Chinese auto brands venturing into Southeast Asia are poised for significant opportunities, but they must navigate a complex landscape of market challenges to succeed in the region.
THE RISE OF SOUTHEAST ASIA
Southeast Asia is an economic success story. According to the latest International Monetary Fund World Economic Outlook figures, Southeast Asia has a combined GDP of USD3.08 trillion. It is predicted that by 2050, the region will rank as the fourth-largest economy in the world.
With its vibrant economy, favorable foreign trade policies, and geographical proximity to China, the region offers significant opportunities for Chinese businesses to expand their presence, build strategic partnerships, and engage with Southeast Asian consumers.
In the four major markets of Indonesia, Thailand, Vietnam, and the Philippines, there is substantial demand for Chinese products, from beauty and electronics to rising interest in Chinese automotive brands. These markets are particularly welcoming to automotive brands that emphasize electric vehicles (EVs). As such, they collectively represent the ideal zone of expansion outside the saturated Chinese market.
Understanding the economic landscape, consumer perception, and demands in these markets is instrumental for Chinese brands looking to enter these countries and cultivate strong market presence.
This white paper by Vero and WeBridge provides insights into the economic landscape and consumer perceptions and demands in these markets and offers a roadmap for Chinese auto brands exploring Southeast Asia.
Economic Snapshots
Indonesia
Indonesia, the largest economy in Southeast Asia, has experienced significant economic growth since overcoming the Asian financial crisis in the late 1990s. It is the world’s fourth most populous nation and the 10th largest economy based on purchasing power parity. Indonesia’s economy expanded 5.3% in 2022 in its post-COVID recovery. However, the country expects moderate growth in 2023 and 2024 — both at 5%, as domestic demand takes over from commodity exports as the driver of growth, the Asian Development Bank reports. The Bank of Indonesia predicts that by 2025, economic growth will reach 4.9-5.7%.
Philippines
The Philippines’ vibrant and dynamic economy is driven by urbanization, a burgeoning middle class, a strong labor market, and robust remittances. In 2022, the Philippines experienced a remarkable 7.6% economic growth, the fastest since 1976. GDP growth in the country is projected to slow to 5.6% in 2023 due to still-elevated inflation, tight financial conditions, and a weak external environment, but the World Bank noted the economy is expected to pick up to 5.8% by 2024 and 2025.
Thailand
Thailand, the second-largest economy in Southeast Asia after Indonesia, has transitioned from a low-income to an upper-middle-income country. Between 2015 and 2019, the Thai economy grew at an average annual rate of 3.4%, and its GDP is expected to reach $509.21 billion by the end of 2023, according to Trading Economics. In the long term, Thailand’s GDP is projected to reach around $531.11 billion in 2024 and $548.63 billion in 2025.
Vietnam
Vietnam, an agro-industrial country, is one of the fastest-growing in Asia, with an impressive average annual GDP growth rate of 6.5% pre-pandemic, positioning it as a lucrative long-term market. In 2021, the GDP exceeded $352 billion. The World Bank forecasts moderate growth of 4.7% in 2023, gradually accelerating to 5.5% in 2024 and 6.0% in 2025.
The China-ASEAN Trade Partnership
Southeast Asia’s geographical proximity to China has made it an attractive market for Chinese investments. From large-scale infrastructure projects to the energy sector, technology, and manufacturing, Chinese investments in the region have experienced substantial growth. China’s trade with ASEAN amounted to $975.3 billion in 2022.
Trade between China and Southeast Asia has more than doubled in the past decade and almost quadrupled since the ASEAN-China Trade in Goods Agreement came into effect in 2005. Within this trade agreement, more than 90% of goods from China and ASEAN are subject to zero tariffs. This has led Southeast Asia to overtake the European Union and become China’s primary trading partner, indicating the establishment of a new regional economic and trade cooperation framework.
Additionally, a 15% year-on-year increase in trade was observed following the implementation of the Regional Comprehensive Economic Partnership (RCEP). Within RCEP, over 90% of trade in goods will be fully liberalized.
Southeast Asia’s Transport Infrastructure
According to the Asian Development Bank, Southeast Asia will need to spend $2.8 trillion on infrastructure through 2030 to sustain economic growth. To meet these demands, countries in the region should invest more than 5% of their GDP over the next decade. Presently, Vietnam leads ASEAN in infrastructure investment, dedicating 6% of its GDP to this sector. In comparison, Indonesia and the Philippines allocated about 5% of their GDP in 2023, while Thailand had the lowest infrastructure spending at 3.1%. Recognizing that transportation and mobility are critical drivers of economic growth, governments are directing their efforts to address transportation challenges, modernize the transport system, and ensure efficient networks.
