In the game of global expansion, one economic behemoth stands above all – China. With a staggering GDP growth rate that averaged 9.52% from 1989 until 2021, the Middle Kingdom has transformed itself into a labyrinth of opportunity. The sheer scale of China’s market has made it a tempting prospect for brands worldwide. Recent success stories like Tesla’s explosive growth, with China accounting for nearly 30% of its global sales in 2020, highlight the immense potential of this market.

But for all its allure, the Chinese market is not a terrain for the faint-hearted. A complex cocktail of regulatory minefields, a unique digital ecosystem, and ever-shifting consumer preferences can turn a promising venture into a cautionary tale. Cultural nuances often translate into unforeseen challenges, making market entry a multidimensional puzzle requiring precision, insight, and agility.

With an intricate understanding of the challenges brands face looking to make their mark in China, this blog will unfurl a roadmap. By diving into the intricacies of the Chinese market, laying out the blueprint for strategic planning, and delving into the nuts and bolts of execution and implementation, it aims to offer a comprehensive guide to those poised on the cusp of the Chinese frontier. 

Understanding the Chinese Market

Cultural Insights:

Navigating the Chinese market isn’t merely a matter of logistics and economics; it’s an exploration into a rich tapestry of culture, tradition, and evolving social norms. China’s 5,000-year history has shaped a unique consumer psyche that Western paradigms often find enigmatic.

From the Confucian values that underscore collective welfare to the Millennial embrace of digital-first lifestyles, understanding consumer behaviour in China is a study in contrasts and convergence. Face (Mianzi), relationships (Guanxi), and a burgeoning sense of nationalism are more than mere cultural anecdotes; they are the keys to unlocking consumer trust and loyalty.

Collaborating with seasoned market research firms like Kadence International can offer an in-depth analysis of local tastes and preferences. Tailored research delves into the hidden nuances of consumer behaviour, providing a pathway through the cultural labyrinth that awaits foreign brands.

Regulatory Landscape:

China’s regulatory terrain is both intricate and dynamic. From trademark laws that follow a first-to-file principle to the notorious Great Firewall that governs the digital space, compliance isn’t a mere tick-box exercise; it’s a strategic imperative.

The playing field changes frequently in areas such as data protection, advertising standards, and import regulations. A thorough understanding of local laws and a partnership with a research firm well-versed in Chinese regulations can navigate the legal complexities. Insights from local firms can provide a lay of the land and real-time updates on the shifting sands of Chinese legislation.

Market Trends & Dynamics:

China’s market isn’t a monolith; it’s a mosaic of trends, segments, and opportunities. The landscape is diverse, from the luxury boom in tier-one cities like Shanghai and Beijing to the digital embrace in lower-tier cities.

E-commerce giants like Alibaba and JD.com have revolutionised retail, while local competitors are always on the rise, often with state backing. Health and wellness, sustainability, and the integration of technology and tradition represent current trends driving consumption.

Staying ahead of the curve in such a dynamic market requires more than casual observation. It mandates a research-driven approach. Consulting with market experts can provide actionable insights and localised strategies to capitalise on emerging opportunities and prevent unforeseen challenges.

Strategic Planning

Target Audience Identification:

The vibrancy of China’s market landscape is mirrored in its populace. A monolithic approach to audience segmentation here is not just imprudent; it’s untenable. The sprawling urban landscapes and the burgeoning middle class contrast sharply with rural realities. Demographics tell only a part of the story.

Understanding psychographics – aspirations, attitudes, and lifestyle preferences – is pivotal in constructing an empathetic and resonant brand narrative. Millennials in Shenzhen might be driven by technology and innovation, while the older generation in Hangzhou finds solace in tradition. Collaboration with a market research agency like Kadence International can offer a granular view, enabling brands to craft messages that echo in the hearts and minds of diverse Chinese consumers.

Product/Service Localisation:

If globalisation was the buzzword of yesteryears, ‘glocalisation’ reigns supreme today, especially in China. KFC’s congee or Disney’s Mulan are not mere marketing stunts but testaments to a deep understanding of local tastes, language, and culture.

From package designs bearing auspicious symbols to products aligned with Traditional Chinese Medicine (TCM), localisation is not an option; it’s a mandate. 

Engaging with research and consultancy experts allows brands to infuse local sensibilities without losing the global essence. 

Channel Selection:

In the land where cash is passé, and QR codes are king, selecting the proper sales channels is a strategic endeavour. E-commerce platforms like Taobao are only the tip of the iceberg. Live-streaming sales, social commerce on platforms like WeChat, and even new retail concepts that merge online and offline experiences are part of China’s complex retail ecosystem.

Traditional brick-and-mortar stores also hold sway in certain segments. The balance between online and offline channels must be meticulously planned. Collaborating with research firms can provide insights into channel preferences across consumer segments. By aligning with experts, brands can select channels that don’t just reach the audience but resonate with them.

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Execution & Implementation

Partnerships & Collaboration:

In the Chinese market, success is often spelt with a ‘P’ – Partnerships. The local business environment is a maze best navigated with guidance from those who call it home. From technology giants to local distributors, forging strong alliances can be the cornerstone of successful market entry.

Collaborating with a joint venture partner can grant access to local know-how, governmental goodwill, and coveted distribution channels. But this road is fraught with risks and must tread with caution. Engaging with firms with a profound understanding of the landscape can match foreign brands with the most synergistic local partners, ensuring a harmonious and profitable alliance.

Marketing & Advertising Strategy:

Marketing in China is a world in itself. Gone are the days when simple translations sufficed; today, brands must converse in a language that resonates with the Chinese soul. Digital platforms like Weibo, WeChat, and Douyin (TikTok in China) command vast audiences, each with its unique characteristics and user behaviours.

Influencer marketing, known as KOL (Key Opinion Leaders) marketing in China, is a potent tool for turning public figures into brand ambassadors. The Chinese consumer’s trust in peer recommendations and KOLs offers a rich marketing vein to tap.

A nuanced strategy tailored to the local digital ecosystem is not a mere advantage; it’s a necessity. Collaborating with market researchers and local agencies can craft campaigns that sing the brand’s song in a distinctly Chinese melody.

Supply Chain & Logistics Management:

China’s logistical landscape is as vast as it is varied. From sprawling mega-cities to remote rural areas, warehousing, distribution, and shipping must be orchestrated precisely. Tariff barriers, regulatory compliance, and even packaging norms vary across regions.

An efficient supply chain isn’t just about moving products; it’s about ensuring that the brand’s promise is delivered intact, every time, everywhere. This requires a harmony of technology, local expertise, and strategic foresight.

Connecting with experts can create a seamless transition from global procedures to localised supply chain mastery. It’s about delivering not just products but trust and reliability – commodities prized in the Chinese market.

Risks and Challenges

Competition Analysis:

In the crowded Chinese marketplace, competition is fierce and multifaceted. The titans of local industry stand tall, backed by vast resources and a deep understanding of local nuances. Brands like Alibaba, Tencent, and Baidu are not just businesses but phenomena shaping the market landscape.

International competitors are equally formidable, often armed with significant resources and aggressive strategies. Understanding local and international adversaries is a complex task requiring more than surface-level analysis. 

Collaboration with local and knowledgeable research firms can help unveil competitors’ strategies, strengths, and vulnerabilities, forming the backbone of a resilient market entry strategy in China.

Intellectual Property Considerations:

The terrain of intellectual property (IP) in China is precarious. Trademarks, patents, copyrights – all are governed by a legal framework that’s both unique and exacting. The first-to-file system for trademarks is notorious for causing headaches for unsuspecting foreign brands.

IP protection isn’t just a legal necessity; it’s a strategic imperative in a market where counterfeiting and imitation are prevalent. Engaging with trademark experts can provide a shield against potential infringements and craft a strategy that respects local laws while safeguarding the brand’s essence.

Potential Pitfalls & Solutions:

The road to success in China is strewn with potential pitfalls. Common mistakes range from inadequate localisation to misunderstanding local regulations and misalignment with local digital platforms.

