Knowledge Center: Article

Consumer Markets

Reaching the New Generation of Consumers Requires New Breed of Leaders


Consumer spending in Asia is expected to grow exponentially, much of it driven by a new generation of online shoppers. The number of people connected to the Internet around the world has grown from 1% of the global population in 1995 to 40% last year. By the end of this year, some 3 billion people will be online. Half of them will be in Asia.1

In India alone, there are more than 243 million people connected to the Internet. In 2013, India's online population grew 42%2, much faster than the average 7.2% growth around the world.

UBS estimates that ASEAN now has an Internet penetration rate of 32 percent, or roughly 200 million people. Many of these new Internet users are young lower-income consumers that get online through their smartphones.3 The ubiquitous nature of the Internet has created a new reality for companies that have to adapt to the realities of the modern marketplace if they hope to tap into this huge source of revenue.

Companies have found that reaching this important demographic is key to success. India’s online shopping company Flipkart may be India’s premier example of how to leverage success in this area into a huge business. In June, Flipkart reported that it now has 22 million registered users and that 4 million visit the site daily. That is a significant portion of the 39 million online buyers in India expected by the end of this year4.

This type of success requires a strong social media and digital presence to reach the new generation of consumers that relies on social media to determine where they will spend their money. A company's digital presence often represents the first and only interaction with customers who might learn about products and services through myriad digital channels from old-fashioned blogs, Facebook, Instagram or YouTube, Twitter or Weibo. Online shopping, streaming advertising and, in Asia, facilitating payment on delivery for online purchases makes it easier to reach young people. Effective product bundling is the modern equivalent of McDonald's famous "would you like fries with that?" approach to driving sales.

To put these two things together – young online consumers and an effective digital strategy – companies need a new breed of executives that are increasingly important members of the C-suite or even the board of directors. Their job goes well beyond massaging an online message. Rather, these executives drive innovation and seek to ensure that all of a company's online initiatives and communications create a cohesive front, a digital personality that transcends borders, technologies and platforms.

The work of executives such as Chief Digital Officers (CDOs) and Chief Experience Officers (CXOs) is increasingly vital.

What does Asian innovation look like today?

Malaysian telecoms provider DiGi.Com Berhad is noted for its creative thinking. A case in point is the DiGi-Opera Mini browser, which allows non-smartphone owners to go online. The company also offers the DiGi Simple MasterCard, a prepaid payment card, which helps shoppers without credit buy products online. So what’s the formula for DiGi.Com’s success?

“Capturing market share in a country with very high mobile penetration requires a relentless focus on market execution underpinned by a culture that thrives on innovation,” says Sigve Brekke, Chairman of DiGi.Com Bhd. “DiGi has both these attributes, and stands out in the Malaysian telecoms market with a rare mix of consistent, profitable growth and a knack for innovative thinking that runs deep within the company’s culture.”

Other operational models provide different opportunities for innovation. Taking advantage of the unique experiences of its employees at more than 7,000 7-Eleven convenience stores, Thai company CP All encourages innovation through an annual in-house innovation contest.

Last month, Forbes selected Unilever Indonesia as Asia’s most innovative company, citing its incentivized sales strategies for mom-and-pop stores and lower-income consumers in the ASEAN giant.5 

Where can we find the new breed of leaders?

A recent study by Gartner suggests that as many as a quarter of all companies and organizations in the US will have a CDO by 2015. Companies as diverse as Starbucks and Pepsi are putting in place top-rank executives to manage their digital presence. CDOs often report directly to the Chief Marketing Officer or the Chief Executive Officer.

For their part, CXOs have been part of boards in the UK, Europe and North America for a few short years but they are increasingly sought-after. Their core role is to manage the way users (customers) see organizations. CXOs are key evangelists of company values and products and drivers of innovation.

The right CXO or Innovation Director must have a passion for technology and enough creativity to find ways to use technology to reach more customers. An effective CXO knows how to develop a company image that is suitable for the new modes of communication, how to maintain that image across multiple channels, understands customer needs and can identify gaps that might be filled through innovation.

How to win the future market

Putting a CXO or another executive in charge of innovation is a first step. A second step is for the CEO and the board to understand that the cost of innovation is front-loaded. As with other research and development it is often impossible to say in advance how successful a project will be. Rather, companies have to put the right people in place, set aside budgets and be willing to take risks, knowing that only a portion of initiatives may pay off.

The emerging generation of consumers is loyal only to the brands that stay in step with their fast changing needs. The most successful companies in Asia have revolutionized entire areas of business, from high-technology outsourcing to manufacturing and retail. They have done this by staying at the forefront of global trends.

The challenge now is to stay at the forefront of demographic trends and to understand that the way they do business tomorrow might be radically different from the way they did business yesterday. 


  2. According to the Internet And Mobile Association of India (IAMAI)
  3. Based on estimates by KPMG’s in China’s Connected Consumers.
  4. According to a forecast of online retail by Forrester Asia Pacific.

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