Best Practices in Market Intelligence for Asia Pacific

Best Practices in Market
Intelligence for Asia-Pacific
Webinar presentation
November 18, 2010

The White Paper will be available soon on request from
singapore@globalintelligence.com after the webinar.

www.globalintelligence.com

Presenters

•  Ms. Stephanie Tan, Global Intelligence Alliance
!  Marketing Manager, Asia-Pacific
!  Webinar conferencier

•  Mr. Pete Read, Global Intelligence Alliance
!  SVP, Asia-Pacific
!  Webinar presenter


GIA is a strategic market intelligence
and advisory group
Global Intelligence Alliance (GIA) was formed in
1995 when a team of market intelligence
specialists, management consultants, industry
analysts and technology experts came together
to build a powerful suite of customized
solutions ranging from outsourced market
monitoring services and software, to strategic
analysis and advisory.

Today, we are the preferred partner for
organizations seeking to understand, compete
and grow in international markets. Our industry
expertise and coverage of over 100 countries
enables our customers to make better informed
decisions worldwide.

www.globalintelligence.com - page 3

Access local knowledge in over 100
countries

GIA Group has 13 offices on 4
continents. Together with affiliated
GIA Member companies, certified
GIA Research Partners and
consultants, GIA provides access
to local knowledge in over 100
countries.

All GIA Network companies adhere
to GIA’s Research and Analysis
Quality System as well as the SCIP
Code of Ethics.


Webinar content outline

•  An overview of the Asia-Pacific region
•  Challenges of Market Intelligence in Asia-Pacific
•  Some ideas on addressing the challenges
•  Market intelligence case studies


An overview of the Asia-Pacific region


Asia-Pacific fast facts

•  Asia-Pacific supports 60% of the world’s population with China and India are the 1st
and 2nd populous countries in the world.
•  China and Japan are the 2nd and 3rd largest economies in the world.
•  India and China are the motors driving the growth of Asia-Pacific in 2009/10
•  Asia-Pacific’s development has been largely uneven, both across the region and
within countries
•  Asia-Pacific is diverse in terms of economies, culture, climate, governments,
regulations and level of wealth


Asia-Pacific overview
GIA divides Asia-Pacific into four sub-regions
The 4 zones
East Asia China (includes Macau SAR and Hong Kong
SAR), Japan, South Korea and Taiwan
South Asia Bangladesh, Bhutan, India, The Maldives,
Nepal, Pakistan and Sri Lanka
Southeast Asia Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, Philippines, Singapore,
East Asia Thailand and Vietnam
Australasia and Australia and New Zealand together with
Oceania smaller countries such as Papua New Guinea
Southeast
Asia
South Asia- Pacific fact file
Asia
Population 60%of the world’s population
Languages Around 3,000 languages

Association ASEAN, the APEC, ASEAN plus three,
OECD
Major currency units No unified currency in Asia-Pacific
China: Renminbi (RMB)
Japan: Yen (JPY)
Australasia and Oceania India: Rupees (INR)
S. Korea: won (KRW)
Australia :Australian dollar (AUD)


East Asia
East Asia covers 28% of the Asian continent with more than 1.5 billion people. It
contains both developed and developing countries with a large discrepancy in GDP per
capita. Political alliance between China, Japan and South Korea is relatively weak.

GDP GDP Growth Population GDP/Capita (US Import Export
Country/ Regions (US$ bn) (%) (‘000) $) (US $bn) (US $bn)
China 4,984 9.1 1,330,141 6,600 954,300 1,204,000
Japan 5,068 -5.3 127,470 32,700 499,700 542,300
South Korea 832.5 0.2 48,636 28,100 317,500 373,600
Hong Kong SAR 210.6 -2.8 7,089.7 42,800 348,700 321,800
Taiwan 378.5 -1.9 23,025 32,000 172,700 203,400

Japan is the 3rd largest economy in the world China is one of the largest and fastest growing countries in
•  77% GDP came from service sector in 2009 the world. It is still (arguably) a developing country, and the
government has great influence on the economy.
•  Strong in technology of motor vehicles, electronic
equipment and chemicals •  Largest labour force in the world - around 814 million
•  Government debt is estimated to have reached 192% •  2nd largest exporter with textile, electricals/electronics
of GDP in 2009 and machinery as the major exports
•  5th largest consumer market in 2010
South Korea’s economy is export-driven; a developed •  Recently, government has increasingly emphasized
country that maintained growth during the financial crisis domestic consumption, which mainly drove GDP growth
•  9th largest exporter in the world in 2009 in 2009
•  Electronics, telecommunication, automobile and
shipbuilding are main industries
•  Overdependence on conglomerates (chaebol) and an
inflexible labour market

Southeast Asia (South/West)
Economically, Southeast Asia countries are very diverse, though there is some shared history and
culture. Several countries have been plagued by political bottlenecks or exclusive collaboration
between government and government/politician linked business, resulting in considerable
restrictions on domestic growth, wealth development and inward investment.