  • Inadequate Localisation: Superficial adaptations can lead to cultural blunders. Working closely with cultural consultants and market researchers ensures the brand resonates with the local audience.
  • Regulatory Missteps: Compliances are complex and ever-changing. Collaborative efforts with legal experts and research firms can keep brands abreast of regulatory changes.
  • Digital Misalignment: Choosing the wrong platforms or incorrect digital strategies can lead to wasted resources. Local digital experts can align strategies with platforms that reach and resonate with the target audience.

Mitigating these risks requires an approach grounded in deep market understanding, local expertise, and continuous monitoring. Partnering with experts with local knowledge ensures that brands are not just reactive to these challenges but proactively strategising to avoid them.

Case Studies

Success Stories:

Tesco’s Joint Venture Success: The UK-based retail giant Tesco entered China’s market by forming a joint venture with China Resources Enterprise. This strategic partnership allowed Tesco to leverage local knowledge while introducing its global retail expertise. The synergy led to a win-win scenario, enabling Tesco to carve a niche in the hyper-competitive retail space.

Singapore’s CapitaLand’s Real Estate Triumph: Singapore’s CapitaLand recognised the potential of China’s real estate market early on. Through strategic investments and an understanding of local real estate dynamics, CapitaLand has become a prominent player in China’s burgeoning real estate sector. Its success demonstrates the value of in-depth market analysis and strategic risk-taking.

Lessons Learned:

Marks & Spencer’s Market Misstep: British retailer, Marks & Spencer’s foray into China, was plagued by a lack of local understanding—misjudging consumer preferences and failing to localise offerings led to their eventual exit from the market. The lesson is clear: superficial understanding and insufficient localisation can lead to failure, even for a well-established global brand.

Japan’s Rakuten’s E-Commerce Challenge: Japanese e-commerce giant Rakuten entered China with high hopes but faced immense challenges due to fierce local competition and an inability to align with Chinese online shopping behaviour. Ultimately, Rakuten had to withdraw from the Chinese market. The takeaway is the importance of understanding local digital landscapes and recognising that what works in one market may not translate directly to success in another.

The Chinese market’s dynamism offers both opportunities and challenges. Success here requires a blend of local insights, strategic planning, and agile execution. Collaborative efforts with local experts provide a comprehensive understanding of the market, consumer behaviours, competitive landscape, and regulatory compliances.

These case studies illustrate that no matter how big or small, brands must approach the Chinese market with humility, curiosity, and a willingness to learn and adapt. These stories tell us that the path to success in China is rarely a straight line. It’s a winding road that requires navigation with care, expertise, and an eye on the ever-changing landscape.

Final Thoughts

With its vast potential and intricate nuances, the Chinese market is more than a mere economic frontier; it is a complex tapestry woven with culture, innovation, tradition, and ambition. For the brave, it offers a dance with dynamism, a symphony of opportunities that, if orchestrated with finesse, can lead to monumental success.

Critics often argue about the pitfalls, the regulatory minefields, and the cutthroat competition. While these challenges are real, they don’t overshadow China’s tremendous potential. It’s not just about the sheer numbers or the meteoric economic growth; it’s about being part of a market redefining global commerce’s future.

The journey into the Middle Kingdom is neither for the faint-hearted nor for those seeking quick wins. It demands respect for its uniqueness, empathy towards its culture, and strategic acumen that marries global visions with local insights. It’s about playing a long-term game where the rules are continuously evolving.

Is the Chinese market worth the effort? Unequivocally, yes. The brands that have tasted success here have not just expanded their reach; they have enriched their global identity by intertwining with a civilization that’s as ancient as it is futuristic.

In this labyrinth of opportunities and challenges, the role of a seasoned navigator becomes paramount. Kadence International, with its blend of local expertise and global perspectives, offers a compass to brands aiming to explore the Chinese market. Our research, insights, and strategic guidance have been the wind beneath the wings of brands that have soared in China. Are you ready to embark on this journey? Connect with us at Kadence International, and let’s write your success story in the world’s most fascinating marketplace.

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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.

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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.

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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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When the US home improvement retailer Home Depot attempted to enter the Japanese market in the 1990s, it failed to gain traction due to intense competition from local retailers and cultural differences. And when UK supermarket giant Tesco attempted to enter the Japanese market in 2003, it failed to gain a foothold and eventually withdrew from the market in 2011.

These examples demonstrate that foreign brands must understand the local market and consumer preferences to be successful in Japan. Brands must also be willing to make the necessary adaptations and investments to succeed in this highly competitive market.

Japanese consumers have unique cultural and societal influences that differentiate them from consumers in Western countries like the United States and the United Kingdom. 

Brands looking to succeed in the Japanese market should consider these differences when developing their marketing and product strategies. Here are some key differences:

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Brand loyalty: Japanese consumers are often highly loyal to specific brands and may be more likely to purchase products from established brands they trust.

Attention to detail: Japanese consumers are known for their attention to detail and appreciate well-designed and well-crafted products. They also place a premium on functionality and practicality.

Quality expectations: Japanese consumers have high expectations for quality and place a premium on well-made and durable products.

Technical sophistication: Japanese consumers are known for their technical sophistication and are often early adopters of new technology and products.

Environmentalism: Japanese consumers are increasingly environmentally conscious and may be more likely to purchase environmentally friendly products.

Retail culture: Retail culture in Japan is different from that in Western countries, with a strong emphasis on in-store experiences and customer service.

Fashion and beauty: Japanese consumers place a strong emphasis on fashion and beauty, and they are known for their unique and eclectic sense of style.

Below are eight important considerations brands should research and understand before launching their product or service into the Japanese market.

1. Cultural sensitivity: Understanding Japanese cultural norms and customs is crucial for a successful product launch.

Cultural sensitivity is an important consideration for brands looking to bring a product into Japan, as cultural norms and values play a significant role in shaping consumer behaviour. 

Brands should take the time to understand the local culture and customs and tailor their offerings accordingly.

Here are some key points to consider when it comes to cultural sensitivity in the Japanese market:

  • Respect for tradition: Japan has a rich cultural heritage and tradition, and brands should respect and be mindful of these cultural values.
  • Attention to detail: Japanese consumers have high expectations for detail and quality in products, packaging, and marketing materials. Brands should ensure that their offerings meet these expectations.
  • Honorific language: In Japan, it is important to use appropriate honorific language when communicating with consumers, especially in advertising and marketing materials.
  • Social customs: Understanding and respecting social customs, such as gift-giving, is important in building relationships with customers.
  • Sensitivity to local customs: Brands should be sensitive to local customs, such as the preference for modesty in dress and advertising, and avoid causing offense.

2. Local regulations: Familiarising with the local laws and regulations regarding product labelling, packaging, and marketing materials.

Local regulations are important for brands looking to bring a product into Japan as they impact product labelling, packaging, and marketing materials. 

Brands must comply with local regulations when bringing a product into Japan. This helps avoid legal and financial issues and ensures that the product is well received by the market.

Here are some key points to consider when it comes to local regulations in the Japanese market:

  • Product labelling: Labeling requirements in Japan are stringent, and brands should ensure that their products meet all the required regulations, including health and safety standards, labelling information, and warnings.
  • Packaging regulations: Packaging regulations in Japan are also strict, and brands should ensure that their packaging is compliant with local standards and regulations.
  • Marketing materials: Marketing materials such as advertisements and promotional materials should also comply with local regulations, including guidelines on product claims, testimonials, and endorsements.
  • Import restrictions: Brands should also be aware of import restrictions on certain products, including food, pharmaceuticals, and chemicals.
  • Environmental regulations: Japan has strict environmental regulations, and brands should ensure that their products and manufacturing processes meet these standards.

3. Distribution channels: Identifying and partnering with the right distribution channels in Japan is crucial.

Identifying and partnering with the right distribution channels is crucial for brands looking to bring a product into Japan as it affects the reach and success of the product in the market. 