—Expanding Road Networks for Better Connectivity
Indonesia has made substantial investments in constructing toll roads across Sumatra, Java, North Sulawesi, and Kalimantan, aiming to alleviate congestion in cities such as Jakarta and encourage car ownership. Additionally, the country has commenced the development of roads, expressways, green zones, and energy infrastructure in Nusantara, East Kalimantan, the site for Indonesia’s new capital.
Thailand, meanwhile, announced it is investing about $15 billion in transport infrastructure to promote economic growth. Thailand’s current network of roads and highways has a total length of 702,989 km, and is bound to expand as new investments pour in. In the first phase of a 20-year Motorway-Rail Map project, Thailand will construct 331km of new highway, establishing a modern and efficient transportation network.
Significant road construction initiatives are also underway in the Philippines. Among these projects is the construction of the Metro Cebu Expressway (MCE). The north-south bypass is expected to cost $1.64 billion. Additionally, the 8km NLEX connector road, linking the North Luzon Expressway and Manila, was opened for motorists in October, further improving connectivity.
Vietnam’s ambitious transportation infrastructure plans are projected to cost up to $65 billion between 2021 and 2030, with an aim to scale up the current 1,290km of national highway to 5,000km by 2030. The ambitious 1,800km HCMC-Hanoi highway is currently being constructed, which will aid transport and goods movement throughout the country.
—Developing Infrastructure for Mobility Electrification
Southeast Asia knows the future of mobility is electric. Consumers in the region are showing willingness to shift to electric cars —56% in Thailand, 51% in Vietnam, and 47% in both the Philippines and Indonesia, according to a survey by Milieu — but the current infrastructure gap remains a deterrent to the full adoption of green mobility.
Charging stations remain scarce, if not inaccessible, making consumers apprehensive on long-haul routes. A comprehensive network of publicly accessible charging points is essential for the successful decarbonization of the region’s transport sector. Indonesia only has 439 charging stations as of November 2022, Thailand has about 2,000 charging stations, and the Philippines has 900 charging stations, but only 338 are registered with the government. Vietnam’s EV infrastructure, meanwhile, is currently dominated by homegrown EV manufacturer VinFast, which does not share stations with other brands.
Major factors impacting the growth of EV charging penetration in the region include the lack of usage and purchase incentives for EV users, high import tariffs, lack of accessible space to serve as charging stations, inefficient distribution of charging infrastructure (resulting in saturation of EV chargers in commercial areas), and lack of EV chargers in residential areas where it is more convenient for users to use overnight charging.
The availability of efficient battery-swapping systems in the region is also a common concern among Southeast Asian consumers. A Singaporean smart battery startup is one of the few players trying to bridge the gap in Indonesia, having already built 16 swap stations in Jakarta, but only for e-bikes. In Vietnam, homegrown EV scooter startup Selex is building battery ATMs, sophisticated automated locker systems that allow users to conveniently exchange depleted batteries for fully charged ones. Thailand and the Philippines are currently testing out battery swapping systems with private companies, but such services may only be available in their capital cities.
Governments will need to streamline the processes and allow data-sharing – between charging points and the vehicle, the manufacturer and the vehicle, the charging network providers and charging points, or charging network providers and utility providers – that could also help to strengthen the overall EV ecosystem.
—Government Policies Propelling EV Adoption
The rise of electric vehicles in Southeast Asia is propelled by government efforts to promote environmentally friendly transportation systems. Energy efficiency, a central topic of discussion and a key purchasing motivator among consumers in Indonesia, Thailand, the Philippines, and Vietnam indicates a surging demand for these vehicles.
Indonesia has made a priority of boosting electric vehicle production and usage. The government is actively courting more Chinese investors to create a downstream nickel industry. Indonesia is the world’s largest nickel producer, which is essential for making the lithium-ion batteries used in EVs, of which China is the world’s largest producer. The government announced its goal for Indonesia to become one of the top three producers of EV batteries by 2027. In April, the country lowered its VAT on battery-based electric vehicle sales from 11% to 1%, provided they are manufactured with at least 40% local content.
