Friday, October 9, 2009


Think regionally, act locally: Four steps to reaching the Asian consumer

The most successful global consumer enterprises are radically reshaping their organizations and business models to suit the region’s rapidly evolving high-growth markets.

Asia’s emerging economies are leading the world out of recession, and the region’s consumers are taking the baton from their overextended counterparts in developed countries. Are the largest
global consumer enterprises ready for this momentous shift? McKinsey’s experience suggests that even the most sophisticated multinationals must change significantly to realize Asia’s growth potential. The region is as diverse as it is vast. Its markets come in a bewildering assortment of sizes and development stages, and its customers hail from a multitude of ethnic and cultural backgrounds. Their tastes and preferences evolve constantly. The speed and scale
of change in Asian consumer markets can surprise even experienced executives. To meet the challenge, global companies will have to organize themselves regionally to coordinate strategy and use resources in the most efficient way while at the same time targeting the tastes of consumers on a very local level.

In Asia’s high-growth markets, these companies face intense competition from low-cost local players; customers with modest incomes, disparate preferences, and minimal brand loyalties; and fragmented distribution channels. Some of the problems will recede as the region’s economies mature. For now, though, the savviest players are trading their old management practice —including largely independent country operations and centralized administrative structures—for leaner, faster, more flexible, and regionally collaborative ones. They are strengthening their in-country operations while creating small, fast, and entrepreneurial regional leadership teams, which at their most successful adeptly allocate resources across markets, leverage scarce executive talent, drive innovations from one market to another, and relentlessly cut costs.

To see full report: ASIAN CONSUMER