Choosing the proper distribution channels is critical to the success of a product in the Japanese market. Brands should carefully consider their options and build strong relationships with their distribution partners to ensure the product reaches the right customers.

Here are some key points to consider when it comes to distribution channels in the Japanese market:

  • Retail landscape: Japan has a complex retail landscape, with a mix of large chain stores, speciality stores, and online retailers. Brands should understand the different channels and choose the most suitable ones for their product.
  • Wholesale vs. Direct Sales: Brands should consider selling their products directly to consumers or through a wholesale distribution channel. Direct sales may offer more control over pricing and product positioning, but wholesale distribution can provide a wider reach and lower costs.
  • Importance of relationships: In Japan, relationships play a crucial role in business, and brands should take the time to build strong relationships with distribution partners.
  • E-commerce: Online retail is becoming increasingly important in Japan, and brands should consider an e-commerce strategy as part of their distribution plan.

4. Consumer behaviour: Understanding Japanese consumers’ unique buying habits and preferences can help a brand tailor its offerings accordingly.

Understanding consumer behaviour is crucial for brands looking to bring a product into Japan, as it can impact product positioning, marketing, and sales. 

Brands should research consumer preferences, trends, and buying habits to ensure that their product offerings resonate with the local market.

Here are some key points to consider when it comes to consumer behaviour in the Japanese market:

  • Brand loyalty: Japanese consumers tend to be highly loyal to brands and often make purchasing decisions based on brand reputation and quality.
  • Quality over price: Japanese consumers place a high value on quality and are often willing to pay a premium for products that meet their expectations.
  • Attention to detail: Japanese consumers are known for their attention to detail, and they appreciate well-designed and well-made products.
  • Health and wellness: Health and wellness are important concerns for Japanese consumers, and brands should consider these needs when developing their products.
  • Trends: Keep up-to-date with the latest consumer trends in Japan, as they can change quickly and impact consumer preferences.
  • Advertising: Advertising and marketing strategies should be tailored to meet the needs and preferences of Japanese consumers.

5. Language: Communication in the local language is key, and translated materials should be culturally appropriate and high-quality.

Language is an important consideration for brands looking to bring a product into Japan as it impacts product labelling, packaging, marketing, and customer service. 

Brands should ensure that they communicate effectively with customers, use the appropriate language, and adapt their products to meet local preferences. This can build trust and credibility with Japanese consumers and ensure a successful product launch.

Here are some key points to consider when it comes to language in the Japanese market:

  • Official language: Japanese is the official language of Japan and is widely spoken by the population. Brands should ensure that their product labelling, packaging, and marketing materials are translated accurately into Japanese.
  • Localisation: Brands should also consider localisation, which means adapting the product to meet the cultural and linguistic norms of the local market. This can include changing product names, packaging design, and marketing materials to reflect local preferences.
  • Customer service: Brands should ensure that they have a customer service team that can communicate effectively with Japanese customers in their language.
  • Language skills: Brands should invest in language training for employees working in the Japanese market to ensure effective communication and a smooth transition.

6. Product adaptions: Packaging size, product specifications, and ingredients may need to be adapted for the Japanese market.

Product adaptation is the process of modifying a product to meet the specific needs and preferences of a local market and is an important consideration for brands looking to bring a product into Japan. 

Brands should take the time to understand local consumer preferences and requirements and make the necessary adaptations to ensure that their products meet local needs and regulations. This can build trust and credibility with Japanese consumers and increase their chances of success in the market.

Here are some key points to consider when it comes to product adaptation in the Japanese market:

  • Cultural differences: Brands should be mindful of cultural differences in Japan and how they may impact product design and features. For example, products may need to be modified to fit smaller living spaces or meet local safety regulations.
  • Consumer preferences: Brands should conduct market research to understand local consumer preferences and make necessary product adaptions to meet their needs. For example, local consumers may prefer different colours, sizes, or materials.
  • Technical requirements: Brands should ensure that their products meet the technical requirements in Japan, including certifications and regulatory approvals.
  • Local suppliers: Brands may need to source local suppliers for raw materials or components to ensure that the product is manufactured in compliance with local regulations.
  • After-sales support: Brands should also consider after-sales support when making product adaptations, as local consumers may have different expectations for customer service and repair services.

7. Quality expectations: Japanese consumers have high expectations for product quality, so brands need to ensure that their offerings meet these expectations.

Quality expectations are critical for brands looking to bring a product into Japan, as they can significantly impact product success. 

Brands should ensure that their products meet Japanese consumers’ high standards, focus on building a positive brand image, and provide excellent after-sales support to meet customer needs. This can help to build trust and credibility with Japanese consumers and increase their chances of success in the market.

Here are some key points to consider when it comes to quality expectations in the Japanese market:

  • High standards: Japanese consumers have a high expectation for quality, and they place a premium on products that are well-made and durable. Brands should ensure that their products meet these quality standards to succeed in the market.
  • Attention to detail: Japanese consumers are known for their attention to detail, and they appreciate well-designed and well-crafted products. Brands should focus on ensuring that their products are of the highest quality, emphasizing attention to detail.
  • Brand reputation: Quality expectations are closely tied to brand reputation in Japan, and consumers will often make purchasing decisions based on a brand’s reputation for quality. Brands should focus on building a positive brand image to increase their chances of success in the market.
  • After-sales support: Quality expectations also extend to after-sales support, and Japanese consumers expect that their products will be repaired or replaced if they fail. Brands should have a robust after-sales support system to meet these expectations.

8. Marketing strategies: Developing a marketing strategy that resonates with Japanese consumers is important, including considering local social media and influencer marketing.

Marketing strategies are an important consideration for brands looking to bring a product into Japan, as they can significantly impact product success. 

Brands should take the time to understand local consumer behaviour and cultural differences and tailor their marketing strategies accordingly. This can help to build brand awareness and reach the right target audience, increasing the chances of success in the market.

Here are some key points to consider when it comes to marketing strategies in the Japanese market:

  • Cultural differences: Brands should be mindful of cultural differences in Japan and tailor their marketing strategies accordingly. For example, marketing materials may need to be modified to reflect local preferences and cultural norms.
  • Consumer behaviour: Brands should conduct market research to understand local consumer behaviour, including purchasing habits and preferred marketing channels. This information can be used to inform the development of a targeted marketing strategy.
  • Local media: Brands should consider using local media, such as television, newspapers, and magazines, to reach their target audience in Japan.
  • Digital marketing: Digital marketing is becoming increasingly important in Japan, and brands should consider using digital channels, such as social media, email marketing, and search engine optimization (SEO), to reach their target audience.
  • Influencer marketing: Influencer marketing is also becoming popular in Japan, and brands may consider partnering with local influencers to reach their target audience.

Market research can help companies and their brands understand the unique business landscape in Japan. For more information on how to develop a successful market entry strategy for Japan, read our blog, How to Develop a Market Entry Strategy in Japan

If you are interested in Kadence’s market research capabilities in Japan, download our agency credentials document here or submit a Request for Proposal here.

Located in the heart of mainland Southeast Asia, Thailand —officially called The Kingdom of Thailand —and formerly known as Siam, shares its borders with Liam and Combodia in the east, the Gulf of Thailand and Malaysia in the south, the Andaman Sea and Myanmar in the west; and Laos and Myanmar in the north.

The country is positioned for international market entry geographically and economically. Thailand ranks 21st out of 190 countries in the Word Bank’s 2020 Ease of Doing Business report and ranked number three according to the U.S. News & World Report on the best countries to start a business in 2022. This U.S. news and world report rankings are derived from a global survey of more than 17,000 people. They are based on respondents’ association of various countries with five particular attributes: affordable, bureaucratic, cheap manufacturing costs, connected to the rest of the world and providing easy access to capital.

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A Business-friendly economy

Thailand has a population of 69 million people with business-friendly policies and a growing economy. 