To achieve its goal of phasing out gasoline-powered cars by 2040, the national government is already laying the groundwork for a robust EV market. This involves providing tax breaks for EV imports over the next five years, with the Most Favored Nation (MFN) tariff rates reduced to zero percent on various imported EV categories, including passenger vehicles, buses, minibuses, trucks, bicycles, motorcycles, scooters, and tricycles. However, it’s important to note that hybrid-type EVs are excluded from this tax exemption. This initiative aligns with the Electric Vehicle Industry Development Act, which aims to transform the Philippines into a regional hub for EV production and assembly by offering incentives to manufacturers, suppliers, and buyers, thereby encouraging the growth of the EV industry in the country.
The Thai government approved a package of incentives, including tax cuts and subsidies, to promote EV consumption and production from 2022 to 2023 by reducing the price of each EV by $2,200 – $4,800 (dependent on the model). The Thai cabinet also approved measures to promote domestic manufacturing of EVs, including exemptions from import duties on significant electrical parts from 2022-2025. These significant electrical parts include batteries, traction motors, compressors for battery EVs, battery management systems, drive control units, and reduction gear. Thailand aims to be an electric vehicle production hub in Asia and expects EVs to make up 30% of its total auto production (or 725,000 units/year) by 2030.
Vietnam has implemented a compelling incentive for electric cars, providing a 0% registration fee for battery electric vehicles for three years starting from March 1, 2022. Over the following two years, the registration fee will be merely 50% of that for ICE cars with the same seating capacity. The special consumption tax rate for battery electric cars has also been significantly reduced to just 1-3% until the end of February 2027. Additionally In August, the government proposed to give out a $1000 subsidy to buyers of EVs, in a bid to change consumption behavior away from fossil fuel vehicles. Also being discussed are several policies to encourage the installation of electric charging stations, including the exemption of import taxes on components and equipment, exemption of corporate income taxes and land fees for five years, and a 50% tax reduction for the next five years.
OPPORTUNITIES FOR CHINESE AUTOMOTIVE BRANDS IN SOUTHEAST ASIA
China is Experiencing A Positive Shift in Consumer Perceptions
China’s remarkable manufacturing revolution, in parallel with its continued technological advancements, has rewritten the narrative surrounding its products in recent decades. These developments enabled China to dominate the global supply chain and eventually become “the world’s factory.”
As manufacturers started to rebalance production volume and expectations of value, Chinese brands expanded their reach beyond the border, positioning their products competitively against multinational rivals. The country’s ability to rapidly digitalize products, services, communication, and distribution, exemplified by the surge of e-commerce platforms, has further facilitated Chinese brands in captivating Southeast Asian consumers.
Using Vero’s social listening tools, we identified three attributes of Chinese brands and products that exhibited the highest growth rate in sentiment scores over the past four years in Indonesia, Thailand, the Philippines, and Vietnam.
Chinese Products’ Affordability and Smart Features Captivating Consumers
Southeast Asia is positioned as one of China’s most vital consumption markets. Consumers in the region exhibit a wide range of preferences, demands, and purchasing motivators influenced by cultural nuances and economic development.
Across all four markets, consumers value Chinese brands for the affordability of their products and services.
Our research also revealed that Vietnamese and Indonesian consumers perceive Chinese products as innovative, especially in the domains of electronics and vehicles.
Filipino and Thai consumers, meanwhile, see Chinese brands’ seamless integration of online and offline distribution channels as an advantage. The presence and influence of prominent Chinese e-commerce platforms such as Alibaba, Taobao, and JD.com have made cross-border purchasing experience easier for consumers in the region.
There’s also a notable focus on Chinese products’ functionality and design, reflecting the increasing importance placed by consumers in Indonesia, Thailand, the Philippines, and Vietnam on the aesthetic qualities of a product.
Word-of-mouth continues to be an effective marketing tool for Chinese brands, as people in these markets actively seek personal reviews and product recommendations when considering brands from China.
Chinese Auto Brands Gaining Attention
Now more than ever, Southeast Asian consumers are open to the prospect of buying Chinese-made automotive products. This shift is largely due to the growing interest in EVs, combined with undeveloped domestic production. Of the four markets studied, only Vietnam has a home-grown EV producer (VinFast), which targets a different market segment from most Chinese brands. Meanwhile, several Chinese brands have already made inroads in these markets, though they are far from saturated. Here’s a glimpse of Chinese auto brands’ presence in Southeast Asia:
The Chery Omoda 5 was awarded as the Most Driven Car with 767 test drives and 376 units sold at the Gaikindo Indonesia International Auto Show (GIIAS) 2023. Chery plans to set up US$ 1 billion worth of factories in Indonesia, open more dealers and aftersales services around the country, and launch upcoming Chery models. Chery also entered Vietnam in 2022, with plans for domestic manufacturing, offering a diverse range of quality products that fit Vietnamese consumers’ lifestyles and preferences.
