Article | Xiaguang Society Guo Zhaochuan
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In the last article, we learned about the current situation of Southeast Asia's D2C consumer brand from the perspective of investors and the entry logic "In depth dialogue: more rational or more gambling in Southeast Asia that we cannot understand". This time, we will start with a well-known phenomenon of Southeast Asia's consumer goods characteristics that has never been truly presented separately, Analyze the core key to the success of Chinese consumer brands in Southeast Asia.
First of all, the key cognition is that when we observe the consumer brand market in Southeast Asia, we should not observe the so-called "overseas brands" from China or with the background of Chinese founders and investors independently. In fact, with the exception of Chinese food, tea and other consumer products with obvious Chinese characteristics, other brand products often do not show obvious Chinese characteristics.
To give a simple example, during the field visit, Xiaguang Society saw the figure of Anta, a Chinese clothing brand going to sea, in many large commercial complexes in Southeast Asia. But in fact, Anta's offline store image is the same as that of other international sports brands, and it is difficult to see the prominent "Chinese character".
Whether online e-commerce or offline physical stores, Seagoing brands have been submerged in the flood of many local brands and world brands. Their main competitors in the local market are not only international brands from Japan, South Korea, Europe and the United States, but also a large number of local mature brands and local start-up brands, thus forming an overall atmosphere for consumer brand entrepreneurship.
So, what is the basic trend of consumer goods preference in Southeast Asia for a long time? What impact has it had on the overall consumer entrepreneurship environment? What is the key to the success of a new consumer brand that has been successful in Southeast Asian countries? How to achieve accurate observation of local market demand, and what is the core of the future layout?
The truly successful start-up brand is a group that has a very profound understanding of the local market demand.
When discussing Chinese consumer goods going to Southeast Asia, we must not ignore the basic trend of consumer goods in Southeast Asia: Japanese and Korean style consumer goods that have occupied the market for many years.
In fact, Japanese and Korean commodity culture has a great influence in many Southeast Asian countries. On the streets of many Southeast Asian countries, such as Indonesia and Malaysia, there are many commodity advertisements marked in Japanese and Korean, especially cosmetics and electrical appliances.
Taking automobiles as an example, the Southeast Asian automobile market has always been known as the "Japanese rear garden". Although the market share of Japanese fuel vehicles in Southeast Asia is declining in recent years, Japanese fuel vehicles have always occupied an important position in the Southeast Asian market.
In terms of catering, in Malaysia and Singapore, the Korean fried chicken restaurant named "Four Fingers" has conquered many local people's stomachs, but in fact, this catering brand is a Southeast Asian local fried chicken fast food chain brand created by the founder from Singapore.
Not only that, in the high-end business district of Kuala Lumpur, Malaysia, there are always convenience stores with Korean brands, and coffee display boards in the stores are marked in Korean.
Based on this cultural phenomenon, many local new brands and Chinese consumer brands going to Southeast Asia are trying to play the "edge ball" of imitating Japanese and Korean commodity styles.
"You can see that a brand that sells well reads like a Japanese brand, but it is actually a fake Japanese brand." A consumer goods merchant who went to Southeast Asia told Xiaguang News Agency that this is actually a local consumer goods brand in Indonesia that is just like a fake. Due to the natural filter of Japanese brands, local people will even prefer such brands.
Therefore, there is an obvious trend, especially in the newly established Southeast Asian consumer brands, that is to imitate the style of Japanese and Korean consumer products in the appearance and functional positioning of brand products, and even there are "holiday" and "fake Korean" brands produced locally that are difficult to distinguish between true and false.
This "fake Japanese and Korean brand" in Southeast Asia is especially obvious in the field of beauty brand sailing.
"It is hard to imagine that young Indonesians, influenced by Han makeup, are increasingly pursuing the concept of 'low-key beauty'." Investors in related fields told Xiaguang.
In recent years, Korean popular culture has had a significant impact on the beauty and makeup trends in Southeast Asia, especially Indonesia, forming a set of beauty standards and makeup styles that can convince local people, such as emphasizing natural and delicate makeup.
Therefore, many cosmetics brands like foundation and mascara are committed to the marketing of "natural beauty without makeup", and even some brands directly copy Japanese and Korean style products and packaging, which makes local people mistakenly think that they are Japanese and Korean brands, thus reducing the pressure on the brand's own capacity.
This idea of "demoulding Japan and South Korea" as the product design and marketing orientation has enabled many new consumer brands in Southeast Asia to take a ride.
This seems to be a "free ride", but it may lay hidden dangers for future brand building.
Whether from the perspective of investment or brand expansion, it is crucial to have a unique brand positioning. Such long-term imitation may confuse local consumers in Southeast Asia with the true source of Chinese brands, commodity quality and supply chain, and have a negative impact on the image and brand loyalty of overseas brands.
In particular, with the rising overseas image of Chinese brands, Japanese and Korean beauty cosmetics are in decline, which may outweigh the benefits in the future.
On the one hand, if Chinese outbound brands from demoulded Japanese and South Korean products simply imitate Japanese and South Korean styles without forming their own unique brand characteristics, there will be insufficient differentiation between brands in the future.
On the other hand, Chinese outbound brands will lack independence and autonomy in the global market, deepening the impression of the local market on the "imitators" of Chinese outbound brands.