Thailand is well-known globally for stable economic growth, friendly international business relations, excellent incentives for foreign corporations, and a cost-effective local workforce. Owing to its proximity to some of the fastest-growing economies, like China and India, the country offers several lucrative trade opportunities with these two countries and many Asian nations. 

The standard corporate tax rate in Thailand is 20 percent —however, for companies and partnerships where paid-in capital is less than THB 5 million and income of less than THB 30 million, the first THB 300,000 in net profit is tax-free. The THB 300,000 to 3 million net profit is subject to 15 percent corporate tax. Any net profit over THB 3 million is subject to 20 percent corporate tax.

While foreigners generally can own no more than 49 percent of the shares in a Thai company, there are specific sectors where the government allows foreign companies to hold a more significant portion of the business.

Setting up a company in Thailand

Depending on your business activities, setting up a business in Thailand may require acquiring a license or permit. Certain business activities are more regulated by the Thai government, such as tourism, school, childcare, liquor, medical, and food and beverage industries. Setting up a company in these industries can be lengthy and complex. It is always a good idea to find a legal firm in Thailand to help with setting up a company in Thailand. 

Thailand is particularly suitable for manufacturing sectors. Foreign automobile brands, such as the Japan-based Toyota, Honda and Nissan and U.S.-based Ford Motors, have set up manufacturing plants in the country. These automobile brands have established their production base for exports to neighbouring countries and the rest of the world. Nissan manufactures under the Siam Motors Nissan Company, and Isuzu has two plants making pick-up trucks in Thailand. These companies have set up their export operations in Thailand. Many other brands, like the U.K.-based Marks and Spencer and Bodyshop, have also expanded into Thailand due to the lucrative market and lower start-up costs it offers, along with sound trade policies and the country’s strategic location providing access to other Asian countries. 

Many new entrants enjoy access to the Greater Mekong sub-region, where emerging markets offer the tremendous prospect of setting up a company in Thailand.

Most recently, according to the Global COVID-19 Index (GCI) report, Thailand was ranked number one in the world among countries with the highest COVID-19 recovery rate.  

What do Thai consumers want from brands?

Consumers in Thailand are price-conscious and show a preference for local brands and low-priced imported goods from the west. There is a market for brands bringing in higher-priced items, but they need a different market strategy and should work with a local partner. 

About half of Thailand’s Most-Favored-Nation (MFN) tariff schedule comprises less than five percent of duties, and nearly 30 percent of tariff lines are free. In 2020, Thailand’s average MFN applied tariff rate was 10.2 percent. However, the tariff was significantly higher for agricultural products at 29.3 percent.

Like most other foreign markets, doing business in Thailand has its share of challenges, although when you look at the big picture, these are minuscule. One crucial challenge is the language barrier. While most middle and top management can communicate fluently in English, lower-tier workers are more likely comfortable speaking Thai. 

Many Thai retailers digitised their stores to enable online shopping using data analytics to understand better the latest trends and the shift in consumer behaviour. 

The digitisation began before the pandemic but accelerated during the lockdown as it imposed restrictions in 2020. This, along with increased internet and mobile phone use, improved logistics and online payment systems, resulted in spikes in B2C and B2B eCommerce. 

According to reports, revenue in Thailand’s eCommerce market is expected to show a Compound Annual Growth Rate (CAGR 2022-2027) of 14.99 percent, resulting in a projected market volume of USD 38.72 billion by 2027.

Rising smartphone penetration (about 40 percent) has led to the growth of M-commerce —online shopping using a smartphone. The mobile commerce market is expected to grow at a CAGR of 12 percent to reach USD 25 billion by 2023. 

The Thai government’s Thailand 4.0 policy aims at allocating a specific budget for constructing a broadband network in rural areas to help bridge the digital divide, giving an impetus to the already flourishing eCommerce market. 

According to JP Morgan, using debit or credit cards is still a popular method of e-commerce payments in Thailand, and most Thai people prefer debit over credit. While cash on delivery is widely available on Thai e-commerce platforms, it is on its way to declining. 

International or cross-border e-commerce comprises almost 30 percent of the overall e-commerce market in the country. The top five e-commerce platforms are Shopee, Lazada, Kaidee, AliExpress, and Amazon. 

Want to expand to Thailand? We are consistently recognized as one of the top market research agencies globally. To learn more, go to https://kadence.com/en-us/office/thailand/ and download our agency credentials.

Indonesia is the largest economy in Southeast Asia and the third-largest democracy in the world, offering opportunities in almost every sector of the economy. With rising disposable incomes, the country’s 261 million people make it the fourth most populous country in the world. Indonesia is the seventh-largest economy by purchasing power, and a leader in ASEAN, with a growing middle class, showing an increased interest in products and services imported from abroad.

As the world’s largest Muslim-majority nation, Indonesia is culturally diverse. It has more ethnic populations, languages, and cultures than other countries. It has several ethnic groups, including Javanese, Sundanese, and others, with more than 700 recognised regional languages.

Indonesia has an important place in the world’s economy as the 24th largest goods trading partner. Goods exports totalled USD 7.4 billion, and goods imports totalled USD 20.2 billion.

The Indonesian government’s policy, abundant natural resources, and young labour force have shaped the country’s economic performance.

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Indonesia is the largest economy in Southeast Asia and the third-largest democracy in the world, offering opportunities in almost every sector of the economy. With rising disposable incomes, the country’s 261 million people make it the fourth most populous country in the world. Indonesia is the seventh-largest economy by purchasing power, and a leader in ASEAN, with a growing middle class, showing an increased interest in products and services imported from abroad. 

As the world’s third-largest Muslim-majority nation, Indonesia is culturally diverse. It has more ethnic populations, languages, and cultures than other countries. It has several ethnic groups, including Javanese, Sundanese, and others, with more than 700 recognised regional languages. 

Indonesia has an important place in the world’s economy as the 24th largest goods trading partner. Goods exports totalled USD 7.4 billion, and goods imports totalled USD 20.2 billion. 

The Indonesian government’s policy, abundant natural resources, and young labour force have shaped the country’s economic performance. 

The country has also been increasingly open to international trade openness over the past half-century.

For foreign companies selling directly to the government and state-owned companies, it is critical to utilise the services of local agents or distributors. At times, companies are required to use their services by law. 

In 2021, the country’s President officially launched the Online Single Submission (OSS) System, a web-based platform for issuing business licenses to facilitate micro to large entrepreneurs. The goal was to adjust the business licensing process to the level of risk and improve the ease of doing business in Indonesia. 

The government said they would continue to cut regulations that potentially hamper business and investment licensing and called for transparency between government officials and entrepreneurs for obtaining business permits. They also put memorandums in place to increase investment and national revenue and ease the flow of investment into the country. 

For foreign companies entering the country, Indonesia is a lucrative market, and these companies need to understand Indonesian culture and local consumer preferences. 

Essential factors affecting purchase decisions in Indonesia are pricing, financing, technical skills, and after-sales service. Brands entering the market should invest in training their local staff for varying levels of seniority within the company. 

Market Opportunities in Indonesia

The Indonesian consumer has been ranked the most confident in the world, and it’s a young nation with nearly 43 percent of Indonesia’s 277 million citizens under 25 years old. 

Consumer-related market opportunities continue to lead expansion in the world’s fourth-most populated country, and growth in the retail, health, education, telecom, and financial services sectors has been booming.

Indonesia’s aviation market is the second-fastest growing in the world, and a competitive and expanding banking market offers significant opportunities for IT and banking equipment, software, and technology providers. There are opportunities for telecommunication infrastructure and aircraft replacement parts and services. Telecommunications equipment, services, and satellites remain excellent areas for products and services from western markets with a relative technological advantage.

Indonesia’s under-developed public infrastructure presents opportunities in aviation, rail, ports, land transport and public utilities infrastructure projects such as water supply, wastewater systems, and waste management establishments. Emerging opportunities include palm oil, biofuel processing, clean energy, energy efficiency, and technology to improve local production capacity, dams, and waste-to-energy projects. There are opportunities for U.S. defense manufacturers to sell a range of military aircraft, vehicles, communications systems, spare parts, and maintenance services.