MG unveiled its latest EV model, the MG ZS EV, at the Gaikindo Indonesia International Auto Show (GIIAS) 2023 and saw 256 orders placed during the event. The MG ZS Nite Edition Crossover SUV and GT Sport Sedan debut at 2023 MIAS debuted at the Manila International Auto Show. MG has raised the level of after-sales service with express delivery of spare parts 24 hours a day, along with a second spare parts warehouse which supports all models sold in Thailand as demand rises.
Two of Indonesia’s ministers visited BYD HQ in Shenzhen, China to discuss business strategy and BYD investment in the country. BYD’s dominance in the EV industry stood out, with its 1.2 million EV sales in the first half of 2023, beating Tesla. Philippines’ AC Motors partnered with BYD to distribute EVs in response to the growing demand for clean mobility in the Philippines. BYD delivered 274,386 electric vehicles (EVs) in August in Thailand, up 57% from last year. Vietnamese Deputy Prime Minister Tran Hong Ha expressed confidence in Vietnam’s commitment with BYD to facilitate investment and production development opportunities.
Great Wall Motors opened 22 DC Fast Charge electric charging stations in Thailand in August, with plans to further expand the G-Charge station network by adding 33 more by the end of 2023. GWM Thailand announced sales totaling more than 6,222 vehicles for the first half of 2023, comprising five models led by the ORA Good Cat, which had sales of more than 2,600 vehicles.
Southeast Asian Consumers Embracing Chinese Auto Brands Positively
Southeast Asian consumers have generally positive perceptions of Chinese auto brands based on their affordability, technological features, sleek and modern designs, and convenience.
Chinese car manufacturers often offer vehicles at competitive prices, making them accessible to a broader segment of consumers in the region. They appeal to price-conscious consumers looking for budget-friendly options without compromising functionality, smart features, and style.
Key Conversations: From Finance to Road Shows
Vero analyzed key online conversations to find out more about their interests and preferences regarding cars.
We found that keywords related to CAR LOANS, like special interest rates, flexible monthly installments, and wise payment, are major topics of discussion, especially in Thailand, the Philippines, and Vietnam. Many netizens, key opinion leaders (KOLs), and influencers are sharing valuable insights on responsible car loan management and utilizing credit cards.
Consumers in all four markets also showed interest in electric vehicles, as evidenced by significant search volumes of keywords such as ENERGY SAVING, ELECTRIC CARS, and ENERGY EFFICIENCY. Across markets, EVs are highly considered energy-efficient and cheaper to run and maintain than internal combustion engines. In Thailand and the Philippines, CAR INSURANCE is a hot topic of discussion. Many consumers are seeking information and advice on the best car insurance options. Thai consumers are particularly concerned about the high cost of insurance for electric vehicles.
These findings underscore the direct link between finances and car ownership, highlighting the importance of strategic financial planning. Consumers actively seek options that offer excellent value for their money in this context.
Additionally, the prevalence of topics related to ROAD SHOWS and INTERNATIONAL MOTOR SHOWS in Vietnam and Indonesia signifies the growing enthusiasm for exhibition and road show events. These events provide attendees with the opportunity to physically explore various car models and experience test drives firsthand before they make a car purchase.
Southeast Asians View Cars as Essential, but High Maintenance Costs Pose Major Worry
Top Motivators
In Southeast Asia, the significance of owning a car as a symbol of financial stability leads consumers to meticulously assess their choices. Individual preferences and lifestyle considerations play a pivotal role, particularly in Indonesia, Thailand, and Vietnam, where cars reflect one’s living standards. The Philippines, emphasizing necessity due to traffic congestion, underscores the essentiality of car ownership in daily life. Chinese car brands, known for their affordability, resonate with Filipinos’ aspirations, making car ownership attainable.
The expanding ride-hailing market in Vietnam influences purchase decisions, especially for business use. This trend opens strategic opportunities for Chinese car brands to collaborate with ride-hailing platforms, following the successful model of VinFast and Be partnership. Additionally, the increasing demand for energy efficiency fuels the interest in electric vehicles among consumers in Thailand and the Philippines. China’s position as a major electric vehicle manufacturer, offering diverse options and bolstering charging infrastructure, aligns well with this trend.
