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Go east or go home: Asia leads in tech adoption
FOR the past 10 years, Asia has been repeatedly touted as the next big thing that will change the world economy.
Enter 2019, that's not true anymore! Asia IS already the BIGGEST thing for adoption of tech products with advanced features.
In the past 20 years, the middle-class segment in Asia has been burgeoning, and with their increased spending power, they are buying more new tech products.
According to a report by Wolfensohn Center for Development, in 2009, 28 per cent of the world's middle class were estimated to be from Asia.
Come 2020, this percentage is expected to reach 66 per cent, compared to just 50 per cent in the US.
Endowed with their newfound wealth and spending power, Asians are keen to adopt new tech products, and are particularly interested in products that are novel, fun and sophisticated. This is mostly great news, but there is a "but".
With choices galore, buyer sophistication is growing in Asia, and often retailers, advertisers, and brands have less influence on purchase decisions.
According to a study by GfK, 62 per cent of Asia-Pacific consumers turn to online reviews from other shoppers; 56 per cent seek personal recommendations before making purchases, so word of mouth and social influence plays a bigger role in purchase decisions.
In addition, brand loyalty is rare among Asian consumers, as nearly two in every three (64 per cent) respondents surveyed in Asia said that they are less loyal to any one brand - a seven-percentage point jump from two years ago.
In comparison, the comparative figures for respondents in US and Europe were significantly lower.
If the above sounds like bad news, don't worry…It's not all doom and gloom. With the right approach, marketers and brands can still garner consumer interest and attention. Here's an approach to engage the early adopters in Asia.
GETTING IT RIGHT: INTRODUCING THE NEW TECH ADOPTION INDEX
Based on GfK's proprietary point-of-sales data, we analysed new consumer technology adoption of over 250,000 products in the consumer durables and technology industry in nine Asian and six key European markets to create a measure known as the New Tech Adoption Index.
The Index indicates a market's propensity to adopt new tech products based on how much higher or lower they are from the baseline of 100.
The Index helps brands and retailers understand the inclination of consumers towards adopting technology and consumer products with advanced features or technology.
The Index shows a wide ranging spectrum of new tech adoption from 46 to 146 across the Asian markets, highlighting the vast differing levels of adoption in the region.
Two of the fastest growing economies - China and India - are on the opposite ends of the spectrum, with China leading the Index, and India scoring the lowest.
In terms of new tech adoption, the top three countries are China, Singapore and Korea, and the bottom three - Vietnam, Indonesia and India.
We have classified consumer technology products into four different segments:
- Fun & Social: Products that enhance home living and boost the entertainment experience, such as headsets, panel TVs and loud speakers.
- Comfort & Convenience: Products that provide comfortable living and make home cleaning easier, such as vacuum cleaners, washing machines, air-conditioners and air treatment devices.
- Freedom & Lifestyle: Products that empower people and make life on-the-go much easier, such as headphones, digital cameras and wearables.
- Essential & Integral: A must-have for individuals who want to be adept, informed and in control, such as smart phones.
We found that unique country-specific traits take centrestage when it comes to adoption of new tech products.
For instance, new tech adoption for the Freedom category is led by Indonesia and Vietnam, where the local population is generally younger, while the mature markets of Korea, China and Singapore show higher new tech adoption for the Fun category due to their greater spending power.
With an undeniable desire for all things tech, Asia is a haven for new product testing. Apart from this, what else can be done?
Launching tech product? Take Asia seriously
When it comes to tech, Asia is no longer playing second fiddle to the West.
Therefore, it is practical for marketers to launch new tech products in Asia as the interest and take-up rate among Asian consumers are on the rise.
Audiences in Asia are less loyal to brands, love new experiences and enjoy sharing their perspective and being heard.
Brands that don't keep up with these expectations in offering unique experiences will fall behind the competition. With a whopping 78 per cent of respondents in Singapore saying they preferred to shop at websites that kept track of their visits and then made product recommendations accordingly, it is evident that personalisation and customisation matter a lot in the Asian context.
Therefore, whether it's AR, VR or good old retail, it is wise to invest in creating unforgettable moments.
Too many marketers still see "Asia" as a single entity. They cannot be more wrong. Use hyperlocal insights to reach your audience where it matters and take into consideration the cultural and behavioural differences between each country. Being generic is not the way to go.
Put mobile first
This is a given. With a mobile Internet penetration rate of 98 per cent, Asians are using smartphones for shopping and payments. Focus on developing an effective mobile marketing strategy to engage and convert your target audience.
Work on buyer experience, capitalise on their passion for technology
We observed that 33 per cent of respondents living in the Asia-Pacific reported that they are always among the first to try new technology and electronic products. Case in point: 69 per cent of them said they were open to making purchases on smart home devices such as smart speakers.
These broad principles aside, what is more important is for retailers to refrain from treating Asia as one homogeneous market. It is not ideal to adopt a "one-size-fits-all" approach for your marketing strategy.
It is important for brands to understand where their greatest potential of early adopters lies, as this group can create a network effect for their products. And here's where the New Tech Adoption Index comes in handy as it can help identify key markets, and even pinpoint the specific cities and regions within each market for brands to succeed in.
- The writer is managing director for the Asia-Pacific/Middle East, Turkey and Africa (APAC-META) of GfK Asia.