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. didn’t succeed until they dropped prices and adapted to local flavors.
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 income growth and young consumer market. Comparing median age across regions, ASEAN’s 28.9 has 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, this is 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.
ASEAN is growing rapidly in both income and expenditure levels. But this growth isn’t evenly spread. For example, comparing Singapore and Vietnam, Singapore boasts an average household annual disposable income level of over US$100,000. Vietnam’s is below US$5,000.
These income disparities are explained by several factors. Reasons include uneven degrees of economic openness, trade liberalization, and financial market development.
Coming hand in hand with income levels are the expenditure levels. The gap here is as large, if not larger. Singapore, the region’s most developed country has an average household expenditure of over US$70,000. Myanmar’s is only US$3,000. This is why the “average household expenditure” figure in ASEAN is 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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