Country (US$ bn) (%) (‘000) $) (US $bn) (US $bn)
Malaysia 193 -1.7 28,274 14,900 119,300 157,600
Singapore 182.2 -1.3 4,701 52,200 240,500 274,500
Indonesia 539.4 4.5 242,968 4,000 84,320 119,500
Brunei 10.4 -0.5 395 51,200 2,610 10,670
Cambodia 10.9 -1.5 14,454 1,900 5,440 3,647

Singapore is largely an open-market economy and is Malaysia is well-endowed with natural resources in areas
also said to be one of the most business-friendly such as agriculture, forestry and minerals.
economies in the world.
•  It is one of the top exporters of natural rubber and palm
•  The world's fourth largest foreign exchange trading oil in the world.
center. •  Tin and petroleum are the two main mineral resources
•  Relies on (re-)exports, particularly in consumer that are of major significance in the Malaysian economy.
electronics, information technology products and •  State-owned oil producer Petronas supplies 40% of
pharmaceuticals. government revenue.
•  Main international gateways to Southeast Asia
•  English is its first language and technology is
advanced, which favours foreign investment

Southeast Asia (North/East)
Apart from Singapore, most of the Southeast Asia countries’ economies rely on rich natural
resources and cheap labour force

Vietnam 93.2 5.3 89,571 2,900 65,080 56,980
Thailand 263.9 -2.2 67,089 8,200 119,000 154,200
Philippines 161.2 0.9 99,900 3,300 46,390 37,510
Laos 5.6 6.5 6,368 2,100 2,034 1,104

Vietnam’s economic growth is one of the fastest in Thailand’s economy has been plagued in recent years
Southeast Asia and the country has recently by a prolonged political crisis despite a relatively well-
received a positive assessment from investors and developed infrastructure, pro-investment policies and a
economists alike. free-enterprise economy.
•  Industrial sector is the largest contributor to the
economy, accounted for 45% of GDP •  Tourism is the key industry in Thailand
•  Key industries include food processing, garments, •  Thailand has being ASEAN’s largest automotive
shoes, machine manufacturing, mining, cement, market and assembler.
chemical fertilizer, glass, tires, oil, coal and steel •  A favourite with Japanese conglomerates investing
in Southeast Asia


South Asia
The economy in South Asia is mainly driven by agriculture. GDP per capita is relatively
less diverse than other parts of Asia-Pacific, and it is one of the poorest regions on
Earth, with the lowest GDP per capita in region. With the rise of India as a global
power, South Asia is gaining the world’s attention and most countries have showed
positive growth since the global financial crisis.

India 1,236 7.4 1,173,108 3,100 268,400 164,300
Bangladesh 94.6 5.6 151,118.5 1,500 20,220 15,910
Bhutan 1.2 5.7 699.8 4,700 533 513
The Maldives 1.3 -3 395.7 4,300 782 88
Nepal 12.9 4.7 28,952 1,200 3,626 907
Pakistan 162 4.2 184,405 2,500 28,470 18,440
Sri Lanka 42.2 3.5 21,514 4,500 9,700 6,983

India serves as one of the motors driving Asia-Pacific recovery from global recession, with average 7% growth per year
since 1997.
•  2nd largest labour force with 467 million people, many English speaking
•  Well-known as the outsourcing center for Information technology and business process (BPO)
•  Strong in technology of motor vehicles, electronic equipment and chemicals
•  The growth of GDP is mainly driven by domestic demand, especially consumer durables and cars/2-wheelers
•  Power shortages, inadequate quality of roads and capacity shortages in the ports sector are restricting growth


Australasia and Oceania
Australia and New Zealand are two developed countries with relatively high GDP per
capita compared to many countries in the region. Australia is rich in natural resources
such as coal, iron ore, copper, natural gas and renewable energy resources, which
attract high levels of foreign investment. Agricultural products such as meat, dairy
and fruit are a key export.