Education and professional training, medical equipment, and high-quality U.S. agricultural commodities maintain their edge even with higher prices.

Challenges of doing business in Indonesia

Significant challenges revolve around labour relations, intellectual property protection, and transparent rules in setting and implementing standards and certification. The Government of Indonesia has introduced plans to reduce the bureaucratic red tape to facilitate investment.

Protecting intellectual property is a crucial concern for foreign brands in Indonesia. However, in a positive development, Indonesia established a new Intellectual Property Enforcement Task Force to improve IP enforcement coordination. 

Foreign companies entering Indonesia should be mindful of additional requirements for testing and certification imposed on a range of products. 

Another issue many exporters that target public tenders find is an opaque pricing environment and local content requirements. 

Manufacturers selling goods or services through e-commerce platforms with a significant presence in the country are assessed a 10 percent value-added tax on all transactions in Indonesia. A “significant presence” is determined based on gross sales or the number of customer transactions.

Significant challenges of doing business in Indonesia are:

  • Bureaucratic inefficiency
  • Delays in land acquisition for infrastructure projects
  • Weak enforcement of contracts
  • Delays in receiving refunds for advance corporate tax overpayments

The energy and mining sectors still face significant foreign investment barriers, and all sectors need more effective IP protection and enforcement.

Despite some of these challenges, Indonesia continues to attract substantial foreign investment. According to the 2020 IMF Coordinated Direct Investment Survey, the top foreign investment sources for the country came from Singapore, the United States, the Netherlands, Japan, and China.

Private consumption drives the largest economy in ASEAN, making Indonesia a favourable destination for a wide range of brands and industries. 

Want to take your brand to Indonesia? We are consistently recognised as one of the top market research agencies globally. To learn more, go to https://kadence.com/en-us/office/indonesia/ and download our agency credentials.

The Philippines is an archipelago in the western Pacific Ocean, consisting of around 7,641 islands. The country shares maritime borders with Taiwan to the north, Japan to the northeast, Palau to the east and southeast, Indonesia to the south, Malaysia to the southwest, Vietnam to the west, and China to the northwest. Its proximity to major Asian cities offers it a strategic point of entry into the ASEAN market and a gateway to international shipping for European and American companies. 

Economic development and Foreign Direct Investment

The Philippines is liberalising foreign investment laws to enable international companies to invest in the country’s robust economy and leverage its highly skilled labour market.

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The country’s economy grew by 5.7 percent in 2021, surpassing the government’s 5-5.5 percent target range, bringing the Philippines closer to its pre-pandemic 6.6 percent GDP from 2012-2019. 

The Philippines’ gross national income per capita was estimated at around USD 3,500 in 2021, below the World Bank’s upper middle-income range of $4,096 to $12,695.

According to reports, Philippine officials expect the country to achieve an upper middle-income status by 2023. 

Ease of restrictions increased consumption and improved employment. 

Net foreign direct investment (FDI) inflows rebounded after declining for three consecutive years and rose by 54 percent year-on-year to USD 10.5 billion in 2021. The U.S. is among the top investors in the Philippines. 

The top two import sources of the Philippines are China and Japan, with 22.7 percent and 9.4 percent import shares, respectively. The United States is the largest export market of the Philippines, with 15.9 percent of the total export value in 2021. It was followed by China, a very close second, which accounted for 15.5 percent.  

The Philippines has been named one of the most lucrative markets for foreign direct investment (FDI). 

With the twelfth largest population in the world, Filipinos are substantial consumers. Consumer spending in the Philippines reached its all-time high in the fourth quarter of 2018, and spending is predicted to keep increasing. The country has been named the 43rd biggest economy in the world and is a land of promise for domestic and international brands to invest.

A skilled workforce that is fluent in English 

The Philippines is known for its high proficiency in English and occupies the second spot for English proficiency in Asia. It ranked 18 out of 99 countries analyzed in the Index as of 2020. 

This is a great advantage for international companies entering the market and using local labour. 

The Philippines is considered a lucrative host for Foreign Direct Investment. Between 2016 and 2022, the Philippines Central Bank data showed that firms from China and Hong Kong invested USD 1.7 billion in the Philippines, trailing only Japan at USD 2.8 billion but ahead of the USA (USD 1.3 billion). 

The country is developing at a healthy growth rate and presents an immense opportunity for entrepreneurs, investors, and Filipino employees.

Many investment opportunities are available for entering the Philippines market, and now may be the best time for foreign brands to explore this emerging market. 

Some of the most lucrative industries for FDI in the Philippines include agriculture, manufacturing, tourism, business process outsourcing, energy, and infrastructure development.

There are various entry modes to choose from when investing in the Philippines. Companies entering the country can choose the most suitable one based on their business model and the laws governing each structure. 

1. Corporations 

A foreign company can establish itself as a corporation by registering a new legal entity with the Securities and Exchange Commission (SEC). In this structure, the owner’s individual assets are separate from the company’s. Corporations can be formed in two ways, a Filipino corporation with a minimum of 60 percent Filipino equity ownership or a foreign-owned domestic corporation with a foreign equity ownership greater than 40 percent. There are important distinctions between the two concerning land ownership and tax-incentive programs. Foreign-owned domestic corporations face the exact tax requirements as local corporations.

The process of setting up a corporation may be a complex one taking an average of 28 days. 

2. Branch Office

A branch office is a subsidiary of a foreign company that engages in the activities of its parent company in the Philippines. This is a profit-oriented structure used for business process outsourcing, such as call centres or back offices for multinational firms in the Philippines. These firms are popular in the Philippines due to low wages and many fluent English speakers. Setting up a branch office typically takes three to four weeks from the time of filing with the SEC.

3. Representative Office

A representative office is a liaison between the parent company and clients or partners in the Philippines and is not legally allowed to derive income. On average, setting up a representative office takes about three to four weeks from the date of application.

4. Regional H.Q.

Regional or Area Headquarters (RHQ) and Regional Operating Headquarters (ROHQ) are two types of regional headquarters. 

RHQs are non-income generating offices of a foreign enterprise, while ROHQ is an office of a multinational commonly used for back-office operations. The primary purpose of RHQs is to be a communication centre for subsidiaries, affiliates, and branches in the Asia Pacific region. 

The good news is that growth is seen in Manila’s metro city and other smaller provinces. The country’s improved infrastructure and growing population of consumers are attracting investments, both domestic and foreign, and creating better job opportunities. 

The Philippines’ economy is poised for growth, and the investment market is rife with opportunities, which makes it an excellent time to enter the country. 

Kadence International helps leading brands make game-changing decisions. From our base in Manila, we can conduct market research across the country. This means we can also be fieldwork partners, helping organisations reach respondents across the Philippines. Also, learn more about how to conduct market research in the Philippines.

If you are looking for a research partner to help better understand your customers, we would love to help. Fill out our Request for a Proposal here.

India is a diverse country having 29 States and seven Union Territories covering more than 600 districts, roughly 8,000 towns, and more than 0.6 million villages. The villages are spread over 3.2 million square kilometres supporting 65% of India’s total population. There is vast heterogeneity in population characteristics due to socio-cultural factors, caste-based divisions, and religious and linguistic diversity. 

Specifically, in the Indian context, ensuring data capturing, and research methodologies are amenable to different languages, literacy levels, and differentiated access/familiarity with the internet is critical. 

For the above reasons, research and data collection become a challenging task and calls for a robust and representative methodology to mirror India’s diversity.

