Tips For Retail Strategy In Southeast Asia

At Asia Circles, we often get asked by prospective clients “What’s different about Southeast Asia?” and how do you approach launching a brand in these markets, to ensure success?

We’ve sat down with founder and CEO, Benji Lamb, to talk us through a general overview of how Asia Circles approaches launching brands, and highlight some key points for any entrant looking to achieve success.

No time for the full interview? Skip to the end for the key takeaways.

Disclaimer

This transcript has had minor edits for clarity, and brevity. Benji is more than happy to talk at length on this subject!

When launching a brand into an entirely different market, where do you start?

Physical retail is the bedrock of Southeast Asia, and when launching, it’s used as a price structure and benchmark for a pricing strategy.

E-commerce, if undercutting retail by too significant amounts, undermines long-term brand equity. It has to be a feasible long-term project.

[In retail] we then look at in-store activations, store barkers, end of aisles, and look at exclusivity with retailers for better deals on the rate card, on deals for in-store activations and better offers for listing fees.

With physical retail and margins first, how does this fit in with e-commerce and an omnichannel strategy?

Consider making a retailer a success first, before broadening to omnichannel, and considering offline to online.

[For example] There is a strong propensity in Vietnam for online ordering to a physical store because it’s a trustworthy intermediary and interface. Consider the official e-commerce with such retailers and how your digital strategy can support that launch.

How does it emotionally resonate? You know, brands that win will be emotionally intelligent in these markets.
Benji Lamb

Would you launch an e-commerce strategy via the retailer’s platform first then?

Yes, because of their reputation, equity, and platform. How could you leverage that in a win-win way, a win-win fashion, and we’d use this.

Once you have a foundation for the launch, where do you go from there?

In-store promoters, and product training need to be considered. [We look at] different forms of ad activation in-store like ceiling hangers, floor stickers, gondola, end of aisle, barker’s, and different format display units. Everything within the store is monetized so you’ve also got to look at squeezing the juice out of any in-store activation.

How does e-commerce sit alongside that process?

E-commerce needs to be complimentary to the physical retail. Offline to online, in Southeast Asia you have to consider KOLs. KOLs going into stores, pulling products off the shelf, taking the product home, using it over like a 30-60 day challenge in their own life, embedding it within their lifestyle.

But that initial point of contact with the retailer is really important.

Do retailers in Southeast Asia support this, or is this an external process?

Some retailers have live stream studios so you can do official live stream studio collaborations. [In addition] KOCs, kind of smaller independent micro communities, are also good for sharing within social communities of the product.

How do you adapt the marketing for Southeast Asia, and what should brands look for during their launch process?

What’s the value of the product? What’s the message of the product? What does the product stand for? How does it emotionally resonate? You know, brands that win will be emotionally intelligent in these markets.

Look for [advertising] in a locally nuanced way, what can you do to grab headlines, capture attention.

Relationships are also key. Relationships with retailers, relationships with directors and senior buyers and category managers. It’s a people business, people to people, and these retailers, from my experience, care about people.

How do different brands pick the right retailer for launch?

I like looking into the best category fit.

So if you care about people, and you care about the brand, and you see a value add, put a category fit, not just within category but also across category based on the retailers’ priorities. For example, ethics, eco-credentials, beauty or healthcare splits.

So it’s key to understand the category divisions of the retailer and how [the brand’s products] perform in those. Also, total store numbers, and number of stores for launches are considerations. For example, their [the retailers] top x% performing stores — where you’re going to prioritize your budget — and how, in what locations and what strategic locations.

So an understanding of store performance data is really crucial.

What do retailers look for when deciding to accept a new brand?

Building social channels, ensure you create content, so hiring a contact executive who can build out your social channels.

Retail managers who come with pre-existing connections and, you know, strong templates for launch.

A really strong marketing deployment plan. Retailers need to see you know digital activation, offline activation, they need to see a vision, and it’s also for omnichannel growth of the brand.