Australia 994.2 1.3 1,173,108 40,000 163,900 160,500
New Zealand 117.8 -1.6 4,252.3 27,400 23,450 24,990

Australia has successfully transformed itself into an New Zealand has a small population but is one of the
internationally competitive and advanced market economy most developed countries in Asia-Pacific region.
in recent decades, with 17 consecutive years of growth
prior to the global financial crisis. •  Urbanization is over 85%
•  Service sector contributed 72% of GDP in 2009
•  Service sector contributed nearly 70% to its GDP in •  The economy fell into recession before the global
2009 financial crisis, the central bank cut interest rate
•  Recently, Australia concentrated on expanding the aggressively and the government developed fiscal
resources industry, for example, the US$40 billion stimulus measures to pull out of the recession in late
Gorgon Liquid Natural Gas project 2009
•  In terms of infrastructure, it owns 37,855 km railways
which is the 7th largest in the world.


Challenges of Conducting
Market Intelligence


Intelligence challenges in APAC: Fundamentals

Each of the countries within the region is unique with differing economic characteristics
dictated by factors such as culture and language, government, history, geographical location and
(lack of) natural resources.

Socioeconomic levels, purchase power parity, unemployment rates, and other population
measuring tools are inconsistent with those used in the West and must be adapted to local
conditions and climates.

Unreported black / grey market factors must be estimated when calculating market size. The
impact of contraband products, copies and clones must be taken into consideration within short-,
medium-, and long-term sales objectives.

Reported growth rates (usually in US$) must take into consideration foreign exchange
fluctuations and possible devaluations

Reaching precision in market strategy and positioning can be frustrating, as target markets
frequently shift rapidly in size and structure as a result of the economic dynamics mentioned
above.


Intelligence challenges in APAC:
Cultural factors (1/2)

•  Official information
Information quality varies from country to country and source to source. In many countries government data are
unreliable and/or outdated.

•  Press
With the exception of a handful of worldclass players, the press is very often equipped with limited research and
investigative capabilities, and there is a lack of industry specific publications.

•  Associations
Most do not generate market intelligence. There are few exceptions in specific industries within certain countries (eg.
automotive in Indonesia, AV in Japan).

•  Off-the-shelf studies
Mostly available only on a macro economic or political scale; industry studies tend to be shallow and/or inaccurate.

•  Websites
Plenty of information in some countries and industries but difficult to differentiate credible from non-credible sources. In
addition, definitions vary across the information landscape, resulting in challenges making like-for-like comparisons.


Intelligence challenges in APAC:
Cultural factors (2/2)

•  Social Disparity / Eliteness
Accessing business decision makers and high level consumers is difficult; they often isolate themselves.

•  Skepticism
Consumer research is sometimes inhibited by lack of awareness or fear of commercial (or criminal) motives.

•  Legal System
A relatively undeveloped and inconsistent (across APAC countries) legal system fosters mistrust of competitors and
competitive intelligence.

•  Centralized Management
Changing rapidly in some companies and countries, but centralization of management handicaps the information flow
amongst middle management, meaning challenges for B2B information gathering.

•  Corruption
Valuable information is closely guarded by public and private sectors and may only be available in return for “special
incentives”, which does not sit well with multinational companies and consultancies.


Intelligence challenges in APAC
Time Factors

•  The absence of secondary data requires
increased time (and money) investment in primary Cost Factors
research
•  Need for primary research to gain full
•  Telephone interviews have limited success with understanding
some Asian cultures so interviews must often be
conducted in person
•  Telephone costs are higher than in the US or
Europe
•  Decision makers can be difficult to access
•  Skilled consultants are as expensive as their US
•  Travel to and from interviews can take 1-2 hours or Europe counterparts
each way in many countries
•  Real estate prices are highly inflated in many
•  Survey techniqes may require large samples due capitals due to the region’s rapid growth
to demographic segmentation
•  Travel costs may be double the US or European
•  More focus groups must be conducted to rates due to the distances involved.
research the entire market, again due to diversity


Some ideas on addressing the challenges


Primary Research is essential for Market
Intelligence in APAC
Lack of secondary
Rapid Market Changes Grey Markets
information

Tackling market changes, grey markets and lack of secondary
•  Primary research is the best and only way to obtain most up-to-date information and grey market
data.
•  Data collected from primary are most relevant to a particular company’s needs
•  Telephone interviews are cost effective however face-to-face interviews are preferable in some
countries and industries.
•  Good geographical spread of interviews is needed to understand the factors that sharing similarity
and driving difference.


