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Lim Khai Hong

Understanding cultural differences when expanding your brand to reach new markets

Introducing your brand to a new market, a new audience, is always daunting. How will they receive it? While geographic boundaries seem diminished with the world wide web, cultural nuances are still significant. This is especially true for Asia, viewed as the next frontier with limitless potential, made up of different cultures, history and people. 

The success of Taobao in some Southeast Asian (SEA) markets is a good testament of how understanding locals can make a difference. Besides attractive pricing, Taobao rose up the ranks to compete with the likes of eBay and Amazon in SEA with some interesting features. Since customers generally view online shopping as an extension of their brick-and-mortar experience, Taobao incorporated functions like instant feedback and connections via instant messaging, to even allowing customers to haggle for prices for bulk purchase from the get go. This give customers a familiar shopping experience. So yes, some of us really love a bargain!

Here are some tips on launching your brand in a new market.

1. Understand the market before entering: Do your research

Given that this is a huge business decision, brands need the local context to be relevant to their new customers. We have seen numerous exits in Singapore–Fancl, Wendy’s, Carrefour, Toshiba, etc. Case studies pointed to a few issues

  • Insufficient market size to sustain their operating model
  • Insufficient brand differentiation from strong competition
  • Unsustainable operating costs, incl. rental and manpower

With early research and detailed planning, these issues should surface before market entry. How can brands thrive in new markets? Some brands adjust operating model, some tweak their offering and others reach out to a different customer base. From any perspective, good local insights and conscientious planning won’t hurt.

2. Consider partnering a local brand agency or form a local team

Introducing a brand is not so much about sharing information about you but the ability to connect with your potential customers. Before the brand launch, consider the different behaviours, languages and customs. Oftentimes, hiring a local agency or forming a local team can help greatly. They can address questions, such as

  • Are my marketing materials suitable?
  • How would potential customers relate to my brand?
  • How should I adapt my brand for local tastes and nuances?

Top faux pas

  • Using auto-translate
  • Using slangs or puns in the local language carelessly

My favourite example is the classic Electrolux’s slogan “Nothing sucks like an Electrolux”…. Well, if you say so!

3. Taking advantage of local customs

I visited Hong Kong pre-Mid-Autumn Festival and noticed there are bakeries at every corner of the street, and of course, everyone was selling mooncakes. A chatty staff admitted that Mid-Autumn Festival sales fetch up to 3 times their normal takings.

While most shops differentiate with flavours and use of exotic ingredients like flowers or chocolate, some use the opportunity to market their signature offerings, e.g., Haagen Daz’s ice-cream mooncakes and Starbucks’s coffee mooncakes.

Meanwhile, heritage bakeries like Kee Wah and Maxim use the occasion to reinforce brand messages of family bonds, togetherness and how traditions connect people. This brand message can extend to Mother’s Day, and other festivities to build an emotive connection with customers.

Closer to home, Grab launched GrabAutumn, a campaign advertising the service of delivering mooncakes to your loved ones for you (so you don’t have to), which truly highlighted their core proposition of timeliness and convenience.