There's nothing like face to face for making sales in Asia
November 6, 2009
By Ralph Jennings
For hundreds of diners in Taiwan, 22-year-old Sheena Tsai is the billboard for Carlsberg, a Danish beer vying for a slice of Asia's competitive lager market.
The university student brings beer straight to tables at packed Taipei seafood restaurants with handy facts about Carlsberg's origin and flavour.
"Some don't know about it," says Tsai, who wears a beer-branded blouse to local seafood joints. "They like to meet sellers face to face. This kind of promotion is useful."
Carlsberg isn't the only one trying the strategy. As major companies see growth potential in Asia, many more are seeking a marketing strategy to suit it, giving new clout to the age-old tool of bringing products directly to consumers.
Trusted friends
Dozens of companies, ranging from consumer goods maker Hindustan Unilever to delivery firms such as Fedex, are now using direct marketing methods to sell their products in increasingly crowded and competitive markets.
Direct marketing, broadly defined, covers sales techniques from pop-up stores and commercial gift bag giveaways to free sample handouts, that put sellers directly in touch with target customers, compared with indirect marketing such as advertising, product placement or sponsorships.
Asian consumers, long accustomed to doing business with trusted family or friends to avoid scams, see contact with direct marketers as a safe avenue to get to study a product in a world of commercial uncertainty, according to experts.
"People still reply to direct mail. They want to be marketed to," says Dominic Powers, an Asia-Pacific senior vice-president with marketing firm Epsilon International. "Relationships are very strong, more so than in America, and they get things done."
Every major firm active in Asia uses both direct and indirect marketing, with the direct portion growing.
Last year direct sales in Asia increased 5 percent to $40 billion (R310bn), compared with a 0.4 percent increase in 2007, largely in expanding markets such as China and India, according to data from research firm Euromonitor International.
Big in direct marketing are alcoholic drinks such as Carlsberg and Glenmorangie Scotch whisky, Coca Cola's Glaceau Vitamin Water, delivery firms such as Fedex with address databases, and household goods sold by the likes of Amway. And there's room for more.
Bang for your buck
Consumption and savings are expected to grow throughout Asia at a rate of 4.6 percent next year, rising from 3.1 percent in 2002, according to an HSBC Global Research report.
About 48 percent of the $150.3bn spent globally on direct marketing will go to Asia by 2012, according to estimates by the Grey Group marketing communications firm.
"Companies have to adapt to Asian situations," says Dibyo Haldar, a strategy analyst with marketing agency Euro RSCG Worldwide in Singapore. "Direct marketing as a percent of budgets is increasing. Everyone wants to try it out."
Direct marketing costs far less than mass advertising. Sri Lanka Apparel, a 300-member trade organisation, has reached 100 000 people, spending only $150 000, by joining online communities such as student activist groups with an interest in garments made in safe, legal working conditions.
The same outreach via conventional advertising would have cost at least $20 million.
"We get a lot of bang out of our buck," says Sri Lanka Apparel global marketing chairman Kumar Mirchandani.
Amway Global, a major US-based direct marketing firm, reported 25 percent growth in greater China last year, and generated 30 percent of its worldwide business from the region.
"An Asian speciality is that personal relations are more emphasised," says Shirley Chen, the general manager at Amway Taiwan. "In the West, they think the internet can solve all kinds of problems."
Dave Poh began selling Nu Skin products in 2005 after a friend in Singapore introduced them to him following a sale to that friend by another friend. He has recruited about 80 members in his new home town, Taipei, largely by making friends with them.
Door-to-door sales
Almost 70 percent of consumers in Bangladesh and Sri Lanka bought something in a door-to-door sale last year, says Steve Yi, the chief strategy officer for the Grey Group in Seoul. And a once obscure foreign cigarette brand gained 10 percent of South Korea's market share in 2002 by handing out samples to bar hostesses who then passed them on to clients, who eventually began buying the brand, Yi adds.
Taking advantage of the popularity of door-to-door sales in India, 10 years ago Hindustan Unilever began a direct sales scheme in rural areas with populations of less than 2 000. About 100 000 villages are now involved.
Forty-five thousand women go door to door with Unilever hair oil, soap, shampoo and cream in baskets or cardboard cartons on bicycles. Last year they bought Unilever inventory worth 4.5 billion rupees (R740m), according to Hemant Bakshi, an executive director.
A boom in electronic marketing is expected as Asian consumers adopt the latest technologies faster than peers elsewhere and welcome ads via cellphone messages or online communities.
About 60 percent of internet users in the Asia Pacific region have made purchases based on e-mail advertisements, compared with less than half in North America and Europe, according to Epsilon.
By 2012, Asia Pacific will lead other regions in mobile marketing spending at $7.7bn out of the global figure of $16bn, according to a study by ABI Research.
"Direct plus digital is growing, while conventional advertising is definitely not, in terms of budgets and activity," says Haldar. - Reuters
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