Go digital or lose the Asian consumer: Accenture

  • Asia definitely the growth engine for Consumer Packaged Goods industry
  • Companies need to harness the ‘micro-moment’ to capture consumers
Go digital or lose the Asian consumer: Accenture

MANY industries are describing the Asian market as their growth engine, and the Consumer Packaged Goods industry is no different, according to the latest report by Accenture.
But to capture this market, the industry would really need to harness digital technologies, the research and analyst firm warned.
Consumer packaged goods are the types of items that everyday consumers buy, and which need to be replaced or replenished quite frequently, such as foodstuffs and household goods.
The Accenture report, The Future is Now: Understanding the New Asian Consumer, estimates that the consumer goods and services industry will grow by as much as US$700 billion globally by 2020, with nearly 50% of this growth or US$340 billion coming from Asia – specifically, China, Indonesia, India, Singapore and Thailand.
The report stresses the need for Consumer Packaged Goods (CPG) companies to go digital in order to capture the next generation of digital natives, which is growing up without the need for traditional stores, according to Fabio Vacirca (pic above), senior managing director of products, Asia Pacific, Accenture.
“It is evident that in Asia, there is a leapfrog … with how our clients are engaging with consumers,” he told a recent media briefing in Singapore.
“In Asia, it is clear that digital is growing at speed, faster than the rest of the world, and that the traditional channels are not being used.
“Asia is heading the rest of world for e-commerce as well, in terms of speed, scale, and technologies,” he added.
READ ALSO: Asian ‘xCommerce’ industry worth US$17 trillion by 2019: IDC
Change is all around

Go digital or lose the Asian consumer: Accenture

The shift of Asian consumers from traditional retail outlets to e-commerce has really taken off over the last five to six years, according to Mohammed Sirajudeen, Accenture managing director of digital products, Asean.
“In Asia, we moved from a traditional wet market (pic above) channel to traditional supermarkets and hypermarkets to e-commerce – and all this has happened over the last five to six years,” he said.
“There is an e-commerce boom happening not just in airlines or music – consumers have now moved to buying fashion items and electronic goods online,” he added.
So what do Asian consumers want? According to Mohammed, it is a variety of things which will evolve over time.
“Most of the consumers are saying that time is very precious, and they want digital [technologies] to make their lives easier.
“These expectations are evolving in a dynamic new marketplace which is bringing about a lot of opportunities for CPG companies,” he said.
Today’s customers see shopping as a chore, with the attitude of ‘Give me what I want when I want it,’ where they make a shopping list and want to be able tap into personalised assistance when needed, according to Mohammed.
“Going forward to 2020, consumers will be saying ‘Give me what I want when I need it,’ and more importantly, moving beyond 2020, they will be saying ‘Give me what I want before I want it.’
“Consumers want digital to aid them, where they do not have a shopping list and everything is automated, and companies will actually understand when consumers need a particular product and have it delivered to them.
“It is about digital being integrated into their life’s moments,” he added.
And it’s not just about shopping.
“Consumers want a smart digital assistant who will help with solutions to real-life problems, who will help them get the products when they want them and want them now, who would help with seamless shopping,” said Mohammed.
Thus companies need to focus on a personalised experience that caters for the individual consumer, he added.
Stepping up, lagging behind

Go digital or lose the Asian consumer: Accenture

CPG companies need to step up their game, especially if they want to tap the growth potential.
“The stakes are very high,” argued Mohammed (pic above).
“If you look Asia, there are many new consumers coming in – we are expecting 2.7 billion new middle class consumers coming in by 2030, and in a market like Indonesia alone, 14 million new middle class customers are coming in by 2020.
“This will drive CPG sales to grow from US$3.4 billion to US$4.1 billion, with Asia Pacific dominating the growth, up to 50% of the forecast growth,” he added.
While e-commerce sales in Asia Pacific are set to hit US$2.66 billion by 2020, companies are surprisingly unprepared for this digital revolution.
“Only 5% of companies feel that they have mastered digital to the point of differentiation,” said Mohammed.
“That actually leaves a very big opportunity for growth,” he added.
How can companies step up to cater to the consumer of tomorrow? The answer lies in ‘micro-moments.’
“In our research, we realised that consumers were talking about micro-moments, which are described as ‘I want something and I want it now, and if a company can deliver it to me, it is driving my micro-moment.’
“Micro-moments can work at various parts of the shopping journey – at the discovery phase, comparison phase, the consideration phase or even the purchase phase,” said Mohammed.
Consumers no longer go on a ‘linear journey’ in their shopping, which can now start at any phase, he argued.
“For example, they could be purchasing a shampoo and decide to change their brand – and at that time, they would want the micro-moment to be realised.
“The ‘micro-moment’ will drive the future of e-commerce … it will deliver the unique experiences that will delight and enable loyalty,” he added.
The six steps
CPG companies will need to focus on six key strategies to adapt to the needs of the Asian consumer of tomorrow, with the first being partnerships.
“We believe that CPG companies have to identify key digital partners which can help them build their brands,” Mohammed said.
READ ALSO: Digital trends will kill off lone wolves: INSEAD prof
The second strategy would be seamless delivery from online to offline, while the third would be hyper-localisation, which spells the potential end of massive distribution centres.
“This is one of the most important things we have discovered,” said Mohammed.
“In Indonesia for example, people are saying they want things to be delivered in their area; they don’t want to wait for something that is coming from another part of town,” he added.
Then there is the much-touted mobile-first strategy, which seems obvious from the mobile Internet penetration rates in the region.
The fifth strategy is subscription models, while the sixth and final one would be to use the Internet of Things (IoT).
While the e-commerce boom seems to already have clearly defined leaders with commanding leads in market share, Mohammed believes that the traditional brick-and-mortar store can still compete in the digital race.
“I think there is still a huge opportunity as there are still new technologies coming in.
“These new technologies will allow you to leapfrog some of the older technologies, and I personally believe there is a huge opportunity,” he added.
Related Stories:
What’s Next: Traditional retailers do have an edge
Japanese e-commerce hangover forming in SEA?
Grocers facing ‘Uberisation,’ says HappyFresh
For more technology news and the latest updates, follow us on TwitterLinkedIn or Like us on Facebook.

Keyword(s) :
Author Name :
Download Digerati50 2020-2021 PDF

Digerati50 2020-2021

Get and download a digital copy of Digerati50 2020-2021