Top Barriers
Despite the positive perception of affordability associated with Chinese car brands, the high cost of car ownership remains a significant hurdle in Southeast Asia. Complexities in car loan processing, expensive insurance, maintenance, and fluctuating gas prices compound financial concerns, particularly for consumers in Indonesia, the Philippines, and Vietnam. Chinese car brands’ competitive advantage lies in their perceived affordability, a crucial factor as consumers expect electric vehicles to be reasonably priced.
Moreover, limited parking spaces and worsening traffic congestion pose significant challenges, notably in Vietnam and Indonesia. Addressing these concerns, along with worries about the environmental impact of car ownership and the origin of the brand, presents an opportunity for Chinese auto brands. By offering eco-friendly electric vehicles and enhancing the desirability of Chinese-made products, they can effectively tackle these barriers and establish a stronger foothold in the Southeast Asian market.
OVERCOMING ENTRY CHALLENGES: CHINESE AUTO BRANDS IN SOUTHEAST ASIA
Dominance of Japanese Brands
Southeast Asia’s growing automobile sector attracts global manufacturers and investors due to the expanding middle class and favorable trade agreements, creating a competitive industry.
Currently, the Japanese auto brand Honda holds a dominant position in the Indonesian, Thai, and Filipino markets in terms of share of voice (SOV). Honda has strategically set up several production facilities in all four markets and has gained recognition among consumers for its diverse range of vehicles that cater to different segments. In Vietnam, however, the German luxury brand Mercedes-Benz is the most talked about brand.
Toyota, another renowned Japanese brand, enjoys widespread popularity across all four markets, consistently ranking in the second or third position. Other Japanese auto brands that dominate the market include Nissan, Suzuki, Mazda, and Mitsubishi.
In Vietnam, the Chinese brand Chery has surpassed Subaru and Nissan in terms of SOV. Chery launched a #FunToDrive campaign earlier this year, which raised brand awareness and increased sales by 12%. Geely, FAW, and BYD have also achieved significant market share, thanks to their partnerships with local businesses and government agencies.
MG, a British-Chinese automotive company, has also established itself as a leader in electric vehicles in Thailand with significant SOV, aided by the brand’s collaboration with many Thai influencers to build brand awareness of its new MG ZS series in 2023.
Issues on Quality and Safety
While Chinese-made products have gained popularity and positive perception in recent years, brands still face skepticism, especially toward cars. Chinese automakers need to overcome consumer prejudice and showcase their quality, technology, and competitive advantages.
According to insights from Vero’s social listening tools, most consumers in Southeast Asia find the reliability and quality of Chinese auto brands a major concern. These consumers express significant reservations about the durability and long-term performance of these cars, comparing them to other foreign brands that have already established superiority.
In Thailand and Vietnam, consumers have highlighted the poor safety standards associated with Chinese car brands. Thai EV owners have reported incidents of batteries catching fire due to rapid overheating, raising serious safety concerns.
In the Philippines, where many view car ownership as an investment, consumers are worried about the low resale value of Chinese car brands, adding another layer of concern for potential buyers.
Additionally, Indonesian and Thai consumers have expressed concerns about the unavailability of spare parts and delayed maintenance services, indicating that after-sales service significantly influences brand choice.
KEY RECOMMENDATIONS FROM VERO AND WEBRIDGE
Leverage Current Positive Perceptions of Chinese Auto Brands
—CASE STUDY: Wuling Air EV launch in Indonesia
Wuling launched its first electric car in Indonesia in 2022 with the strong USPs of affordability and a charming design with various color options. It positioned itself as a ‘fashion car’ that Indonesians want because of its uniqueness.
LAUNCH: Wuling held an exclusive event for the first 100 buyers of Wuling cars in Jakarta. Wuling also carried out the first convoy of 100 cars on the streets of Jakarta and received a good reception from the public.
INFLUENCER CAMPAIGN: Wuling collaborated with at least 5 big influencers in Indonesia, with each associated with a different color: Arief Muhammad as a young father (Avocado Green), Den Dimas as a lifestyle enthusiast (Lemon Yellow), Om Mobi with a passion for car modifications (Peach Pink / Lemon Yellow), Ridwan Hanif the renowned automobile YouTuber, represents the epitome of superb automotive performance (Galaxy Blue), and Fitra Eri as the representative of an older demographic (Pristine White).
PR COMMUNICATION: In addition to the stories of the cars themselves, Wuling also emphasized the message “Chinese cars assembled in Indonesia,” showcasing its commitment to further developing the Indonesia market.
RESULT: Wuling Air EV sales skyrocketed, even outselling its competitors by a significant margin. The brand was also named an “Omni Brand of the Year” by Marketeers.
