How to conduct market research in emerging markets in Asia.

The world has long predicted the massive potential of Asia’s rise, but it’s time for the rest of the world to adjust its outlook. The reality is that the future has arrived even sooner than anticipated.

According to the Asian Development Bank (ADB), developing economies in Asia and the Pacific are expected to experience faster growth this year, fueled by the easing of pandemic restrictions and boosting consumption, tourism, and investment. The region’s growth prospects are particularly brightened by the reopening of the People’s Republic of China (PRC), which has shifted away from its zero-COVID strategy.

The ADB’s Asian Development Outlook (ADO) April 2023 report projects that economies in Asia and the Pacific will grow by 4.8% this year and the next, representing an improvement over the 4.2% growth rate seen in 2022. While developed countries are facing a growth slowdown, the emerging economies in Asia are set to thrive, with projections suggesting excluding the PRC; developing Asia is forecasted to grow 4.6% this year and 5.1% in 2024. Meanwhile, the region’s inflation is expected to gradually moderate towards pre-pandemic levels, although there may be considerable variation across different economies.

What’s fueling this growth? Favorable demographic trends with a young population, a growing middle class, and high-tech adoption rates are just a few factors responsible for this upward trend. With such impressive growth rates, it’s no surprise that more and more companies are expanding their operations and eyeing entry into these markets.

Exciting factors like a burgeoning middle class, ongoing urbanisation, and high technology adoption in countries like India, Vietnam, and the Philippines contribute to this explosive growth. But, hold on, there are risks involved too.

Cultural and language barriers and the need for more information and data make market research in these markets more challenging. Are you ready to take the plunge and seize the opportunities offered by these emerging economies?

With an impressive growth rate, it’s no wonder businesses worldwide are turning their attention to these emerging economies, eager to tap into their enormous potential. But, to successfully penetrate these markets, comprehensive market research is crucial. In this blog post, we’ll explore how to conduct market research in emerging markets in Asia and identify the key factors to consider with real-world examples of global brands and how they entered these markets.

Understand the Market.

The first step in conducting market research in emerging markets is understanding the market. This includes understanding the economic, political, and cultural environment, as well as the needs and preferences of the target audience. Companies must conduct thorough research to understand the local market, including the competitive landscape, regulatory environment, and consumer behaviour.

Identify the Target Audience.

The next step is to identify the target audience. This includes understanding the target audience’s demographics, psychographics, and buying habits. Companies need to research to understand the needs and preferences of the local population and how they differ from other markets.

Use Local Research Partners.

Companies should consider partnering with local research partners to overcome language and cultural barriers. At Kadence International, we have a breadth of coverage worldwide, with offices in ten countries.

Local research partners can provide valuable insights into the local market and help companies understand the target audience’s cultural nuances.

Consider Online Research Methods.

Online research methods can be an effective way to conduct market research in emerging markets. Online research methods can gather data from a large and diverse population sample and can be completed quickly and cost-effectively.

Pay Attention to Cultural Nuances.

Cultural nuances are essential to consider when conducting market research in emerging markets. Companies need to understand the cultural norms and values of the local population and adjust their research methods accordingly.

When Coca-Cola entered the Myanmar market, it conducted online surveys to understand the local market. Coca-Cola used online surveys to gather data on the local population’s beverage preferences and habits.

When US-based fast food giant KFC entered the Chinese market, it had to adapt its menu to appeal to the local population. KFC introduced menu items that catered to local taste preferences, such as rice dishes and egg tarts. Similarly, when McDonald’s entered the Indian market, it conducted extensive research to understand the local market. The brand has no beef or pork products on its menu and adopted certain items and their names for the Indian market, like the Maharaja Mac.

Ownership structures

Asian companies have emerged as global leaders in traditional industries such as industrial and automotive sectors and in areas such as technology, finance, and logistics. The last two decades have seen a shift in the industry mix of the region’s largest companies, with a decline in the manufacturing of capital goods and growth in infrastructure and financial services.

When it comes to ownership structures, growth strategies, and operating styles, Asian corporate giants differ significantly from publicly owned Western multinationals. About two-thirds of the 110 Chinese companies listed in the Fortune 500 are state-owned, and the region also boasts several large conglomerates.

In Japan, the “big six” keiretsu also have significant weight in the country’s equity market, with each owning numerous companies across multiple industries. For instance, all major Japanese car manufacturers can be traced back to a keiretsu.

And India’s top six conglomerates alone employ more than two million people.

Emerging Markets in Asia

Here are some examples of emerging markets in Asia:

China: A large, fast-growing economy with a massive population and a rapidly expanding middle class, supported by a government policy of reform and opening up to the world.

India: Boasting a young and growing population, a rising middle class, and a government focused on reform, India is poised to be one of the fastest-growing economies in the world

Indonesia: With a young population, a rapidly urbanising society, and a large consumer market, Indonesia is a thriving economy and an attractive destination for foreign investment.

