• Rise of Asian consumers
• Increased sophistication amongst Asian consumers
• Managing businesses in Asia
• Singapore as the ideal consumer businesses hub
• Raising efficiency and lowering cost through centralization
• Driving growth across Asia while managing regional diversity
• Innovating the next product for Asia in Singapore
• Growing a strong base of talent

Asia's stellar economic growth has created a burgeoning consumer market 1. Increasing affluence in Asia will see 3.2 billion people moving into the middle class segment by 2030, up from 525 million in 2009. Asia will also account for more than 80% of the growth in global middle class spending, which amounts to US$55 trillion from US$21 million in 2009. This presents tremendous business opportunities for companies to position their products and services to capture consumer demand in Asia.

¹ Refers to all the individuals and households who purchase goods and services for personal use.

 

Affluent Asian consumers are demanding more sophisticated products and services which cater to their needs and preferences. Research shows that Asians have different biology and physiology from Caucasians in areas such as skin conditions and propensity towards illnesses. The Asian context and culture also manifest themselves in consumers' tastes and lifestyle choices differently. Asian consumers' cultural backgrounds influence the way they interpret information. For instance, the more collectivistic nature of Asians drives them to consider the social context holistically before an idea. Asians also access information quite differently, with Asian consumers possessing a higher level of familiarity and comfort with using cell phones as entertainment devices compared with consumers in Europe and North America.To effectively capture a slice of the Asian market, repackaging products created for Western markets and selling them in Asia will no longer suffice. Companies need to understand such differences to use innovative ways to better reach out to Asian consumers.

Businesses are sitting up to the growing importance of consumer markets in Asia. Beyond selling their products and services to Asia, companies are looking at best practices on how to organise their operations in Asia to better capture market share. Companies have found value in centralising shared services functions to reduce resource usage and drive efficiency. They have also consolidated consumer research and brand charter management activities to be close to important, high growth markets. In response to a growing Asia, they also deploy a greater proportion of leadership into Asia to gain a deeper understanding of the region to drive revenue growth.

Asia is growing at unprecedented pace and this brings about abundant opportunities for consumer companies. For companies looking for a location to base their key activities in the region, there can be no better platform than Singapore.

Singapore, nestled in the heart of Asia, provides an ideal and neutral base to drive pan-Asian operations. It is one of the easiest locations in the world to do business and Singapore is constantly focused on developing the building blocks for consumer product companies to understand and innovate for Asian consumers. As a vibrant lifestyle city, companies can also attract and retain the necessary talent to run a successful business.

Doing business across vast Asia effectively requires good coordination. Companies can enhance efficiency and productivity, and lower operating costs by centralizing key shared services functions in Singapore. Singapore has a strong base of professional services comprising logistics firms, accounting firms, legal firms, human resource firms and business consultancies to support such activities.

Consumer product companies can also tap on Singapore's pro-business environment, rated top in the global league (EIU Country Forecast 2010), to drive their international businesses out of Singapore. Singapore possesses excellent global connectivity, established business infrastructure, leading logistics and supply chain management capabilities. Singapore also offers the best intellectual property protection in Asia (The Global Competitiveness Report 2011-12, World Economic Forum) and is a signatory to major Intellectual Property Rights (IPR) conventions and treaties. This helps to protect the innovative ideas that are the lynchpin of a company's growth strategy.

Leveraging Singapore's strengths to grow in Asia, LVMH Fragrances & Cosmetics, the cosmetics and perfumes unit of the world’s largest luxury goods company, and Diageo, the world's largest premium alcohol beverage distributor, have both set up regional distribution centres in Singapore to serve customers in the Asia-Pacific market more effectively and lower cost.

Singapore's multi-ethnic culture and connectivity to the region provide companies with a pan-Asian perspective required to grow in Asia. Tapping on Singapore's pan-Asian consumer insights and design capabilities, companies can strike a balance between the need for global brand consistency and catering to the diverse, regional cultural sensitivity within Asian markets. Singapore's vibrant consumer businesses ecosystem consisting of market research firms, marketing, communication and creative adjacencies enables companies to drive growth strategies, e.g., product development, brand building and management, across Asia from Singapore.

Tapping on the advantages of a pan-Asian base are P&G and Unilever, who undertake global brand management for iconic brands like Pantene, Gillette, Lux and Clear out of their Asia Pacific headquarters in Singapore.

Singapore's base of integrative research capabilities, ranging from chemistry to food sciences and biomedical sciences to engineering has grown in scope and depth over recent years. With that, coupled with a strong talent base built up from the local universities and polytechnics, companies are able to synergize the wide-ranging capabilities across 14 national research institutes and conduct in-depth scientific R&D for nutrition, and skin and hair care.

Building upon this is the push to establish Singapore as the region's consumer insights hub. To this end, the S$77million Institute on Asian Consumer Insight was established in Jul 2011 with the aim of being the thought-leader in understanding pan-Asian consumer needs, wants and preferences. It will conduct research and education programmes which help firms innovate brands, products and services that meet the needs and aspirations of consumers across Asia. In addition, there are plans to create platforms to facilitate multi-party collaborations, helping companies deepen their understanding of consumer insights and translate the insights into tangible products. The strong base of the top five flavours and fragrances houses also plays an integral role in formulating and perfecting the next product for Asia in Singapore.

Recognizing the need for Asia-specific innovations, Nestlé's R&D Centre in Singapore was the company's first in Asia when it was set up 30 years ago. It is now the Asia Pacific Innovation Hub for Culinary, Beverages and Packaging Solutions, working with various partners in Singapore to provide innovative and great tasting food and beverage solutions with nutritional superiority. Johnson & Johnson also has a 30-man skincare R&D centre with the complete value chain of activities in Singapore, including the Global Skin Fairness Platform Technology. Products developed from Singapore include Neutrogena Fine Fairness Serum.

Companies can access, recruit, develop and deploy the requisite talent in Singapore to helm and run operations in Asia. The established ecosystem of local and international business schools provides a constant supply of managerial talent which companies can tap. For companies which intend to develop in-house executive courses or training programmes for employees, the Human Capital Leadership Institute can facilitate the process by providing insights into Asian organizational cultures and bringing together best-in-class faculty members to lead the programmes.

Testimony to Singapore's status as a talent hub is Unilever's Four Acres Singapore, Unilever's only other training and development facility aside from Four Acres in London. It will play a significant role in building the talent and leadership required for Unilever to achieve its ambition of doubling the size of its business while reducing its environmental impact by 2020.

The best idea in the world means little if it is lost. Today, Singapore offers the number one intellectual property protection in Asia (The Global Competitiveness Report 2007-2008, World Economic Forum) and is also a signatory to major Intellectual Property Rights (IPR) conventions and treaties. Recognising this favourable environment, Global Brands, the leading product licensing, brand management and retail development partner for sports, entertainment and lifestyle brands worldwide has relocated its global HQ to Singapore. The company manages the global rights of brands such as Disney and Warner Brothers from Singapore.