Take a 360-Degree Stakeholder Approach to Build Trust
—CASE STUDY: VinFast collaborates with Be Group and Cake by VPBank to support beBike drivers switching from gasoline scooters to electric bikes
VinFast, a multinational automotive company founded by Vingroup, the largest private conglomerate in Vietnam, has partnered with the ride-sharing service Be Group and the multi-service consumer platform Cake by VPBank, a local Vietnamese bank, to support beBike drivers in transitioning from gasoline to electric motorbikes.
VinFast offers Be drivers a 4% discount on the VinFast Feliz S electric motorcycle, while Cake by VPBank provides favorable loans with starting interest rates as low as 0%. All loan procedures are conducted online, making it convenient for drivers.
Through this partnership, VinFast is familiarizing Vietnamese people with its products, making them a common sight on the road and allowing many people to experience a ride on the back of one.
Think Global, Act Local
Brands can leverage their global strengths in ASEAN markets but need to deliver those with a tailored narrative based on local insights. Brands entering a new market do not need to cover all sub-communities initially, but rather cultivate an enthusiastic base then scale up to others.
—CASE STUDY: Hyundai Motors and its locally-driven 360-degree stakeholder activation strategy
Hyundai has been actively expanding its presence in the Indonesian market, intending to make headway in a market traditionally dominated by Japanese automakers like Toyota and Honda. These Japanese giants have long held a strong position, with their brands gracing more than 80% of passenger cars sold in the country. Hyundai Motors Indonesia (HMID), the local sales company of the Korean automaker, began at the 13th spot with 3,005 cars sold in 2021 but quickly rose to the eighth position, selling 31,965 units in 2022.
The IONIQ 5 represents Hyundai’s latest electric vehicle offering and its first all-electric model manufactured outside Korea. Under the banner of “Power Up the Future,” Hyundai has built trust with its customers through a locally-driven 360-degree stakeholder activation strategy:
- Establishing a corporate presence via an assembly plant in Indonesia. This step demonstrates support and dedication to local authorities and customers, aiding the country in addressing its mobility challenges more effectively.
- Fostering an image and lifestyle association. In addition to collaborating with local influencers such as Ridwan Hanif and Fitra Eri, the product has earned recognition as “a Ministerial Mobility Vehicle” by providing 117 cars for use as official operational vehicles during the 2023 ASEAN Summit.
Supporting this stakeholder activation strategy is a locally tailored approach designed to cater to the unique needs of the Indonesian market and share stories from a local perspective.
Promote Electric Vehicles
As Southeast Asia moves toward a more sustainable transportation and mobility sector, consumers’ attention are now directed towards electric vehicles. Chinese auto brands, known for their superb BEV and hybrid cars, can take this opportunity to help further propel the region’s EV industry.
- Embrace authentic sustainability messaging, but don’t overplay it.
- Dig deeper and try to address consumers’ pain points in EV adoption.
- Introduce EV models tailored to local preferences.
- Promote green mobility as a lifestyle.
- Partner with like-minded industry leaders.
- Promote thought-leadership and pioneering activities of China in the global EV industry.
Work with us! Contact nihao@vero-asean.com to explore vast opportunities for Chinese brands in Southeast Asia.
RESEARCHERS:
| Do Duy Quang Vice President, IMC Consulting, Vietnam in IMC Team quangdo@vero-asean.com |
Tran Kim Hoang Yen Associate PR Account Director, Vietnam in PR yen@vero-asean.com |
| Nguyen Quang Thach Director, Data and Insights, ASEAN thach@vero-asean.com |
Tran My Ha Senior Data Analyst hatran@vero-asean.com |
| Peerapong Pongpakdee Data Innovation in IQ and Media, Thailand peerapong@vero-asean.com |
Dzikri Sabillah Anwar Senior PR Executive, Indonesia chiki@vero-asean.com |
| Kim Donato Digital Account Executive, Philippines kim@vero-asean.com |
What comes to mind when you think of an exhibition? Endless rows of cookie-cutter booths with basic signage and uninspiring product displays?
Exhibition booths are a fantastic means to activate your brand and boost exposure, but how do you stand out in an expo surrounded by thousands of others? Bangkok is home to a plethora of world-class MICE business, bringing in over 35 million visitors to the city. Riviera shares their top 4 tips to guarantee your booth’s success.
1. Define the Objective
What is the purpose of your booth? Consider what you would like the consumers to take away. Do you want to educate them about your brand? Generate new leads? Debut a new product? Confirm a clear goal, so that you can craft the journey based on what you want to achieve.
