With the official launch of the ASEAN Economic Community (AEC) at the start of 2016, companies around the world want to seize the vast ocean of opportunities that ASEAN represents. To do so, the first step is to understand how to advertise in ASEAN.
Advertising in ASEAN is very different than in other places. For example, fast food giants such as Burger King and Carl’s Jr. did not succeed in until they dropped prices and adapted to local flavors first.
There’s still some time until AEC achieves its goals in becoming a single market and production base. But it’s important to first have an understanding of ASEAN and its consumers. Only then can companies come up with the proper sales and marketing approaches when the time is right.
Why Expand into ASEAN?
ASEAN represents a huge trading bloc of over 634 million people. It is also the third largest consumer market, trailing behind only the giants that are China and India. Key features which distinguish ASEAN from other big consumer markets are its rapid growth in income and its young consumer market. Comparing median age across many similar regions, ASEAN’s 28.9 reveals that it is made up of a populace younger than China’s 37.5, USA’s 37.8, and the EU’s 42.4.
Even though ASEAN is the third most populous consumer market, in terms of trade value it is only number seven. However, that’s predicted to change very soon. Many organizations forecast that before 2030, the ASEAN economy will be worth over US$3.0 trillion – ahead of Japan’s US$2.9 trillion, the UK’s $2.6 trillion, and even the entire Eastern Europe’s $2.5 trillion.
ASEAN is Diverse: A Challenge for Marketers
Firms should not dive into ASEAN without expanding their knowledge first. There are many things to consider, the most important being the great diversity in the region.
Even though ASEAN has rapid growth both in income and expenditure levels, the growth is not spread evenly. For example, comparing Singapore and Vietnam which are on the different ends of the spectrum in the region, Singapore boasts an average household annual disposable income level of more than US$100,000 whereas in Vietnam it is below US$5,000.
Such disparities in income can be explained by the respective countries’ uneven degrees of economic openness, trade liberalization, financial market development, and competitiveness across the ASEAN region.
Coming hand in hand with income levels are the expenditure levels. The gap here is as large, if not larger. Once again, the region’s most developed country, Singapore gets compared to another country at the other end of the spectrum, Myanmar. The average Singaporean household expenditure is over US$70,000 compared to Myanmar’s US$3,000. This is why the “average household expenditure” in ASEAN may be misleading.
As if the disparities in expenditure and income within the regions were not enough, extreme disparities usually exist within each country itself.
Other factors to consider when marketing and advertising in ASEAN are the different cultures, languages, and religions.
Businesses Must Learn How to Advertise in ASEAN
Due to its extreme diversity, companies shouldn’t approach ASEAN with a “one size fits all” strategy. They should opt for a more locally adapted one.
This will help ensure that firms can capture their targeted consumer market. Before that, firms must gain a more thorough understanding of consumers and decide whether they should even enter in the first place.
However, should firms be able to overcome ASEAN’s challenges, they will gain access to one of the fastest growing markets in the world made up of a young, aspirational, and increasingly connected population.
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