The Multifaceted Asian Consumer Market

"Overall Asia is a market in flux, with radical changes and an influx of tech and global brands. It creates a society where consumers are being pulled in different directions", said Bernd Schmitt. Not only are there distinctions between developed and emerging Asian countries, but he noted it’s also important not to generalize or stereotype Asian consumer and cultural trends. Schmitt's perspective is based on extensive experience living, working and traveling throughout Asia. He's a visiting professor at Singapore's Institute on Asian Consumer Insight (ACI) and professor at New York's Columbia Business School. He recently spoke at an event in New York about his latest book, The Changing Face of the Asian Consumer. Joining him were panelists Colin Mitchell, Ogilvy & Mather’s worldwide head of planning, and Brian Buchwald, CEO/co-founder of Bomoda, a marketplace for Chinese consumers to purchase premium global brands. The main takeaways focus on the interplay of economic, cultural, brand and market factors. Fluctuating economy: The Asian economy has experienced volatility, despite its 6.4% growth rate and its growing influence as a commerce hub, Schmitt said. "Chinese, and more broadly Asian, consumers are now the center of worldwide attention". However, China in particular has had "bumps on the road, and it may lose its allure for foreign companies as it becomes more complex to do business there." Buchwald agreed, adding, "The biggest risk for China is economic upheaval." Evolving cultural perspectives: As many elements of traditional Asian culture are waning, its consumers have been correspondingly impacted, Schmitt said. The longtime academic belief in Asian "collectivist culture" , based on strong family bonds, has given way to a more individualist society, and China's one-child government policy has reinforced this trend. Mitchell concurred that "the pressure now is to stand out and brand yourself.” Global brand market: The rise of Asia’s middle class, the prime target for mass marketing, has led to consumers upgrading the products they buy, Schmitt said. “The most popular are global brands or Asian brands that have made it to the global stage", like Samsung, he added. As for the affluent market, Buchwald said two-thirds of luxury goods purchased by Chinese consumers are bought abroad. He attributes that to the Chinese public's lack of trust in domestic-made products and a perception that products bought elsewhere are higher quality. Chinese consumers also want bragging rights of buying luxury goods in places like Paris. As a result, foreign flagship stores are used more for showrooming. Contradictory consumption patterns: Schmitt’s research and analysis points to incompatible aspects of Asian consumers. First, they're price-value conscious, looking for deals and loyalty points, but often go on shopping sprees. Second, they have a functional bent, but also seek fun and pleasure, like spa experiences. Uniqlo is a brand offering both practical and celeb-designed clothing. Third, Asian culture still has traditional buildings, food and clothing, but is rapidly modernizing. He said Singapore Airlines flight attendants' sarongs are mainly for marketing. Moving forward: “It remains to be seen how long the brand craze will last and if over time different forms of prestige can still be bought”, Mitchell said. His agency's data shows Asian countries with more mature growth are more cynical about brands, while less mature countries are more enthusiastic. Finally, as Schmitt observed, it's time to move past Asian stereotypes. "There are too many dragons and too much use of the color red and this won't work with a new generation."

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The Multifaceted Asian Consumer Market

Nancy Lazarus

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Nancy Lazarus