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Key Challenges in Research & Data Collection

Given India’s cultural and geographical diversity, some of the critical challenges for marketers and researchers in designing a survey for rural India are listed below:

1.   Reach: As per Census 2011, nearly 58 percent of India’s rural population resides in 115,080 villages having a population of 2000+. This effectively means that roughly 80% of the total villages in India are small or very small in size, inhabiting less than 2000 people. Looking at tapping rural markets, last mile connectivity with end consumers is a big challenge for FMCG players. Similarly, reaching the vast network of 33 million retail outlets in rural India is a challenge for companies, given the high distribution cost. Therefore, focused, and targeted reach is a priority in accessing rural markets. The survey design needs to factor in this critical consideration when designing the scope of research and sampling methodology.  

2.   Commercial Viability: It is estimated that 85,000 large villages in India account for 40% of the total population and 60 percent of the total consumption of FMCG categories. The skewness in demographic profile and purchasing power further limits the scope to cover the whole of Rural India for reasons of commercial viability. 

3.   High degree of heterogeneity: “A one size fits all approach” does not work well when designing a survey or methodology for rural India. For example, poor and backward States like Bihar, Uttar Pradesh, West Bengal, and Madhya Pradesh have more than 75-80% of their total population living in rural areas, whereas urbanized States like Tamil Nadu, Maharashtra, and Telangana and more equitable in terms of distribution. Therefore, each State has its unique demographic and socio-cultural profile, which must be kept in mind while designing the sampling methodology in any primary research survey. 

4. Gender Inclusivity: Females are vital consumers and influencers of product categories in Rural India, but men are likely to be key purchasers. Therefore, “whom to interview” becomes a pivotal question to answer while designing a survey. 

5.   Linguistic Diversity: India has 22 official languages besides numerous local languages, dialects, and colloquial words. Therefore, linguistic compatibility becomes essential for survey administration in Rural India. 

 Methodologies for Rural Research 

Some factors merit consideration while designing a methodology representative of the diversity of Rural India and are listed below:

  1. Regional Representation
  2. Adequacy of Sample Size
  3. Defining “Rural” and therefore a selection of villages 
  4. Other Imperatives

1.   Regional Representation 

In a vast and diverse country like India, robustly researching rural consumers requires reflecting heterogeneity and ensuring representativeness. For example, people in the North have attitudes and behaviours that are distinctly different from the population in the South. Similarly, other regions also have socio-cultural nuances that often colour their opinions and attitudes, especially on sensitive issues. 

Therefore, selecting Socio-Cultural Regions or SCR-s is often the starting point to decoding rural consumer behaviour. The regions make it easier to contextualize people and their behaviour for prevalent agrarian practices, social and cultural nuances, and crop-season-driven income and consumption patterns. 

2.   Adequacy of Sample 

The population spread for different States in India varies a lot. For example, the most populous State, Uttar Pradesh, accounts for almost 15% of India’s population. On the other hand, the tiny State of Goa accounts for less than 0.5% of India’s population. Therefore, in a pan-India or multi-State survey, stratification of a sample by State becomes essential. Generally, States are categorized into different population bands such as high population states, medium population states, and low population states. The sample is then fixed for each band in terms of their population size to ensure adequate representativeness. 

The sample size would also depend on other factors such as the granularity of data required within a State, and heterogeneity of population characteristics within a State et al.  

3.   Defining Rural 

The Census of India defines a rural village as a settlement that has the following three characteristics:

  • A population of fewer than 5,000 people
  • <75 percent of the male population employed in non-agricultural activities and 
  • Population density of fewer than 400 people per square kilometre

However, for commercial purposes, this vast and huge area coverage is logistically challenging to cover for any marketing company. Therefore, for practicality and feasibility, different definitions of rural are followed. For most companies, the “hub and spoke model” defines rural coverage as mapped to their distribution channels. They consider villages in the immediate vicinity or within a defined radius of the feeder towns. Last mile connectivity is a challenge for most companies in Rural India. Covering interior or remote parts of rural is not considered to be a viable option. Villages at the periphery of small towns/feeder towns that can be accessed easily become the “immediate” potential for targeting Rural India. This is also called the “Ringing Method” of village selection. 

The above has a profound implication for researchers in terms of designing a suitable methodology and, more importantly, for deciding on an appropriate sampling methodology for the research.  

4.   Other Imperatives: There are a few other imperatives that one must be cognizant of while designing rural research methodologies: 

o  Permissions: Before any fieldwork in villages starts, it is crucial to approach the village head called the “Sarpanch” to apprise them of the survey and its objectives and take approval to conduct fieldwork. This is a formal authorization from the village head that they have been informed about the study and grant their formal permission. 

o   Village Map: You are required to draw a rough map of the village before the start of fieldwork to understand the village’s layout and the critical physical structures —like the hospital, school, panchayat office, temple, or any other place of worship. The team supervisor generally does this exercise with the help of a local person from the village, such as the sarpanch/ schoolteacher or any other elderly person. As the rural dwellings/ households in a village are not structured or follow a pattern (unlike the urban dwellings), the maps also help sample and select clusters/households in that village. 

o   Use of colloquial terms: Given the linguistic diversity of Indian States, specific phrases or words have colloquial interpretations. Therefore, for ease of understanding and comprehension of questions by the respondents, it is generally recommended that local phraseology is inserted into the instrument basis inputs from an informed local person such as the schoolteacher. 

With the focus of multinational companies and marketers now shifting to rural consumers, rural market research in India will likely increase spending in the near future. It augurs well for market research companies to actualize this opportunity to sharpen their research methodologies with rural consumers in mind. At the same time, researchers should be mindful of some of the challenges of rural research, such as low literacy levels, low tech savviness, poor connectivity, and a heterogeneous population, while designing research methodologies for this group. 

Kadence International helps leading brands make game-changing decisions. If you are looking for a research partner to help better understand your customers, we would love to help. Simply fill out our Request for a Proposal here.

From one of the world’s poorest and most isolated nations, Vietnam has emerged as a force to reckon with for international investors. Now a middle-income country with a young population, Vietnam provides a wealth of opportunities for brands entering the country.

Owing to a rising middle class and a boost in manufacturing and exports, an increasing number of brands are eager to make an entry into Vietnam. 

It was announced yesterday that Apple is in the process of relocating Apple Watch and Mac production to Vietnam as part of a broader push to diversify its supply chain.

In recent years, Vietnam has shown immense resilience. At the peak of the pandemic in 2020,  when most other countries were derailed economically, Vietnam was one of the few countries to post GDP growth. In 2021, the country had a rough year, but the economy is expected to rebound to 5.5 percent in 2022.

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The government provides various incentives to attract international companies looking to establish local production and distribution of their products. 

This rapid growth and a consumer-driven modern lifestyle have set the stage for foreign investment. There have been shifts in consumer spending and behaviours, and an understanding of these changes and the cultural nuances of the local population are critical to successful market entry in Vietnam. 

So how can international investors and brands tap into this lucrative market?

Brands can conduct thorough market research to understand the market, culture, consumer behaviour, and economic and socio-political conditions to map out a successful market entry roadmap and strategy. 

Setting up and registering a company in Vietnam.

Setting up a company in Vietnam is a straightforward process, but knowing the options available and the specific guidelines and rules for foreign organizations is critical to success. The two most common forms of foreign-owned companies or legal entities are a Limited Liability Company (LLC) and a Join-stock Company (JSC).

Vietnam is easy to enter and carry out business in as it also offers 100 percent ownership of a company in most industries. Industries that have restrictions on foreign ownership require companies to enter into a joint venture with a local Vietnamese company.

As long as the business covers the expenses and can sustain itself, there are no minimum capital requirements for investing in most businesses and industries. All companies in Vietnam need a physical office address and at least one resident director with a local residential address. 

In some cases, you don’t need to set up a company in Vietnam as there are alternative ways, such as having a representative office or having an employer of record —a third-party service provider that recruits and manages employees on behalf of your company. 

Vietnam’s stable political climate and socio-economic conditions

A country’s political climate is an important consideration when weighing the opportunities and challenges of entering an international market. 

Vietnam is a unitary single-party state, which means there is only one political party; and the formation of other political parties is forbidden. This makes the political environment stable. 