Vietnam: An economy that has transformed rapidly in recent years, Vietnam is home to a young and growing population, low labor costs, and an expanding manufacturing sector.

Philippines: A country with a young and educated workforce, a large consumer market, and a rapidly expanding services sector, the Philippines is a popular destination for foreign investment and outsourcing.

Malaysia: An economy that has diversified beyond its traditional focus on commodities, Malaysia is home to a well-educated workforce, a thriving manufacturing sector, and a growing services sector.

Thailand: A popular tourist destination and manufacturing hub, Thailand is home to a large and growing consumer market, a robust agricultural sector, and a thriving services sector.

Bangladesh: With a large and growing population, a low-cost labor force, and a government committed to reform and development, Bangladesh is one of the fastest-growing economies in the world.

Pakistan: A country with a large and young population, a thriving agricultural sector, and a rapidly growing services sector, Pakistan has enormous economic potential.

Myanmar: With over 50 million people and an economy opening up to the world, Myanmar is poised for rapid growth in the coming years.

Cultural Aspects Brands Need to Know

When conducting market research in emerging markets in Asia, companies need to understand the cultural aspects of the local population. Here are some cultural elements that brands need to know:

Collectivism vs. Individualism.

Some cultures are more collectivistic, where the needs of the group are prioritised over the needs of the individual. Other cultures are more individualistic, where the needs of the individual are prioritised over the needs of the group.

High vs. Low Context.

Some cultures are high-context, which means they rely heavily on non-verbal communication and indirect language to convey meaning. Other cultures are low-context, where people rely more on direct communication and explicit language.

Power Distance.

Some cultures have a high power distance, with a significant distance between those in authority and those who are not. Other cultures have a low power distance.

Masculinity vs. Femininity.

According to Geert Hofstede, “masculine” and “feminine” are often used to describe society’s cultural dimensions. These dimensions are based on various cultural variables, such as values, beliefs, and attitudes.

In a “masculine” culture, competitiveness, assertiveness, and material success are highly valued. This may lead to a focus on achievement and advancement in the workplace, emphasising individual success over group cohesion. There is also a tendency to prioritise ambition and competition over collaboration and empathy.

In a “feminine” culture, on the other hand, collaboration, empathy, and social harmony are emphasised. There may be less focus on material success and more on the quality of life, work-life balance, and social responsibility. In the workplace, there may be more emphasis on collaboration and teamwork, with less emphasis on hierarchical structures or individual achievement.

It’s worth noting that these cultural dimensions are not binary or mutually exclusive, and different cultures may exhibit varying degrees of masculine and feminine characteristics. Additionally, individuals within a culture may have unique values and beliefs that don’t necessarily conform to cultural norms.

Religion.

Religion can also play a significant role in shaping cultural values and norms in emerging markets. Companies need to understand the religious beliefs and practices of the local population and how they may impact consumer behaviour. For instance, in Indonesia, where most of the population follows the Islamic faith, even non-food companies must consider “halal” concepts.

Case Study: Coca-Cola in India

Coca-Cola is a global brand that has successfully entered emerging markets in Asia. One example is India. Coca-Cola entered the Indian market in 1993 and initially faced challenges due to cultural and political barriers. The company had to adjust its marketing strategy and product offerings to appeal to the local population.

Coca-Cola conducted extensive market research in India to understand the local market. The company discovered that the local population preferred sweeter beverages and was concerned about water quality. Coca-Cola adjusted its product offerings to include sweeter beverages and invested in local water treatment facilities to ensure the quality of its products.

Coca-Cola also adjusted its marketing strategy to appeal to the local population. The company used local celebrities and cultural events in its advertising campaigns to create a solid emotional connection with the local audience.

Due to language and cultural barriers, conducting market research in emerging markets in Asia can take time and effort.

However, with the right approach, companies can enter these markets and create successful branding strategies. Understanding the local market, identifying the target audience, using local research partners, considering online research methods, and paying attention to cultural nuances are all critical factors to consider when conducting market research in emerging markets.

Companies that take the time to conduct thorough market research and adjust their branding strategy to meet the needs of the local population can create a strong and lasting impression with their target audience.

Challenges brands face in emerging markets and strategies for overcoming them.

While emerging markets in Asia offer significant growth opportunities for brands, they also present unique challenges that brands must overcome. These challenges include language and cultural barriers, limited infrastructure, and the need for more data and information.

Language and Cultural Barriers.

One of the primary challenges brands face in emerging markets is language and cultural barriers. Companies must understand the local language and cultural nuances to develop a successful branding strategy that resonates with the target audience.

