WESTERN BRANDS NEED TO WORK A LOT HARDER IN ASIA TO SURVIVE. BBC WORLD NEWS INTERVIEW WITH AKA CEO STEVE MCGINNES.
AKA CEO Steve McGinnes talks to BBC World News 4th December 2018
Western brands are working harder to engage Asian consumers - but they need to be working a lot harder as they often overestimate their importance to Asian consumers, but underestimate the importance of Asian consumers to them. Asia is vital to the survival of the major western brands - but western brands are not necessarily the major players in Asia.
This has been clearly demonstrated by the D&G fiasco, as they try to placate the Chinese retailers. Asia is more than 1/2 of D&G’s sales. Alienating this market is brand suicide for them, yet D&G isn’t in the top 10 fashion brands in Asia.
Estee Lauder created a brand specifically for Asia, and it is growing double-digit YOY.
Swarovski has more stores in Asia than the rest of the world, and a dedicated team working on and reacting to Asian consumer trends.
Levi created Denizen, a brand specifically for Asia.
Coach has been creating Asia specific lines since 2012.
40% of global art auction sales are in Asia - but interestingly more and more of the most influential artists and art players are now Asian (20 of the 100 most powerful).
Clearly, Asia consumes a lot of western brands and culture - but they consume significantly more home-grown Asian brands.
Diageo, is the worlds biggest spirits company - and saw 10% YOY growth in Asia. Johnnie Walker its flagship brand.
Johnnie walker, sells more in Thailand than in the UK! Asia is vital to the brands success.
But Johnnie walker is only the 5th biggest selling whisky in the world. The 4 larger brands are all Indian! Brands you probably can’t name.
In fact, of the top 10 biggest selling spirits brands in the world - 9 are from Asia, and sold primarily in Asia, only Smirnoff sneaks in at #6.
The worlds 5 biggest smart phone producers - 4 are Asian.
1/2 the worlds biggest car makers are Asian.
Asia is already producing and consuming more of their own brands than Western ones - now the tide is turning. The soft power push.
Recent movie release, 'The Meg’ was an American Chinese co production - With a strong sub current of Asian values. ‘Underdogs rising’ is a Philippines, Chinese, US production - A movie about E-sports. A global phenomenon which has grown up in Asia.
South Korea is open about its public ambition to be the worlds leading exporter of popular culture, and coined a term for it ‘The Korean Wave’.
The Ministry for culture has a ‘popular culture industry division’ with a $500million USD budget - and the ambition of building a $10billion USD cultural export industry. Korean brands directly benefit from this.
We are already net consumers of production from Asia, buying more than we sell. How long till we become net consumers of art, fashion, brands - the soft, and some would say, truly important metric?
And what will the Western brands be doing to defend themselves?