Political stability is one of the most critical considerations in entering a new market. Protests and civil unrest are rare, with occasional demonstrations.

On the 2022 economic freedom index, with a financial freedom score is 60, and out of 39 countries, Vietnam is ranked 18th in the Asia Pacific region.

Hiring in Vietnam

Another important aspect of setting up a company in an international market is understanding the labour market —its laws, guidelines, and policies. 

Vietnam provides a labour force at a relatively lower cost. The Mekong Region, which includes Laos, Thailand, Myanmar, Cambodia, and some Chinese provinces provides, puts foreign brands in front of a vast, affluent population. 

Organizations that ensure equity and fair compensation and benefits attract high-quality talent. Brands should understand legal compliance and H.R. policies and even partner with local H.R. consultants to handle hiring, payroll, and other such functions. 

The role of Foreign Direct Investment in the growth of Vietnam

Foreign direct investment has played a pivotal role in transforming Vietnam from one of the poorest countries in East Asia to one of the fastest growing with a rising middle class. Vietnam’s massive untapped potential, a relatively cheap workforce, and abundant natural resources draw foreign investors to the country. 

The government’s strategy is to attract high-tech companies to the country, with a focus on four primary sectors, namely, manufacturing, agriculture, travel, and services. 

Furthermore, the government’s efforts to boost trade and investment through free-trade agreements make Vietnam an attractive market for foreign investors. 

Challenges and competition from other ASEAN countries

Second, only to Singapore, Vietnam was the most attractive destination for foreign investors among ASEAN nations in 2016 —a significant uptick in its rankings in World Bank’s 2018 “Ease of Doing Business” report from 82 to 68 out of 190 from just one year ago. 

Vietnam lags behind Singapore in most aspects, reflecting the need for more progress to become the region’s most attractive foreign investment destination. 

Some other risks associated with doing business in Vietnam include a weak banking sector and the boom in private sector investments.

The economy is poised to grow at a faster pace next year. According to a World Bank economic update from August 2022, Vietnam’s economic recovery sped up over the last six months. The strong rebound in services and manufacturing is driving this growth. GDP growth is forecast to surge from an estimated 2.6 percent in 2021 to 7.5 percent in 2022, which is even better news for International brands that have an eye on the ASEAN market. 

The phrase “Never judge a book by its cover” does not apply to product packaging design. When package design is the only reference a consumer has, he is bound to go for the most appealing option. Years of market research have established that what’s outside the package is as important as what’s inside it. How else will a product stand out in a sea of competing brands? Yes, brand loyalty, ingredients, and other factors can make a difference, but in the end, most of it comes down to consumer psychology. 

In a store, the package design is the gateway to the product. Successful brands use psychology in their product design and packaging, driving sales and brand loyalty. Consumers often perceive a product’s function and worth based on its packaging and design.

Product packaging is primarily dictated by the target audience and what they want. For brands targeting a younger demographic, for instance, it is essential to add personalization and brighter colours and fonts that appeal to the youth. 

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This can change when catering to the same demographic in different countries. For instance, the environmental impact of packaging is a relatively less critical purchase factor for Japanese consumers, yet 80 percent of the respondents in India factor the environmental impact of packaging into their purchase decisions.

Understanding Consumer Psychology

Any buying decision involves consumers going through several cognitive stages when looking for a product actively. Their perceptions and opinions are based on what they see during this stage. After they select and purchase a product, they continue to evaluate their decision based on the product’s performance and experience. 

When a product’s perceived value is high, consumers are less impulsive than when the value is lower. This explains why over 70 percent of supermarket purchases are not planned. Shoppers in supermarkets and grocery stores rely primarily on the instinctive cues they get from package design as they browse stores. These help them make quick judgments about the product’s quality and value and can be why they add it to their carts (or not). 

Choosing the right colours

Research shows that colour is one of the first things our brains see when they come across a brand and is often the first thing that pulls consumers in. 

Do you feel calm in a blue room, and does yellow make you anxious?

Pablo Picasso once said, “Colors like features, follow the changes of the emotions.” Colour is known to change emotions, moods, and feelings dramatically. Colours can have different meanings from culture to culture, as the idea of colour is deeply rooted in our experiences. 

Colour psychology is a hot topic in marketing, branding, and graphic design because colours play a huge role in brand perception and image. 

When selecting colours, it is imperative to look into the cultural significance of each colour. This becomes necessary for brands planning international market entry, as different cultures have different connotations and emotions attached to specific colours. For instance, while green is a colour of prosperity in many Muslim nations, it is a colour associated with illness and death in some South American cultures. 

It is also essential to consider how your brand colours align with your brand and its identity. Other considerations are whether these colours stand out in a crowded marketplace and how they would work for those who are colourblind. 

Format and materials

The format or shape of the packaging is often based on whether the package will be used or discarded. In case it’s part of the product, like a milk carton, the quality, materials, and function are important considerations. For instance, a square or rectangular base is better so it can fit in the refrigerator more efficiently, and an easy-to-pour spout enhances convenience and functionality.

Packaging design depends on many other factors as well. For instance. a luxury product needs to be packaged in a way that reflects the high price of the product. In recent years, sustainability has also become a huge factor in selecting packaging materials, and an exciting product design may encourage consumers to post the packaging or unboxing online.

Typography and labels 

Typography is the art of placing text to make the copy clear, legible, and visually attractive. It utilises font style, size, and structure to evoke feelings and emotions and convey a message. It also helps balance the graphics on a package. 

The font styles and sizes you use on your packaging play a huge role in the overall design and how consumers perceive your brand. The logo, typography, and fonts allow your brand to stand out from the competition. The typography helps catch your target audience’s attention and conveys the brand’s messaging. It also helps establish consistency, a vital aspect of brand identity. 

For a successful packaging design that quickly moves the product off the shelves, brands need to know their target audience and stay abreast with the latest trends. The typesetting, fonts, and styles you use, just like the graphic and colour choices, are based on your target market —factors such as age, gender, language, culture, and preferences influence the typography of a product’s package design. 

By providing invaluable information regarding current market trends and the unique wants and needs of a brand’s consumer base, market research helps a brand develop its business and marketing strategy. Market research benefits many different facets of business, including product design and packaging. 

Brands need to have complete knowledge of consumer desires and the effect of specific product packaging on purchasing patterns and preferences. In market research, there are many different means for gathering this data, each with its own set of advantages. In most cases, it is best to use a combination of methodologies to understand the effectiveness of your packaging design and labels. 

Market research allows brands to tap into the psyche of their target markets to gain a deeper understanding of how a package design impacts purchasing decisions. 

This can be done in many ways by gathering data, each method with distinct advantages. 

Some common forms of gathering data:

1. Focus groups 

Market researchers often use focus groups and show them labels and packages to gauge their first reactions to the design, colours, typography, offers, and form. The focus group participants sample the product and look at the packaging and label to provide insights into what part of the packaging would influence their purchase decision. 

2. Interviews and discussions

Many brands conduct interviews with consumers as they browse competing products in a store setting. Questions like, “what made you add a product to your cart?” can uncover purchase decisions and the effectiveness of your product packaging. You may also interview employees from different departments who know the product well.

3. Surveys

Online surveys are a quick and easy way to conduct a survey. These can be carried out for in-store and online purchases on eCommerce sites and allow for anonymity, providing information and insights into purchase decisions and behaviour. A well-designed survey employs a rating scale and asks open-ended questions. 

4. Observation 

Market researchers often use direct observation by visiting the store and observing how the products on the shelf move. In this manner, it is possible to see how the placement of items in a store affects sales. It also allows brands to look closely at the competition to see what graphics, colours, and other visual elements affect purchase decisions. How would your product look in comparison to competing brands? Does it blend in or stand out? Does it stand out in a good way? Making frequent visits to stores can provide a window of opportunity and is a powerful way to conduct market research. 

Market research provides invaluable insights into market trends, consumer psychology, and behavior. It can help formulate the right business and marketing strategy for businesses, including package design. 

