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What Asia’s rise means for brands

The 21st Century might be Asia’s time to shine, but what does that mean for brands? Emma Barraclough considers the issues

Few Annual Member attendees visiting Hong Kong would doubt that we are living in a century in which Asia is in the spotlight. But what does that mean for brands and brand owners? Western trademark owners are excited by the prospect of adding millions of brand-hungry shoppers to their consumer base as the region’s economies grow, of course, as well as by the opportunity to outsource production to low-cost economies. The rapid integration of Asian economies into the global marketplace, however, presents many Asian brand owners with a completely different set of opportunities and challenges. While many Western brands built their international reputation over decades, the pressures of globalization means trademark owners from emerging economies cannot afford to take the same gradualist approach to brand building if they want to capture global market share.

There are certainly plenty of examples of companies that made the successful transition from domestic players to global powerhouses: Japan’s state-of-the-art consumer technology and its reliable cars transformed perceptions of the country in the 1970s and 1980s. Its products were efficient, stylish, covetable. Korean electronics companies are now firmly in the global mainstream. But Asian companies in the fast-moving consumer goods sector could find the going tougher. Not only do they need to establish new brands in Western markets, they also need to ensure that consumers think their products have universal appeal.

Panelists in a session today moderated by Karen Fong of Rouse (What Role Will Trademarks Play in the Future of Asia?) will consider some of these challenges. The speakers, Toe Su Aung of BATMark Limited, Akira Endo, Kao Corporation and Rachel Li-Mei Tan of Rouse & Co. International, will focus on the integration of Asian consumers in the global economy. Endo will explain how Kao Corporation entered the global market; Aung will focus on Asean economies and consider the impact of free trade deals on the protection offered to trademarks; while Tan will examine enforcement issues in Asia, explaining how trademark owners can protect their rights most effectively.

Expansion plans

Asian companies have a number of options for expanding internationally. The first is to maintain their trademarks and pitch their products at new markets. During today’s session, Endo will outline some of the challenges that the Japanese business faced when it took brands that were developed for a domestic market and designed to meet the needs of local consumers, and prepared them for an international market. He will explain the issues involved in globalizing Kao Corporation’s beauty care portfolio, which includes products ranging from cosmetics to shampoos, many of which were designed for Asian skin and hair types. He says that one of the company’s most successful products has been its BIORE range of deep cleansing pore strips, given that fighting against pimply skin is a universal teenage experience. Kao Corporation launched its BIORE Pore Pack in Japan first, and later introduced it in 45 countries around the world with its original formula. The product has been particularly successful in the U.S., and BIORE Deep Cleansing Pore Strips have helped globalize the BIORE brand.

Rouse’s Karen Fong says that it is vital that Asian brand owners spend time and money establishing what their brands represent. “A trademark is a way of communicating to the world what you stand for. The name is what is registered but it is not as important as what it invokes,” she says. This is particularly important for brand owners from countries such as China that want to internationalize their products. “There’s a good chance that no one will have heard of the name of the brand before, so what is vital is the way that companies present it.” The way that the mark is presented can also reassure foreign consumers who are more used to thinking about China as a source of low-end, mass produced products and of counterfeits. Clothing brand BOSIDENG, for example, whose founder began selling down jackets in China in the 1970s, opened its sleekly designed flagship BOSIDENG London store in 2012 in a prime bit of London retail real estate, offering clothes which its website promises are “Classic. Inventive. Understated. Excellent.”

Another option for outward-looking Asian businesses is to buy trademarks overseas, giving them access to established brands sought by consumers back at home, or as a channel for marketing their own products to foreign shoppers. It is an approach that many Chinese and Indian companies in particular have favored in the past decade (see chart). Lenovo’s acquisition of IBM’s THINKPAD brand in 2005, for example, allowed the Chinese company to reposition a rather tired trademark successfully for Asian markets. In 2008, India’s Tata Motors bought the Jaguar and Land Rover businesses from Ford. Last year, China Haidian acquired Swiss luxury watchmaker Corum, two years after it bought another Swiss watchmaker, Eterna, to tap Chinese demand for high-end timepieces. And just last month, China’s Sanpower secured the country’s largest foreign retail investment when it bought an 89% stake in department store business House of Fraser.

In a time of unprecedented economic change, it is not surprising that overseas brands with a long history, suggesting values such as quality and permanence, can be particularly attractive to Asian consumers.

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