Globalization and the new players Ambitious small and medium-sized enterprises (SMEs) in Asia are seeking to expand their operations across the region – and beyond

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Amid the frequently cited GDP and FDI growth curves and record-breaking IPOs, another commercial trend in Asia tends to gain less attention. The proliferation of homegrown SMEs whose ambitions now reach beyond their own markets is one of the region’s most compelling business stories.

These emerging players have applied their local market expertise to target growing consumer spending and benefit from diversifying brand awareness and new purchasing patterns. They represent a new force in Asian commerce rejecting the old “product-centric” approach in favor of customer-focused goals as their home markets develop. In addition to beating their competitors, they are increasingly focused on corporate image and reputation. They understand that long-term success is allied to customer satisfaction, and that improved service delivery has a direct impact on sales and profitability.

Sustained domestic growth has given these new Asian dynamos an appetite for expansion into regional markets as a stepping stone to achieving a greater global presence. Preparing for expansion is not easy, however. Close geographical proximity to other markets within Asia does not obscure the fact that companies seeking to operate across borders face stiff challenges as they are often as complex to them as they are for Western companies.

The availability of local partnerships and networks is key to the success of emerging market players in their home markets. By contrast, the lack of such relationships in foreign markets is one of the major barriers to entry for them to expand into new markets and represents a major motivation to form partnerships with Market Expansion Services (MES) providers.

Simultaneously, fierce competition between local and multinational players in Asian consumer markets, the unfolding challenges of digitization and mobile commerce, and strong labor and resource cost pressures are influencing companies to focus on their core competencies. In addition, awareness of the value of customer relationships and the need for up-to-theminute market insights mean Asia’s expanding SMEs are turning to MES providers to support their next moves, even in their home markets.

Focusing on added-value activities

In recent years, aspirant Asian companies have realized that they can best serve their customers and make the best use of their talents by focusing on their strengths and outsourcing all other processes. Exports between leading emerging markets are driving the global growth in Market Expansion Services. MES providers place strategic emphasis on activities that add value, focusing in particular on business growth and front-end processes, such as marketing, field marketing, sales, customer services and support.

The customized services offered by MES providers facilitate effective interaction between clients, customers and even end-consumers in home and foreign markets in response to clients’ growing needs for regional solutions. They provide access to the extensive array of consumer and market intelligence and leading-edge technology required to compete in complex sales markets, increase market share, improve market coverage, deepen market penetration, lower fixed costs and reduce complexity.

Having achieved success in their domestic markets, Asia’s emerging SMEs are following the example set by global multinationals before them and looking beyond their national borders to tap lucrative growth opportunities. As they do so, the door will open wider for MES providers, who establish the footprints and infrastructures and provide the long-term support that enable Asia’s thriving young businesses to successfully penetrate new markets.

Taking on the competition:
Hi-Q Food Products

Headquartered in Thailand, Hi-Q Food Products is a producer of canned food products, sauces and ready-to-eat meals. The brand was looking to expand to other countries in South East Asia, and in 2013 DKSH and Hi-Q were introduced by one of their local partners in Myanmar.

Since the collaboration with DKSH began, Hi-Q has enjoyed double-digit growth in Myanmar. DKSH has a network of unique scope and depth covering more than 28,000 outlets in Myanmar, and also has a sales team on motorbikes to serve even the most remote mom-and-pop store in the country.

Less than two years after partnering to expand Hi-Q’s business in Myanmar, DKSH and Hi-Q extended their relationship to include Cambodia and Laos. Close cooperation between the teams in each country ensured that DKSH understood the company’s expectations, and enabled the implementation of successful launch strategies tailored to the preferences of local consumers.

Competing against products by well-known western companies, Hi-Q is now recognized as one of the key brands in its category in each market. This is thanks to the benefits of deep local market knowledge and teamwork across borders, which are important ingredients in Hi-Q’s ongoing success.

Real-time insights:
OldTown White Coffee

Celebrating its 10th anniversary in 2015, OldTown White Coffee is a Malaysian operator of coffee shops and is the world’s largest white coffee producer. DKSH is the exclusive provider of Market Expansion Services for OldTown White Coffee in Malaysia, and helped the business to duplicate its success in Singapore, Taiwan and Thailand.

Modern trade retailers, like hypermarkets and supermarkets, operate centralized distribution centers and inventory management systems. Buying is done at headquarter level, and stores are automatically replenished from the distribution center. OldTown White Coffee asked DKSH to help improve individual store performance and influence sales at its outlets in Malaysia.

Through its field marketing joint venture, DKSH Smollan Field Marketing (DSFM), field marketers were stationed in modern trade stores across Malaysia. The field marketers were equipped with mobile devices that run the proprietary SMART software.

After analyzing the situation in the stores, the results were shared in real-time with managers of DKSH, OldTown White Coffee and the stores. For the first time, the store managers and line buyers at headquarter level had access to accurate store-level data and insights that enabled them to quickly spot trends and take action accordingly.