To overcome language and cultural barriers, brands should consider partnering with local marketing agencies and research firms. These firms can provide valuable insights into the local culture and language, help develop messaging that resonates with the target audience, and ensure that the brand’s message is culturally sensitive and appropriate.

When Nike entered the Chinese market, the company partnered with a local marketing agency to develop a branding strategy that resonated with the local population. The agency provided insights into the local culture and language, which helped Nike develop messaging that resonated with the target audience.

Limited Infrastructure.

Another challenge brands face in emerging markets is limited infrastructure. Emerging markets may need more access to transportation, communication, and other essential infrastructure, making it difficult for brands to distribute products and conduct market research.

To overcome limited infrastructure, brands should consider developing innovative distribution strategies that leverage local infrastructure. For example, when Coca-Cola entered the Myanmar market, the company partnered with local distributors to establish a distribution network that leveraged local transportation infrastructure.

Lack of Data and Information.

Another challenge brands face in emerging markets is a need for more data and information. Emerging markets may need more access to data and information, making it difficult for brands to conduct market research and develop a successful branding strategy.

To overcome the lack of data and information, brands should consider investing in primary research methods, such as surveys, focus groups, and interviews. These research methods can help brands gather data and information directly from the target audience and provide valuable insights into consumer behaviour.

Regulatory Challenges.

Another challenge brands face in emerging markets is regulatory challenges. Emerging markets may have different regulatory frameworks, making it difficult for brands to navigate the local market and establish a presence.

To overcome regulatory challenges, brands should consider partnering with local experts who understand the local regulatory environment. These experts can provide valuable insights into local regulations and help brands navigate the local market.

Market research methodologies brands use to enter emerging markets in Asia.

Market research methodologies are diverse and should be tailored to the specific needs of each market. Surveys, focus groups, ethnographic research, in-depth interviews, social media monitoring, and big data analytics are some of the most commonly used market research methodologies in emerging markets in Asia.

Using these methodologies, brands can collect accurate and relevant data and develop successful branding strategies that resonate with the target audience.

As brands look to enter emerging markets in Asia, they must use market research methodologies tailored to each market’s specific needs. Market research methodologies in Asia are diverse, and brands must choose a suitable method to collect accurate and relevant data.

Surveys and Questionnaires.

Surveys and questionnaires are the most commonly used market research methodology in emerging markets. Surveys are typically used to gather data on consumer behaviour, preferences, and attitudes. They can be conducted face-to-face, online, or by phone.

In India, brands often use surveys to understand the local market. For example, when Coca-Cola entered the Indian market, it surveyed the local population’s beverage preferences and habits.

Focus Groups.

Focus groups are another popular market research methodology involving a small group discussing a specific product or service.

These groups can provide valuable insights into consumer behaviour, attitudes, and preferences.

Apple conducted focus groups to understand the local population’s needs and preferences when it entered the Chinese market.

Ethnographic Research.

Ethnographic research involves observing and studying people in their natural environment. This methodology helps understand consumer behaviour and preferences in a specific cultural context.

In Thailand, brands often use ethnographic research to understand the local market. For example, when Unilever entered the Thai market, it used ethnographic research to understand the local population’s skincare habits and preferences.

In-Depth Interviews.

In-depth interviews involve one-on-one interviews with participants to gather detailed information about their behaviour, attitudes, and preferences. In-depth interviews can provide valuable insights into consumer behaviour and preferences.

In Vietnam, brands often use in-depth interviews to understand the local market. For example, when Nike entered the Vietnamese market, it conducted in-depth interviews with local consumers to understand their needs and preferences.

Social Media Monitoring.

Social media listening and monitoring involves monitoring and analysing social media platforms to gather consumer behaviour and preferences data. Social media monitoring can provide real-time insights into consumer behaviour and preferences.

In Indonesia, brands often use social media listening and monitoring to understand the local market. When McDonald’s entered the Indonesian market, it monitored social media to understand the local population’s reaction to its menu items and marketing campaigns.

Big Data Analytics.

Big data analytics involves analysing large volumes of data to identify patterns and trends. This methodology helps understand consumer behaviour and preferences at a large scale.

In the Philippines, brands often use big data analytics to understand the local market. For example, when Nestle entered the Philippine market, it used big data analytics to understand the local population’s food preferences and habits.

Emerging markets in Asia offer significant growth opportunities for brands but also present unique challenges. To establish a successful presence in these markets, brands must overcome language and cultural barriers, limited infrastructure, lack of data and information, and regulatory challenges. By partnering with local experts, investing in primary research methods, and developing innovative distribution strategies, brands can overcome these challenges and grow a successful branding strategy that resonates with the target audience.

When looking to conduct panel research, consider partnering with Kadence International, a multi-award-winning global market research agency with extensive experience and expertise in panel research. Contact us today to learn more about our panel research services and how we can help you gather the insights you need to drive business success.

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