Package design research is more critical now than ever. In many cases, the retail package design is the only advertisement for the brand. The brand’s packaging has a few seconds to draw consumers to the product and evoke purchase intent. 

While brands use many quantitative and tried and tested package designs, they often tend to overlook the subjective side of research, which requires qualitative research methods and tools—knowing the “why” behind purchase decisions and consumer motivations can provide the essential piece in understanding the effectiveness of a new package design or redesign. 

With a GDP of $5.15 trillion, Japan is well-positioned for international expansion and offers substantial business opportunities for brands in various industries. 

The country has dramatically bounced back from the disruption caused by the 2011 natural disasters, like the earthquake and the Tsunami.

Japanese motor vehicles and electronics are prevalent globally. It is also among the world’s largest producers of steel. 

The country is among the world’s largest exporters of motor vehicles and electronic equipment. The service sector makes up the highest percentage of the economy in terms of gross domestic product and employment.

Major Industries in Japan

Japan’s five largest companies by market capitalization are Toyota, Sony, Keyence, Recruit Holdings, and SoftBank Group. Sony’s portfolio includes a distinctly non-Japanese Hollywood movie and music business originally acquired through a merger and acquisition over 30 years ago. SoftBank, in recent years, has morphed into a massive tech fund run by foreign fund managers invested almost entirely in non-Japanese startups. Recruit’s new CEO spent ten years acquiring and growing recruitment businesses in the U.S. before his promotion earlier in 2022.

Japan is focused on manufacturing precision and technology products such as hybrid vehicles, robotics, and optical instruments.

Other industries prominent in Japan are agriculture, fishing, and tourism. 

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What makes Japan an excellent choice for international expansion

Large World economy

The third-largest economy in the world, after the United States and China, and the fourth largest importer of U.S. products, Japan is open for international business. It is also one of the world’s most literate and technically advanced nations.

Robust Consumer Economy

Japan has a robust consumer economy with a per capita income of $42,197 and is a haven for brands that want to expand internationally. Japan’s massive consumer economy, in which consumers with considerable purchasing power seek high-quality and innovative goods and services. 

Protections and Compliance

An essential member of the international trade system, Japan complies with the law, and its efforts to maintain the rule of law is one of the pillars of its foreign policy. It also provides intellectual property protection and rights. 

Easy and inexpensive to set up an office 

According to the World Bank’s “Ease of Doing Business” report, it takes about 11 days to incorporate. It costs 0.7 percent or JPY 60,000, (approximately USD 470 million), whichever is higher, and registration and seal fees. For companies that want to set up a branch office, the costs are low and procedures simple. Co-working spaces are also an option in bigger cities. 

Rapidly Aging Population

Japan is ageing fast. One in three people is estimated to be 65 years and older by 2036, conferring the title of the world’s leading “super-aged society.”



While the nation’s rapidly ageing and declining population pose risks of an economic crisis, it also presents massive opportunities. As a result of the declining population, individual income has risen, surpassing U.S. citizens.

Fewer people in Japan mean larger living spaces, more arable land capital, more disposable income, and higher quality of living. This fuels the growth in several industries, such as pharmaceuticals, healthcare, franchising, and real estate, to name a few.

Seniors in Japan are financially secure and healthy overall and big consumers of various products and services. 

Innovation and Research 

Japan reigns supreme in research as a nation with a large senior population. It has a goldmine of data on ageing, medical data, and medical assessments—these datasets are beneficial for local governments worldwide. The nation ushers innovation and technological advancement in many sectors. 

Just as countries can look up to Japan to help their ageing population and fill technological gaps, foreign brands can view this as a great time to expand and invest in such fields.

Significant obstacles to consider before entering the Japanese market

Entering the Japanese market is lucrative and full of opportunities, but it is not without many obstacles and challenges. It is noteworthy here that Japan is one of the few Asian countries that never had a western country rule over them, and this is because of Japanese are strong-willed and are rooted in tradition. 

Although tariffs are generally low, Japan has other barriers to entering the market that may hinder foreign products’ importation into the country. 

It is essential to factor in some of the most significant obstacles before entering the Japanese market. These hurdles can be measured against the brand and company goals to make the right decision and market entry plan. 

  1. Japan’s size makes it essential for brands to invest substantially, increasing risks.
  2. Japan is a highly competitive market, and domestic brands have a strong presence. Therefore, it is not easy to compete with local Japanese companies. However, thorough market research before creating the market entry plan can help brands overcome the challenge of competing with local companies.
  3. Japanese are discerning and look for value for money and high quality when making purchase decisions. Additionally, the Japanese culture and tastes are very different from the Western world. Therefore, brands have to redesign and redevelop their products and services to tailor them to local tastes and preferences in most cases. Market research and product testing methodologies can help brands create and tweak products to fit the Japanese lifestyle and culture.
  4. Japan has very little foreign investment for an advanced nation, keeping the Japanese business sector isolated. As a result, only about 3-5 percent of Japanese speak good English, which can be a barrier for some countries.
  5. Japan has a strong network of regulations, permissions, and extensive procedures as a bureaucratic country. These strict regulations keep new entrants from competing with established industries. However, these regulations are being slowly relaxed.
  6. Management and H.R. policies are very different in Japan, and organizations entering the country must consider and adapt to the management style in Japan, because failing to do so, is a recipe for disaster. 

Marketing to the Japanese consumer

Japan is a unique market, and it is crucial to understand the cultural nuances and the Japanese consumer. You cannot become a Japanese marketing expert overnight, and it is helpful to hire local advertising agencies when marketing in Japan. 

For the same reason as above, it is critical to regionalise everything. Labels on products and marketing and sales materials, digital campaigns, and the website need to be in the Japanese language.

The Pepsiman commercial is an excellent example of regionalizing a brand. When Pepsi’s Japan branch decided to create something regional for Japan, they contacted Travis Charest to create a superhero mascot to promote Pepsi. This faceless superhero managed to get a cult following in the country. They developed an action game for the Playstation and created several successful commercials using Pepsiman. 

Nike’s attempt to extend its marketing message to include social activism in Japan was met with criticism. Nike Japan released a video depicting the struggles of women athletes in Japan that faced bullying and racism, topics that are not openly discussed in the country.

Martin Roll, a business and brand adviser, says that Japanese consumers are not as vocal and will not express dissent unless they feel brands cross a red line. Therefore, it is important to have a deep understanding of the culture, the sentiment of the people, the root of homogeneity in Japan (post-Hiroshima Nagasaki, there was a focus on a homogeneous society), and how to carefully tread the delicate line. 

https://www.youtube.com/watch?v=XkFaQuhHOtw

As in any other new country, it is also essential to have a local marketing plan and calendar.

Distribution and Sales Channels in Japan

The choice of distribution channels depends upon the product. Due to space limitations, small retail stores often stock limited inventory, and wholesalers deliver smaller amounts more frequently. 

Culturally, the Japanese prefer face-to-face interactions and place a high value on building and maintaining business relationships. This distribution system is costly and increases the price of goods. The growth of big box stores and e-commerce is challenging this status quo. 

In 2021, approximately 2.25 million vending machines in Japan were beverage vending machines, selling drinks like cooled beverages or coffee. 

The primary distribution and logistics points are found in the major port cities, like Tokyo, Yokohama, Kobe, Osaka, and Fukuoka.    

Market entry strategy for Japan

Brands need to develop and maintain strong relationships with local partners to gain a foothold and succeed in the Japanese market. The local partner can act as an agent, representative, or distributor and manage a branch office or subsidiary in Japan. 

Since the business culture is unique in Japan, visiting the country several times before entering the market is good. This can help familiarise the organization with the culture and business climate. 

Japan has a stable economy and is a dream destination for foreign investment. The key to successful business entry in Japan is doing the leg work using market research to understand the culture, localise the product and messaging, and find the right partner to expand the given brand in this unique marketplace full of opportunities.