Therefore, it is also the conclusion of product positioning from the market phenomenon. Some are shortcuts and the key to opening the market, while others are seemingly smooth detours.
We will turn our attention to the field of small household appliances going to sea.
In fact, in recent three years, new small household appliance brands that have started businesses in Southeast Asia have emerged one after another, and several nearly successful overseas brands have demonstrated excellent market observation.
We have learned about a small household appliance brand in Thailand, whose main product line is small household appliances with high cost performance and low price for local people. Relevant personnel close to the brand said that the brand has done well in Thailand, first, because of the overseas background of the founder's local e-commerce executives, and second, the product design is full of more simplified parts:
"Consumers in Southeast Asia don't like complex products. They need appliances that can work normally by pressing only one button."
Early industry experience and full market understanding, as well as the control of local people's psychology, have become the key to the success of the brand.
Another small household appliance brand that has topped the Indonesian Shopee platform category for many times in the Southeast Asian market, its founder made a key decision at the beginning of the brand, which was different from many white brand dealers at that time, and he decided to be a private brand at the beginning.
He chose to be his own brand rather than just a local agent of domestic brands or white brand products, based on his previous experience as an agent and his judgment of the market. "When the market is ready, the agent will be taken back". The brand is still in its own hands.
Up to now, the products with good brand sales have included vacuum cleaners, rice cookers, hair dryers and other common household appliances, among which, to many people's surprise, the sales of vacuum cleaners in particular are very good in the local market.
Even now, their brand in Southeast Asia can not be regarded as a "high-end brand", and even from the perspective of the whole industry, they are reluctant to be even a mid tier brand, but their shipment order volume is very considerable. Even the overall sales of many internationally famous small household appliance brands in the local e-commerce platform are far from that of this self owned small household appliance brand. Now, the overall brand popularity in Southeast Asia, Indonesia, the Philippines and other countries is very high, laying the foundation for subsequent brand expansion.
In addition to accurate market judgment and observation, most of the time when consumer goods go to sea is just to seize the opportunity. To a large extent, it is only the time of entry that determines the outcome.
The Chinese boss who chose the category of small household appliances for investment and entrepreneurship in Southeast Asia told Xiaguang News Agency that their brand had been operating on mainstream platforms in Southeast Asia such as Shopee for more than four years since the end of 2019, and now it has become the first brand in the field of small household appliances in Southeast Asia.
When talking about their secret of success, he laughed and said, "Advantage, it's early!"
The openness of the sailor also made us realize that in fact, many times the key to the problem is very simple, such as early entry. The vision, observation and judgment behind this, as well as the near death of constantly adjusting the direction in the market change, are also indispensable.
At the beginning of his small household appliances business in Southeast Asia, many of his peers were still "rolling" 3C consumer electronics, which was one of the earliest categories of Chinese consumer goods in Southeast Asia. In his early years, he helped many businessmen to become rich. Our interviewee turned to another category, namely small household appliances, when selling 3C consumer electronics could make money.
In addition, there is also a key accidental factor, which is the epidemic situation in Southeast Asia in the past few years.
Taking advantage of the market opportunities brought by the epidemic, they achieved rapid sales growth and seized the local market.
By 2024, they will begin to plan to go offline from the initial online e-commerce platform, really consider the expansion of the offline market, increase the investment in the local supply chain, and increase the construction of live broadcast rooms and online celebrity delivery investment in content e-commerce platforms emerging in Southeast Asia, such as TikTok.
After all, TikTok live broadcast and Shopee Live are the trend under the current Southeast Asia live broadcast delivery mode. From the current observation of the brand's small appliances live broadcast room, although the traffic of the shrimp live broadcast may be difficult to reach TikTok, the conversion rate is high. It may be that the platform is more shopping oriented, so it helps to improve sales transformation.
The Indonesian market itself is large in scale and has a large population. More importantly, compared with other Southeast Asian countries, the Indonesian market is relatively standardized and even has a more obvious tendency of trade protection. It is a very attractive market for brands that can form their own moats.
Especially for consumer brands with a certain scale, other countries, such as Thailand and the Philippines, may be more relaxed in terms of regulation and compliance, while Indonesia has a relatively high threshold, which is beneficial to established brands, but may be a challenge for new brands.
On the basis of certain brand building, the development of local supply chain is the only way for Chinese overseas brands to go in the local market. The local supply chain has the price advantage, and the supply is more stable. At the same time, it is supported by the local country.
Taking small household appliance brands as an example, they have factories for processing in Indonesia, and factories invested in the region rely on partners for management. Although a large number of Indonesian local workers are laborious in management, some workers have performed well, and over the years they have accumulated several stable "old workers", The local supply chain advantage has become their important "reassurance".
In general, Southeast Asia is a diversified and rapidly changing market. For Chinese consumer brands, going to Southeast Asia is an interesting process full of opportunities and challenges. The balance between localization and internationalization, a deep understanding of the local market, the matching of product positioning and market demand, the use of emerging platforms under the development of the times and the combination of online and offline may all become the key to determine the fate at a certain point in time.
Chinese brands in Southeast Asia should not overemphasize their Chinese attributes, but should integrate into local culture and consumption habits. Chinese brands can attract consumers by imitating local preferred styles, but they also need to form their own unique brand characteristics. At the same time, strengthening the construction of the local supply chain is also the key to the long-term development of the brand.
