How data are changing the Asia-Pacific retail landscape

Most of these consumers are no longer simply defined by where they live, but are highly fragmented, with rapidly changing preferences as their economic fortunes change. They are also increasingly digital and mobile, sharing their purchasing ideas and preferences via social media.
In yesterday’s world of high communication and transport costs, it was logical to organise primarily by geography: grouping Australia and Indonesia because of their proximity, for example, despite their vast differences in market maturity or consumer behaviour. But nowadays markets must be clustered by analysing their common commercial contexts.
Many developing Asia-Pacific markets are what Accenture would term as “fragmented emerging”. In these markets CPG companies commonly work through distributors to get their products to a hugely fragmented customer base of small independent retailers – the “mom and pop shops”. This makes efficient distribution and coverage very challenging and it can be difficult to obtain good visibility of the customer and end consumer.
Examples that might fit the archetype include much of Southeast Asia, mainstream Africa and much of Latin America.
And just as the markets are fragmented, so are their populations, with CPG companies realising that certain groups of consumers share fundamentally similar needs and preferences that transcend geography.
Luckily, thanks to the increased use of digital and mobile, CPG companies have never had more consumer data at their fingertips to try to understand how best to distribute goods, both within a market and across borders.
However, this is a major disruption to “business as usual” and many companies are struggling to maximise value from their investment in data tools and systems. If used wisely, data analytics can be a key differentiator in today’s competitive marketplace.
This is particularly true in the Asia-Pacific region’s fragmented emerging markets.
In India for example, there are more than 8 million retailers (many local “mom and pop” stores) and 2,000-4,000 distributors, where a single large CPG company can have 6,000-12,000 salespeople and 500-2,500 merchandisers.
Other emerging markets across Asia are similarly fragmented, including Thailand, Vietnam and the Philippines.
With such fragmentation, large CPG companies have very limited market insight and rarely any direct contact with the retailer or consumer. This creates a high cost to serve, and often ineffective trade spend, high sales-force attrition and limited effectiveness of merchandising campaigns.
So what happens when a CPG company is able to use data to hear directly from retailers or even consumers? When a retailer or consumer can message via an app that they are out of stock in their local store or that they want more of something?
In this new world, a company can run personalised campaigns with real-time performance tracking. That company can directly communicate with millions of retailers – large or small – and immediately establish loyalty programmes with them to build and manage the relationship. Suddenly consumer and retailer needs can be tracked – the invisible is visible – and this collaboration changes everything. The operating model shifts.
In this new world, the retailer becomes your merchandiser and the demand-side management is not a passive order taker but rather a strategic planning partner. The possibilities of moving across outlets in a country, between companies within the region and among retailers, distributors and consumers, become endless.
However, a strong strategy requires a focus on the insight that data can provide as opposed to just gathering it.

Fabio Vacirca is senior managing director for products, Asia-Pacific, at Accenture.