Local brands kill off easy-money era for multinationals in Asia

Zurich

NESTLE SA is losing buzz to an Indonesian coffee brand famous for brewing civet-cat faeces, and L'Oreal SA is losing face to a Chinese skincare brand favoured by President Xi Jinping's wife.

Asia traditionally was considered easy money for Western multinationals, with beverage makers, cigarette brands and fast-food giants capitalising on rising incomes and weak local competitors. A survey by China Market Research Group in 2011 showed 85 per cent of Chinese consumers preferring foreign brands.

Those days are over. That preference dropped by half last year, and it goes beyond China: brands of Indian toothpaste, Vietnamese laundry detergent and Japanese flavoured water are picking up market share with lower prices and by catering to local tastes. Rising stars suc…