In a new report, “The future is now: understanding the new Asian consumer,” Accenture estimates that the consumer goods and services industry will grow by as much as $700 billion globally by 2020, with nearly 50%, or $340 billion, of this growth coming from Asia—specifically China, Indonesia, India, Singapore and Thailand. China alone is expected to account for approximately $200 billion, or 60% of the growth in Asia.
“If CPG companies don't take action now, they risk losing out on the new generation of consumers. These companies must couple traditional models with new ones where consumer engagement is digital and one2one, social influence is perceived to be the trustworthy source and shopping is one click away,” said Fabio Vacirca, senior managing director in Accenture’s Products operating group in Asia Pacific. “The entire sales and marketing ecosystem is changing dramatically on the back of the new generation of consumers and pervasive digital technologies. In Asian markets the change is faster and in many cases it means leap frogging the traditional models.”
The report estimates that retail sales across Asia Pacific’s booming consumer markets are on course to top US$10 trillion by 2018, with approximately one-quarter of that amount coming from digital commerce. Yet despite the heavy influence from e-tailers and online marketplaces, the digital commerce market in Asia Pacific remains under-penetrated for CPG companies, particularly in the grocery-product category.
In addition, using knowledge of consumer preferences and their evolving demands, leading disruptors in the market, such as Alibaba, have been adapting by reinventing and tailoring offerings to redefine the value chain and make the consumer their focal point. The report identifies a number of steps that established CPG companies could take to seize growth opportunities and counter the threat of the new players:
• Partnering with e-commerce platforms to reach new consumers/markets;
• Maximize value from cross-border e-commerce;
• Investing in brand building, with integrated marketing initiatives spanning online/offline;
• Adopting a "mobile first" approach;
• Integrating e-commerce initiatives with social platforms to engage consumers and build trust;
• Investigating opportunities for product testing and product development through crowd-sourcing; and
• Leveraging insights from big data to enhance and fine-tune customer interactions across multiple touchpoints.
Despite the market seeing some digital transformation by CPG companies, it is still not enough for many consumers. Accenture’s research shows that consumers are not satisfied with their purchase journeys. Today’s top request, according to the report, is for a single platform where they can enjoy unique experiences that delight and enable their impulse decisions, receive tailored product recommendations that meet their desires immediately and where they are always connected to their favorite brands. According to Accenture, this represents an outstanding opportunity for traditional CPG companies to capture the next wave of growth. By focusing on providing stronger digital commerce they can bridge existing gaps in consumers’ purchase journeys and provide the seamless shopping experiences they’re looking for.
“Technology will continue to evolve and influence how consumers shop in the future,” said Vacirca. “By better using digital technologies, CPG companies can engage with consumers on a real-time basis, allowing the companies to provide the maximum value within the minimum time. This will, in turn, create opportunities for CPG companies to control the consumer buying experience of tomorrow.”