To stay relevant in today's "disrupted" economy, brands in Asia will be looking at stronger investment in the region's start-ups, predicts Peter Dingle.
Thinner. Cheaper. Better. These are the promises that the hot new innovative start-up ecosystems challenge the big enterprises with today.
As consumers we are no strangers to these success stories. Amazon disrupted McGraw-Hill's book publishing business. Netflix disrupted Blockbuster's home movie rental business. Google disrupted Omnicom's advertising business. But what will 2015 look like?
My first prediction for 2015 is that the world’s biggest brands will climb aboard this disruption bandwagon themselves, the way venture capital has been doing for the last 40 years. The brands that do this in a genuine way will win both hearts and minds, as well as margins.
Great brands will win mindshare in a crowded cluttered omni-channel world. They will win younger-generation customers and they will win against their slower competitors who continue to sit back, wait, and fail to move when the timing is right.
You see, a brand is a promise. A brand represents the security of knowing that your money is always safe wherever you travel (American Express, HSBC, and ANZ). A brand is knowing that you will always look and feel your best, right when you need too (Maybelline, Dove, Victoria’s Secret). A brand represents the pride you have as a mother knowing that your family will be clean, healthy, and look sharp at school or at the office (Tide, Persil, Comfort). A brand can represent happy childhood memories of playing at the beach in the summer (Coca-Cola, Zinc, and Hawaiian Tropic). A brand is the peace of mind that the environment will not be worse off because you filled your tank with petrol (BP, Shell, Caltex).
In a world of new business models, disruptive innovations, agile competitors, and mega trends, brands that were created only yesterday can struggle to keep their heads above water today. Why? Because consumers have become weary of brands that say a lot but do little.
Today, many brands are struggling to keep their promise relevant. New business start-ups are setting a fast pace of innovation that established brands sometimes find threatening.
The new generation of consumers (Millennials) find it hard to relate to brands that will not engage directly on topics like sustainability, the environment, or education.
Here in Asia, this dynamic is compounded by the rapid – and occasionally erratic – evolution of consumer behavior. The on- and offline advertising agencies brands have traditionally turned to for support are sometimes stuck, offering cleverly crafted words without a call to action that resonates with today’s customers.
Asia-centric problems are not likely to be solved by Silicon Valley giants. Social business initiatives like TOMS Shoes, have grown dramatically in the last five years, but businesses that solve real world problems still make up less than half of the ideas being thought of by entrepreneurs.
Today we are really good at solving first world problems. Like Uber for more convenient taxi rides and Airbnb for renting out our homes. The brainpower and technology coming together to make rich people live better is incredible. There is opportunity today to use those same powers for real good. Whether it is in new solutions to solve the challenges of basic safety, security, or stability of life – such as tsunami warnings, helping farmers grow, harvest, or sell their crops, or increasing access to basic health care.
It could even be through ways entrepreneurs look at enriching lives through educating teachers on how to use technology to encourage learning, give students better access to learning materials, or enabling or finding more cost-effective ways for migrant workers to send money home using mobile phones. Asia-centric problems will be solved by those of us here in Asia.
In 2014 we saw brands step into crowd funding – GE and P&G. We have even seen brands run their own accelerators: Intel and Disney. What we will see in 2015 are Asia brands stepping up and driving solutions from Asia, for Asia, by Asia. AIA's recent decision to host a 12-week program for up to eight start-ups to come to Hong Kong to accelerate their health tech and wearable businesses will be one of the first. But I’m sure it won’t be the last.