Always cross verify information with primary
research

Secondary information
•  Information is not reliable, unstructured or not valid

Tackling lack of structured and reliable information
•  Always verify the information using multiple sources before reaching any conclusion
•  Test and validate information obtained from secondary sources through primary interviews with
industry players and experts.
•  Cross-checking data with other Asia-Pacific countries when conducting multiple countries study
•  Look for an Market Intelligence partner that has strong industry knowledge and primary research
capabilities.


Work with an Market Intelligence partner with local
knowledge, track record and country-level presence

Diversity
•  Social , Cultural , Language, Economy, etc

Tackling Diversity
•  Tailored approach needed in the information collection process with a geographical element built in
•  Local partners understand the reality on the ground as they are continuously interacting with people
along the value chains
•  Local partners have network of local contacts and know the right points of contact for gathering
information


Establish market monitoring and Market Intelligence
partnerships

•  Customised market monitoring is cost efficient and can help decision makers to understand market
development in short order.
•  By working on continuous projects, the results will become increasingly valuable and fit to the
company context. Switching partners from time to time requires lot of efforts on selection and the
project results are not guaranteed

Repeated process helps the company succeed

MI Partner MI Partner MI Partner
Understand Deliver result
Engage new Work on corporate that fits into Benefit from
project project culture and company the project
expectation context
Company Company

Repeated process helps Market Intelligence succeed


Market intelligence case studies


Business Case (1/2) – Daily market monitoring and
analytical insights for a global logistics leader

Industry: Logistics
Geographic scope: Asia-Pacific, 15 countries
Method : Secondary research, Continuous market monitoring

Strategic objective/issue
•  A leading global logistic giant needed support on sales and marketing updates and strategic
planning through tailored intelligence content.
•  Replace and improve the existing system involving two in-house analysts and email
distribution of weekly and monthly newsletters.
•  Coverage of macro-environment, customer sectors, competitors, and the logistic industry.
Approach
•  Monitoring news in logistics market and competitive environment in English, Arabic,
Japanese, Chinese and Korean, competitor updates and industry reports covering.
•  Delivering daily intelligence via an online portal to 100 users in the client organization across
top management, strategic intelligence, country management and sales & marketing.


Business Case (1/2) – cont’d
Solution
•  GIA created a cost-efficient Intelligence Desk™ market monitoring service which delivers
tailored content and regular analytical summaries for decision-makers, thorough a customized
web-based platform.

Key Benefits
•  Access to the information easily and directly in one customized platform
•  Keep abreast of competitor developments, service launches, acquisitions, and other signals
•  Understand important trends in key customer segments.
•  Make better informed business decisions.


Business Case (2/2) - Market entry and business
expansion analysis for Asia small appliances market
Industry: Consumer & Retail
Geographic scope: Korea, Philippines and Thailand
Method : Primary interviews, on-site observation, market attractiveness analysis and
recommendations

Strategic objective/issue
•  A global leading small appliances maker was looking to strengthen its presence in Asia with
initial thoughts focusing on business expansion in Korea, Philippines and Thailand.

Approach
•  GIA conducted in-depth interviews with industry players and observers such as key
competitors, channel players, prominent master distributors, industry associations, analysts,
and experts.
•  GIA arranged focus group discussions in each country’s major city with consumers to explore
usage, attitudes, perceptions, concept reactions, brand loyalty, etc.
•  On-site observation with retail visits and distributor /showroom visits were also conducted


Business Case (2/2) – cont’d
Solution
•  GIA provided the client with analyzed market and industry structure, drivers and growth, value
chain as well as competitor information.
•  GIA recommended a business expansion strategy including investment prioritization, optimal
channels, product focus and price positioning, and the fastest route to implementation.

Key Benefits
•  The client gained valuable information on the target markets that enabled it to strengthen its
presence in Asia, with initial focus on business expansion in Korea, Philippines and Thailand.


GIA capabilities in APAC

•  Offices in Mumbai,
Singapore, Hong Kong and Shanghai.
•  We help companies understand,
compete and grow, serving both:
!  multinational organizations interested in
doing business in the region, and;
!  local organizations looking for growth in
the region and expansion on a
global level.
•  ~400 consultants on the ground across 16
APAC countries
•  Industry experience in manufacturing and
industrial, chemical, ICT, healthcare, media,
consumer & retail, energy & resources,
media, and financial services


Contact GIA

For additional information
about Global Intelligence
Alliance and our services,
please send an email to
info@globalintelligence.com
or log on to the GIA website
www.globalintelligence.com.


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