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Asia’s developing markets may be the most promising place for consumer product companies, but retailers are struggling to keep up with the fast pace of change. Nikhil Prasad Ojha, a partner with Bain’s Strategy practice, shares five common pitfalls companies need to avoid.
Read the Bain Brief: Turbocharging Consumer Products in Developing Asia
Read the transcript below.
NIKHIL PRASAD OJHA: In Asia's developing market, fast-moving consumer good companies are struggling to keep with the fast pace of change that's happening in the marketplace. Consumer behavior is changing rapidly and so is the retail environment. This is all in addition to the developing market fundamentals that they're anyway dealing with.
However, there is a great opportunity ahead for incumbents to rapidly adapt and grow faster than the market. And that they can do by focusing on consumer consideration and market penetration. For this, they will truly have to understand what consumers actually are doing, rather than what consumers say they will do.
To successfully turbocharge growth, brands will need to overcome five common pitfalls. Number one, underinvesting in understanding rules of the category. That's something that we have to get right, because the most important choices around where to play and how to win are dependent on how well you understand the rules of the category.
Number two, getting the brand messaging wrong. The amount of money we see being misallocated or misspent in brand messaging is really something that needs a lot of attention.
Number three, succumbing to range complexity. Too many times we've seen companies react to the complexity in the market by introducing newer and newer products. But all of that happens, even unintentionally, at the cost of not supporting your hero SKUs enough. That needs to be set right.
Number four, not doing enough at the point of sale. Visibility is something that all marketeers understand is very important at the point of sale. But if you look at the actual resource allocation to visibility, it's nowhere near what's required. Number five, failing to build the right route to market. In a fragmented retail environment, you need to tailor your strategy for different channels differently. That's not something that we see happening enough.
The most successful brands and companies are those who have avoided these pitfalls and have actually invested the right amount of money at the right places and delivered significantly higher growth in the category, even in these markets of Asia.
Read the Bain Brief: Turbocharging Consumer Products in Developing Asia