2. Make an Impression
Incite an emotion or reaction by creating a memorable experience. A multi-sensory booth that takes the consumer on a journey strengthens their association to the brand. Interactive displays and technology are a fantastic means to engage with your consumers and capture their attention. Creativity aside, be sure to maintain visual and brand consistencies throughout. Working with trusted vendors makes all the difference, as the feel and quality of your booth will represent your brand just as much as your product or service.
3. Amplify Your Exposure
Capitalize on your interaction with the consumer by creating visually-captivating experiences and create an opportunity for them to shout about you. Let the consumers be the mule to broaden your reach as they naturally take your offline presence, online. Watch it spread like wildfire.
4. Make an Impression
Incite an emotion or reaction by creating a memorable experience. A multi-sensory booth that takes the consumer on a journey strengthens their association to the brand. Interactive displays and technology are a fantastic means to engage with your consumers and capture their attention. Creativity aside, be sure to maintain visual and brand consistencies throughout. Working with trusted vendors makes all the difference, as the feel and quality of your booth will represent your brand just as much as your product or service.
Premier Event Agency, Riviera, are experts when it comes to booth design having over 14 years of experience as Asia’s leading event management company. With offices across Thailand, Singapore & Greater China, their team are driven and full of passion to create something unique for each client, helping them scope out what best fits their needs. Don’t let your next trade show booth slip under the radar, leave a lasting impression on your consumer. Be bold.
As China’s economy transforms itself, becoming less export-focused and integrating new fields like electric vehicles, e-commerce, and cashless payments, its footprint in Thailand (and throughout the ASEAN region) continues to expand.
Chinese brands such as Xiaomi, Huawei, Alibaba and the Bank of China have already staked out strong positions in the Thai market, suggesting that marketers in ASEAN companies should take a closer look at the methods they employ.
To get a better understanding of Chinese market behavior, members of Vero’s Bangkok team went to Shanghai and met David Wolf, Managing Director of Allison + Partners’ Global China Practice. The following are our key insights from our workshop with Mr. Wolf:
CHINESE CONSUMERS ARE OVERWHELMED WITH BRANDS
Chinese consumers may be the most sophisticated in the world. A plethora of options, including the world’s largest mobile device market and the most car brands available in any country, mean that Chinese people need to be informed and skilled at choosing where to spend their money.
Chinese consumers expect brands to regularly change their products and add new features. This may be why Apple is less successful in China as other countries, since their infrequent product launches and updates can’t compete with brands like Xiaomi who update their MIUI firmware almost every week. Brands who don’t regularly renew their products or services tend to be forgotten as consumers gain loyalty to those that do.
LinkedIn is prospering in China. This is partly because they localized their service, but it’s especially due to their frequent additions of new and improved features. Successful Chinese online companies like WeChat also make constant effort to tell different stories about their product which appeal to different segments of Chinese consumers. In other words, when doing business in China, companies know they have to earn the consumer’s loyalty every day.
CHINESE BUSINESSES SEE THE WORLD IN THEIR TERMS
“China’s leaders believe it is now their turn to lead the world. [And Chinese companies] truly believe in their own leadership, and will tend to see other countries not always as equals,” Wolf explains.
Perhaps as a side-effect, Chinese companies tend to under-recognize differences between foreign markets and their own. When expanding operations into neighboring countries, they often duplicate the product and/or service that works well in China, changing the language without adding features to meet local needs and preferences. “They treat the business environment, the media, and even the culture as if it were essentially the same as theirs”, said Wolf.
Assumptions that business and media environments work similarly outside of China can lead to PR miscalculations.
In China it is common to pay media figures to promote and attend corporate events, which could cause a scandal if attempted in many other countries. Chinese companies expanding their business into Thailand will need to study the local media landscape and the PR industry’s role in it, a process for which those in the industry can act as valuable guides.
CHINESE COMPANIES KNOW WHY THEY’RE COMING TO THAILAND
Thailand is geographically close and has similar market conditions to China, making it attractive to Chinese companies because their homegrown products are more likely to find success here compared to the US and EU.
“Smart Chinese companies understand that they can benefit from operating in neighboring markets where customers look like their own – young people in Asian cultures who are more prosperous than their parents,” Wolf says. They can more easily identify promising market gaps in ASEAN countries. They also perceive Thais as friendly people who are easy to work with.”
As a result, we can expect a continued influx of Chinese companies into the Thai market in the years to come. Marketers who know how to work with these companies, and act early to build Chinese connections, stand to gain the most. With all this in mind, marketers should keep a close eye on how the economy is going to expand its footprint in the region and play a bigger role in their markets.
