*Cosmetics Vision Special*
Alain Khaiat defines a winning strategy for cracking Asia
With the likes of Europe and the US remaining stagnant in terms of growth; the Asia Pacific specialist revealed how cosmetic brands can capture opportunities in emerging markets.
“The focus used to be on BRIC: Brazil, Russia, India, China. Now it’s about BIITS: Brazil, India, Indonesia, Turkey, South Africa,” he informed a packed room of industry professionals at the Saint Martinez hotel in Cannes.
Geographic breakdown - markets worth investing in
According to a recent E&Y report on 25 emerging markets, growth will reach 4.7% in 2014, and 5% in 2015, up from 4.4% in 2013.
The fastest growing economy in Asia, after China, is the Philippines which Alain says will see growth in the long term as opportunities will be created by demographic and economic growth.
The consultant went on to recommend companies invest in other less 'main stream' emerging markets like Vietnam which has in excess of 90 million people.
"Many multi national companies are taking positions in these markets by buying local brands, establishing development centers, and/or, simply, by launching their newest products," he informs attendees.
"But be ready to invest for the long term and accept the short term turmoil," he warns.
Learn from previous mistakes and recognise the reality of consumer needs
Finally, the AP expert outlined where international brands have gone wrong in the past when attempting to crack the region's markets.
He states that approaches like 'I've been successful elsewhere, so I will just re-apply the same idea here', 'I'll buy a small local company to distribute and use the same brand and pricing strategy;' or even an attitude of 'Regulators do not have the means to check,' is detrimental to a brand's success in Asia.
Alain cautions that consumers have different needs, are informed and want the best products at a price they can afford and regulators are indeed on top of their game.
The second Cosmetics Vision is already in the planning stages for next year, and should again take place at the Martinez Hotel in Cannes during the month of March. Exact dates and programme details are set to be released in the Autumn.