Multiple retailers, or sign an exclusive deal?

To be exclusive or not be exclusive depends on so many factors like size of the prize within a retailer, position of that retailer, support network of that retailer, how it fits within their product portfolio, their gaps in products — any gaps in their shelf.

Just to focus on general trade, pricing, discounting does not build brand equity
Benji Lamb

We talk a lot about omnichannel growth, should brands focus on multiple channels from the beginning?

It’s most crucial to make a project work before trying to sell in many many omni-channels.

Step by step, make something work, and then you can push into a virtuous cycle of using that positive data to leverage more opportunities. Adapt, and see how it then steers the project. It’s a people business, and the formats are innovative.

What’s the main difference western brands need to be aware of between retail in Asia and what they are used to?

Retail formats in Asia are so innovative. You know, this kind of health and beauty format. For example, the Guardian upgraded health and beauty format. It’s one of the most innovative I’ve seen in the world.

From color palette to product display. So these are serious premium kind of rental space. These are like premium rents really in a way for brand equity and should be considered as a bedrock of a serious modern trade entry strategy to Southeast Asia.

Picking the retailer with the best margins isn’t always appropriate then?

Just to focus on general trade, pricing, discounting does not build brand equity, does not build a price structure, does not allow for transparency and is often associated with one container market. Pocket, reinvest, pocket.

Any final tips, is there anything that western brands might overlook in the process?

In the overall strategy, sometimes small things that have a big effect get missed. Usually around in store marketing.

Discounts, offers, coupons, festivals, promotional events, support with that, whether that be exclusive product, collateral, pricing structure, leaflets, co-branded, POSM, point-of-sale marketing.

Ohhh, how are you designing your POSM? Is it aligned with the retailer’s needs? Does it fit with the specifications and dimensions of the retailer, as it will need sign-off from the retailer and then manufacturing that locally in an optimized way, then also fitting it in an optimized way.

This [additional cost] is why it’s even more important to pick the best performance stores.

Key Takeaways from the Interview with Benji Lamb on Retail Strategy in Southeast Asia

Retail as the Foundation: Physical retail is crucial in Southeast Asia and serves as a benchmark for pricing strategy. E-commerce should complement, not undercut, retail pricing to maintain long-term brand equity.
Focus on Retail Success Before Omnichannel Expansion: Start by making retail partnerships successful before expanding into omnichannel strategies. In markets like Vietnam, integrating online strategies with trusted physical stores can be highly effective.
Leverage Retailers’ Platforms: Launching e-commerce through established retailers can capitalize on their reputation and reach, creating win-win scenarios for brand visibility and growth.
Maximize In-Store Activations: In-store marketing tactics such as displays, promotions, and ad activations are essential. Every aspect of the in-store environment should be optimized for maximum impact.
Incorporate KOLs and KOCs: Key Opinion Leaders (KOLs) and Key Opinion Consumers (KOCs) are vital in bridging offline and online experiences, helping to embed products into consumer lifestyles.
Build Strong Relationships: Success in Southeast Asia’s retail market is heavily relationship-driven. Establishing strong connections with retailers, buyers, and category managers is key.
Strategic Store Selection: Focus on launching in top-performing stores and prioritize your budget accordingly. Understanding store performance data is critical for informed decision-making.
Innovative Retail Formats: Southeast Asia boasts some of the most innovative retail formats globally. Brands should consider these premium spaces as central to their market entry strategies.
Holistic Marketing and POSM Alignment: A strong marketing plan that includes social media, in-store marketing, and POSM (point-of-sale marketing) aligned with retailer specifications is essential. Local optimization is key for successful implementation.
Step-by-Step Growth: Brands should focus on succeeding in one channel before expanding. Gradual, data-driven expansion leads to sustainable growth and better opportunities.
Avoid Over-Reliance on Discounts: General trade practices like heavy discounting do not build brand equity. Focus on creating a transparent pricing structure and value-driven promotions instead.