*Over 130 different car brands and 952 different cars available on the Chinese market. Forbes, 5 Stunning Facts About The Chinese Car Market You Need To Know, 16 May 2016
This blog was based on a Workshop in Shanghai titled “Winning strategies for working with Chinese audience and Companies” by David Wolf, Managing Director of Allison + Partners’ Global China Practice.
ALEXANDRA DUCROT IS A PR EXECUTIVE AT VERO THAILAND.
DEREK WELLS IS A COPYWRITER FROM THE US, CURRENTLY BASED AT VERO VIETNAM.
Why you should know what a KOL is
Ever heard of the term KOL? Most people outside of China have not – it stands for Key Opinion Leader. If you’re familiar with influencer marketing, you already have a basic understanding of what a KOL is. A KOL can be anyone from a well-known celebrity, socialite, a blogger, or industry expert, but they are all deep into Chinese social media and its many intricacies.
So what makes a KOL in China different from an influencer in the West?
THE GREAT FIREWALL PRODUCES RISING STARS
First it is important to understand that the Chinese online ecosystem has developed much differently due to many popular social media platforms, like Facebook, Instagram, YouTube, Twitter, and Snap-chat being blocked in China. Because of this it makes it trickier for many brands to directly reach consumers in the way they do in the West. However, for social-media savvy individuals, this impediment has worked in their favor.
SHOW IT, SEE IT, BUY IT – DIGITALLY OF COURSE
The other main difference that has shaped the market is the rise of eCommerce and the ease in which individuals can connect with followers and sell online through different social media platforms. China’s digital ecosystem is massive, and optimized for mobile pay, just see the chart below from Boston Consulting Group highlighting just how integrated China’s digital platforms are. KOLs , more than brands, have made the most of this digital landscape. On live-streaming platforms a KOL can present a product, post a link on their live video, which connects directly to an eCommerce platform such as Tmall or Taobao where viewers can instantly make a purchase. Now, many KOLs even have their own Tmall or Taobao store, and can make millions in a matter of minutes.
NO SHAME
Another big advantage KOLs in China have is that Chinese consumers are less put-off by blatant advertising and paid sponsorships. An influencer in the West may be harassed for such behavior, and labeled as a “sell-out,” but not in China. Chinese consumers are apathetic to this style of promotion and many expect it. Turning to their favorite fashion bloggers to easily buy the hottest lipsticks and handbags on the market – and why wouldn’t they? The product has been tried, tested and shown to them by someone they feel they have a personal relationship with.
The benefits to brands who work with KOLs
- Trust: as mentioned before, KOLs have spent years building up the trust of their followers. The good ones have carefully curated their content and partnerships to establish a niche for themselves and build their personal brand. If a KOL trusts your brand, their loyal followers are likely to as well.
- Better targeting options: Chinese social media platforms such as WeChat offer poor advertising options with limited targeting. If you can find the right KOLs to work with, you will see a much higher ROI than if you advertise through WeChat moments.
- Captive audience: Unlike traditional advertising where you may have 2-3 seconds to catch the attention of your target audience, people are actively tuning in to watch KOLs. They’re not searching for keywords on Baidu, they’re watching KOLs tell them what they should be buying and what brands to follow.
What platforms do KOLs have at their disposal?
WeChat – The messaging app that is so much more. WeChat allows users to send personal messages back and forth, and also has a Facebook-ish newsfeed in it as well. Brands can access the platform but because of the closed off, and more personal nature of the app, it can be tricky for brands to utilize it. That’s where KOLs come in. They can create and official, verified account to push out content to their followers as often as once per day.
Weibo – Although we hate to do it, this is the app marketers in China will compare with Twitter. News and information here can be circulated among a bigger audience faster.
Live-streaming – There are several popular live-streaming platforms, including Youku, Tencent Video, Yi Zhi Bo, and these give KOLs immediate access to their fans and the option for two-way communication. Viewers can type requests, questions and even send money to the KOL in real time.
While it is getting more expensive to work with KOLs – depending on a number of factors 1 post can cost between 5K – 50K RMB – the benefits are extensive. As more and more Chinese become accustomed to receiving their information through these KOLs, brands must strategize accordingly.
Olivia Plotnick is a Marketing Manager at Brandigo. Brandigo is a global brand and marketing agency. They combine strategy, creative talent and business know-how for fresh, inspirational, personalized marketing and communication campaigns for businesses already in China, or those planning to enter