See here and here. Access to some of the biggest markets in the world’s most dynamic region comes at a price, which is reflected not only in the cost of commercial and private rents, but also of outstanding talent. Which means that the cost of running a campaign will be in line with, if not more expensive than, what it costs to do business in major European countries.
3. You can only get so far with English
Some prospects hope that their one-size-fits-all, English-only app or service will be enough to achieve market dominance in Asia. It will not. Certainly, a significant percentage of people in the region are proficient in English, especially in the professions. And a native English speaker will have a comfortable existence in places like Hong Kong, Bangkok or Hanoi. But when Hongkongers, Thais or Vietnamese share their views, experiences and ideas, it will rarely be in English.
And in the bigger economies - China, Japan and Korea - getting traction as a business will only happen in the local language. Taco Bell provided an instructive lesson in what can happen when you try to take short-cuts with localisation.
4. You need to be on top of cultural nuance
In 2016, Morrissey, a British indie rock icon, played a show in Hong Kong. As he said his thank yous in Mandarin, he instantly provoked resentment (if not even stronger reactions) from a large section of the formerly supportive crowd. In a similar vein, the use of Simplified Chinese will raise eyebrows in Taiwan.
Language and script in Hong Kong and Taiwan as well as mainland China are laden with heavy significance for perceptions of identity and belonging. The same is true of many other markets across the region. A brand that makes missteps with these sorts of issues will possibly never recover from them. And a decision in one market can involve trade-offs against activity in another. Make sure you seek advice before you start on any localisation or translation work.
5. Government policy is a much bigger driver of relevance than in the West and
6. Be ready to challenge your assumptions
Initially, I had these two as separate recommendations but then I realised there was one anecdote that shed a useful light on both points.
One of the things that surprised me when I started working up campaigns in Asia - and, in particular, for b2b technology clients - was just how big an influence government policy can be. Sure, you expect this in some of the countries but industrial policy shapes business in every Asian market in a way you rarely see in Europe.
The European representatives of one client had dismissed the term Industry 4.0 as a meaningless buzzword and vacuous marketing hype. The term had been interpreted very differently however by governments across Asia, who had made it a cornerstone of industrial policy in China, Taiwan, Korea, Malaysia and Vietnam among others. Had we avoided using the term, which at first was the request, we’d have failed to tap into all of the debates happening about how businesses could capitalise on government enthusiasm, largesse and incentives to shape Industry 4.0 initiatives.
For the sake of keeping this post relatively concise and digestible, I’m going to pause on this topic for the moment, and will return to it in a second post,