This is Asia’s moment. Already home to more than half of the world’s population, over the next decade or so, Asia will account for more than 50% of global GDP, and nearly 40% of global consumption.
What’s important to note right away, is that this is bigger than China. Japan led the first phase of postwar Asian growth, the tiger economies [South Korea, Taiwan, Hong Kong, Singapore] came next. The 2000s saw the rise of China, and now we have South and Southeast Asia. By 2023, Indonesia will overtake Russia, UK, France and Mexico to become the world’s sixth largest economy. Philippines too, is on a similar trajectory. We’re looking at three challenges… and three opportunities for brands in the Asian century. Let’s dive right in.
The Asian Century is Here: Who’s Up to the Challenge?
1. Walking the Tightrope: From Patchy First-Party Data to Genuine Personalisation
If ever there was a time to make the most of digital data, it is now. The global pandemic and lockdown have highlighted the significance of digital across the value chain, and in Asia Pacific as elsewhere, brands with digital-first capabilities were the ones to come out on top. Building a digitally agile brand however relies in large part on the quality of data brands collect, and activate. Nearly 9 in 10 APAC brands consider first-party data as being very useful — or critical — to driving more engaging marketing. However, when it comes to collecting and utilising this data, brands are less than confident of their abilities.
In a recent study, 56% of brands in Asia Pacific believed they were only ‘average’ at leveraging their first-party data.
First-party data is what brands collect directly with customer permission (think web and app data, transaction history from CRM databases, e-commerce sales, loyalty program activity, etc.) A common challenge we come across is for brands to collect user data over five to six years, but not have the resources or capabilities to analyse it.
Enable technology to bridge the gap in trust
To succeed with data, brands must begin not with consumers, but internally — with robust tech infrastructure to ensure data is collected systematically. Plus cross-team collaboration between insights, marketing, legal, and product teams so the data doesn’t sit forgotten, but is made accessible in real-time for targeted marketing. This doesn’t have to be difficult. Brands are exploring both simple and innovative ways to collect data and unlock consumer value. See our study on Volvo’s #Selfies for Safety campaign for an unusual approach to data collection.
At each step, digitally mature brands think strategically about what business objectives they want to achieve, and what these objectives require in terms of data and analytics. They set different priorities for each set of consumers. A mandate from the leadership does matter — brands where CEOs supported data and analytics efforts showed 1.5x higher digital maturity than brands that didn’t.
Nike: A hyper focus on customer data and personalisation to generate user value
Transparency + Value: Designing the User Experience
Why should consumers part with private information? The best brands establish trust and make it easy for consumers to give and withdraw consent. They are upfront about the reasons for collecting data, and the benefits of collection and usage. They also highlight the incentives, such as better consumer experience, that come from sharing data.
Playing to Win: What are the payoffs?
Brands leveraging first-party data have a far more accurate sense of their customers’ lifetime value. They can market with personalised content. They offer more relevant products and experiences. They can map customer habits and purchasing decisions. Take the case of Nike. In 2018, Nike acquired leading data analytics company Zodiac to crunch user data collected via the Nike app and connected devices like Fitbit.
Now if I buy a pair of shoes every nine months, and it’s been a year since my last purchase, Nike will reach out to me and prompt me to resume my purchase cycle. Nike grew its digital sales by 36% in the third quarter ending February just by leveraging Taobao livestream bloggers and social data. Going on offense during the peak lockdown months helped Nike engage customers via alternative channels and minimise churn in an otherwise high-stress quarter for most retail business. The payoffs are huge.
Responsible use of first-party data has the potential to unlock an estimated $200 billion value for brands in terms of incremental revenue or cost efficiencies in the Asia Pacific markets. What are we waiting for?
In part 2, we look at Hyper Competition/Hyper Localisation and Infrastructure Gaps/High-Low Innovation — two more challenges and opportunities for brands in the Asian Century.