Age-old direct marketing gets new clout in Asia

Age-old direct marketing gets new clout in Asia
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First Published: Wed, Nov 04 2009. 12 11 AM IST

Customer contact: A woman shops inside Amway’s sales showroom in Taipei. Dozens of companies are using direct marketing methods to sell their products in increasingly crowded and competitive markets.
Customer contact: A woman shops inside Amway’s sales showroom in Taipei. Dozens of companies are using direct marketing methods to sell their products in increasingly crowded and competitive markets.
Updated: Wed, Nov 04 2009. 12 11 AM IST
Taipei: For hundreds of diners in Taiwan, 22-year-old Sheena Tsai is the billboard for Carlsberg, a Danish beer vying for a slice of Asia’s competitive lager market.
The university student brings beer straight to tables at packed Taipei seafood restaurants with handy facts about Carlsberg’s origin and flavour.
“Some don’t know about it,” said Tsai, who wears a beer-branded blouse to local seafood joints. “They like to meet sellers face to face. This kind of promotion is useful.”
Carlsberg isn’t the only one in Asia.
Customer contact: A woman shops inside Amway’s sales showroom in Taipei. Dozens of companies are using direct marketing methods to sell their products in increasingly crowded and competitive markets. Nicky Loh/Reuters
As major firms see growth potential in the region, many more are seeking a marketing strategy to suit it, giving new clout to the ages-old tool of bringing products directly to consumers.
Dozens of companies, from consumer goods maker Hindustan Unilever Ltd to delivery firms such as FedEx, are now using direct marketing methods to sell their products in increasingly crowded and competitive markets.
Direct marketing, broadly defined, covers any sales technique from pop-up stores and commercial gift bag giveaways to free sample handouts that puts sellers directly in touch with target customers, compared with indirect marketing such as advertising, product placement or sponsorships.
Asian consumers, long accustomed to doing business with trusted family or friends to avoid scams, see contact with direct marketeers as safe avenues to get to study a product in a world of commercial uncertainty, experts say.
“People still reply to direct mail. They want to be marketed to,” said Dominic Powers, Asia-Pacific senior vice-president with marketing firm Epsilon International. “Relationships are very strong, more so than in America, and they get things done.”
Every major firm active in Asia uses both direct and indirect marketing, with the direct portion growing.
Last year, direct sales in Asia increased 5% to $40 billion (Rs1.9 trillion), up from a 0.4% increase in 2007, largely due to expanding markets such as China and India, according to data from market research firm Euromonitor International.
Big in Asia’s direct marketing are alcoholic beverages such as Carlsberg and Glenmorangie Scotch whisky, Coca-Cola Co.’s Glaceau Vitamin Water, delivery firms such as FedEx with pre-existing address databases and common household goods sold by the likes of Amway.
And there’s room for more. Consumption and savings are expected to grow throughout Asia from a rate of 3.1% in 2002 to 4.6% next year, according to an HSBC Global Research report.
Around 48% of the $150.3 billion spent globally on direct marketing will go to Asia by 2012, according to estimates by the Grey Group marketing communications firm.
Direct marketing costs far less than mass advertising, and marketing officials say gives them more bang for their buck.
The 300-member trade organization Sri Lanka Apparel has reached 100,000 people, spending only $150,000, by joining online communities.
The same outreach via conventional advertising would have cost at least $20 million.
“We get a lot of bang out of our buck,” said Sri Lanka Apparel global marketing chairman Kumar Mirchandani.
Taking advantage of the popularity of door-to-door sales in India, 10 years ago Hindustan Unilever began a direct sales scheme in rural areas with populations of less than 2,000. Around 100,000 villages are involved.
Some 45,000 women go door to door with Unilever hair oil, soap, shampoo and cream in baskets or cardboard cartons on bicycles. They bought Unilever inventory worth Rs450 crore in 2008, said Hemant Bakshi, an executive director.
A boom in electronic marketing is expected as Asian consumers adopt the latest technologies faster than peers elsewhere and welcome ads via mobile phone messages or online communities.
Around 60% of Internet users in the Asia-Pacific region have made purchases based on email advertisments, compared with less than half in North America and just over 40% in Europe, Epsilon has found.
By 2012, Asia-Pacific will lead other regions in mobile marketing spending at $7.7 billion versus the global figure of $16 billion, according to a study by ABI Research.
“Direct plus digital is growing, while conventional advertising is definitely not, in terms of budgets and activity,” said Dibyo Haldar of Euro RSCG.
Rina Chandran in Mumbai contributed to this story.
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First Published: Wed, Nov 04 2009. 12 11 AM IST