July 11, 2016
What’s Next?: Asian Markets
‘What’s Next?’ is pleased to interview communications veteran Bob Pickard who — over 13 years based in Korea, Japan and most recently Singapore — has built PR consulting businesses across 20 Asia Pacific markets.
Does the Obama trip presage a new era of closer trade relations with Asia – or are the economic and cultural barriers between the U.S. and Asia too significant to overcome in the near term?
In recent years, China has replaced the U.S. as the largest trading partner of almost all Asian countries, so they are feeling increasing pressure to follow the money and fall into line with Beijing’s policies. America’s so-called ‘pivot’ is so far seen in Asian capitals as being a rhetorical stance rather than as anything substantive. The long-term ability and willingness of the U.S. to engage with Asia — and be an effective alternative to Chinese influence — is doubted across much of the region. TPP is perceived as a test of American resolve to be a force in Asia’s future. Alas with the trade agreement’s outlook looking murky at best, Asian countries will be inclined to tilt towards Beijing because they will be gradually pulled into China’s mercantile orbit — e.g. through their new ‘Silk Road’ initiative or Asian infrastructure bank — which are being developed to advance China’s ambitions. Asian nations do not want to be dominated by Beijing, but when they look in disappointment at an increasingly inward America with its infamous political dysfunction, the region is increasingly resigned to Chinese hegemony.
As you analyze Asia at the moment, what are the most promising opportunities or business trends for Western firms?
In addition to sectoral variation, it very much depends on what part of Asia we are talking about. China, India, Japan, Korea, and southeast Asia are all very different markets. In many ways, ‘Asia’ is an artificial construct where various countries are aggregated into a ‘regional’ category to suit the organizational exigencies of multinationals operating across vast and diverse geographies. Despite perceived American decline in Asia, U.S. companies are still admired and their brands enjoy a reputation for quality and innovation which gives them an awesome ‘soft power’ and outsized cultural influence. Western MNCs face a lot of competition from surging Asian upstarts, but American brands can compete and thrive if they continue to leverage their marketing prowess while communicating their alignment with the societal imperatives of the countries in which they operate. In the past U.S. companies — especially ‘big pharma’ — had the reputation of extracting profits from Asia while contributing little or nothing in return, so their investment in corporate social responsibility within Asian markets should pay handsome dividends going forward.
What should smart companies being doing to enhance their market presence in Asia and the way they go about pursuing business opportunities?
Chinese companies are often accused of competing with predatory pricing, so American companies need to keep competing on quality. Chinese companies are now seen as even more confiscatory and extractive than American ones were in the past, so U.S firms can compete as the companies that Asians want to welcome to their communities as responsible corporate citizens. American companies have suffered a bulldozing reputation for aggressive one-way ‘global’ communication pushed from the U.S., so now they can evidence their ability to listen and engage in two-way conversations with people who they are believed — through the very fact of dialogue — to actually respect and regard as important. American business is often too ‘transactional’ for Asian sensibilities, where the clammy dynamic is ‘contract first, then relationship.’ Focusing on people relationships above all else and then the money is the correct sequence for foreign companies who want to get Asia right from the start.
So what’s next for Asia business? If you had to counsel a North American or European company to do one thing in Asian, what would that one thing be?
Rather than resist the inevitable, Western companies should embrace and channel the rise of Asia into what they are doing globally. For many years, the dominant trend in Asia for multinationals was the import of Western money, ideas and people into the region, but now we’re starting to see these flows go in the reverse direction. Companies can try and swim against this inexorably rising tide or they can surf the wave successfully. Maybe that is why just about every month we see major Western multinationals anchoring important international headquarters and corporate functions into Asian centers like Singapore, Hong Kong or Shanghai (where they develop Asian talent and then send them overseas for global career development).
One hundred and ninety-eight of the FORTUNE 500 are now companies based in Asia, and they have U.S. multinationals in the crosshairs. Most of these next-generation multinationals remain unknown on a global basis because (unlike their U.S. rivals) they have not yet transcended their home markets aided by massive investments in worldwide marketing, including modern public relations and corporate communications. These MNCs plan to imitate and amplify what Western companies are doing and that includes using public affairs and PR to build their image and protect their reputation. Asia’s 198 will become the first wave of companies to become world famous in a social media age, so I would advise American companies to double down on digital. While Asian companies take aim at Facebook and Twitter in the West, American companies should be addressing Asian markets through rising social messaging platforms like LINE in Japan, WeChat in China, Kakao in Korea.