Originally published 17 August 2016 on LinkedIn.
I have a pet hate. It is the term “The Far East”. In my experience it is usually uttered by Europeans with a little more of a patronising tone than I can bear as they say “Yes, we really must consider our strategy for the Far East”. In respect to their business strategy for Asia, of course.
It conjures up images of colonial men in pith helmets and mustaches about which modern day hipster would proudly Instagram. However, it is inaccurate and deeming. There are 48 counties in Asia extending from Turkey in the west to Japan in the east and everything in between.
East is a direction and not a location – take it from someone who is originally from a place further east of Asia.
Anyone who has spent a significant amount of time in Asia will tell you a patriarchal attitude will limit you in business in the region. Mike Smith, former CEO for ANZ, wrote an excellent article to this effect.
My second pet hate, whilst I am on the subject, is assuming all nationalities in the region can be generalised into one consumer group. It is extraordinary that it still happens. Asia is a cultural kaleidoscope of differing languages, religions, resources, levels of economic development and government control. It pays to get to know some of the details.
So here are some things which I found interesting about Asia.
1. China is not the only tiger in the room
According to the OECD’s’ 2016 Economic Outlook for Southeast Asia, China and India, the latter has one of the highest economic growth rates in the region. Growth in the ASEAN countries will be led by the Philippines and Vietnam. Some of the most prolific buyers I have encountered were Indonesian, Malaysian and Thai so it pays to look at little further into the other markets in the region.
Germany’s government debt to GDP ratio is 78% whereas Indonesia’s is 26.2%. In fact, most Asian countries have a low debt-to-GDP ratio due to their growth; with the notable exception of Japan.
This point is not to demonstrate Indonesia’s economic management prowess but for me, it indicates the growth of these economies is outstripping the investment into their domestic infrastructure and markets. This investment will come and there is plenty of opportunity to partner with governments and locally grown enterprises.
3. Where is the point of sale?
A 2015 study by Bain & Company on consumers of luxury products found Mainland Chinese represent 31% of global luxury purchases but 80% of their purchases are made in Europe, South Korea and even Japan. This has ramifications on where marketing dollars are spent and where the returns on investments are felt.
This is fairly well known.
What I found even more fascinating is the results of a survey Singapore Tourism Board completed for its powerful retailers. The report found the Chinese do an extraordinary amount of research before travelling. Chinese travel blogs give detailed information on which cities and locations within those cities for the cheapest deals on watches, jewellery, clothing, leather goods and ever conceivable personal item. Influencing buyers at this point of desktop research can make an enormous impact.
4. Lunch matters
So this is ostensibly the least serious of all my discoveries but should not be underestimated.
I have not lived and worked in every Asian country but I am willing to bet my reputation on the following – lunch matters. In general, food is central to Asian cultures (yes a dreaded generalisation) and for the working population, this culminates in a daily lunchtime ritual.
It does not need to be a long lunch or an expensive one but it will be discussed at great length and it will be delicious. My advice, go to lunch. You won’t regret it.