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Asia Consumer Goods Review 2020/2021
Right Place, Right Time
There is no sugar coating the global impact of Covid-19 in 2020. The loss of life, family separation, business closures and increased unemployment were nothing short of catastrophic. But amongst all the doom and gloom that blanketed the world, certain companies within the consumer goods sector were financially untouched. In many situations, they grew profits and market share in 2020. Some may call it “right place, right time,” while others, Presidents, CEOs, and Managing Directors from across the world, will say that they were “lucky” to have come out of 2020 unscathed and that they sympathise with those who did not.
Earmarked for Travel
This weekend, my wife and I reflected on 2020, which included taking stock of our major 2020 expeditors. While we didn’t purchase flights to Australia, 5-star hotel rooms or Whistler lift tickets, there was a significant amount of money spent on consumer goods for our apartment. And based on the feedback I have received from my clients, candidates and friends, we were not alone.
Thus, our earmarked travel dollars mainly went to the fine people at Dyson, DeLonghi, KitchenAid, Midea and Le Creuset. The lack of holiday travel gave us the opportunity to upgrade and replace several items in the kitchen, as I took on the role of Executive Chef for Sunday evening meals. Our new Dyson V11, aka The Beast, gave us a true sense of comfort that our flat was Covid-clean as we vacuumed floors and carpets daily. Our outgoing air conditioning unit was replaced by a machine built by the Chinese powerhouse Midea, which worked like a dream and was incredible value for money.
Consumer electronics were also on the list at Chez Parkes as we upgraded our Netflix monitor to a 65’ LG, bought a number of gadgets from Logitech to make working from home that much easier. We kept the Apple share price rising with a new iPad for my 5-year-old, so he could enjoy endless hours of Zoom calls with teachers and classmates.
Based on market commentary and investor reports, it is not difficult to make a list of other organisations that navigated and accelerated through 2020. Aside from the company names listed above, there are several other global consumer brands that saw exponential growth in certain product categories last year in the Asia region. Tempur-Sealy, Miele, B/S/H, Brita and Blueair all played a key role in the Asia Consumer Goods growth story. Being connected, being clean, being comfortable, being safe and being home were the driving trends of 2020.
My Home is My Castle
I have always admired and compared places like Korea, Taiwan, and Singapore to my home country of Canada, where the home is considered a castle; the contents and comfort of the home, from the kitchen to bedrooms and bathrooms, are as important as the location itself. In 2020, it appeared that China and Hong Kong have fast-forwarded toward a similar mentality. Being seen in a Prada suit or purchasing a pair of luxury pumps from Jimmy Choo might not be as attractive to those working from home, as compared to ordering a 5-star meal for a Saturday dinner from the comfort of your sofa. I see this shift as a long-term trend across Asia as consumers reflect on 2020 and re-evaluate the importance of their home and what they put in it.
Like a report that I wrote in Q3 2020, there are still many question marks surrounding consumer spending in 2021. Global headquarters in the US, UK and Europe are still relying on Asia to drive growth in 2021. China remains a critical part of this growth as consumers from Shanghai to Chengdu and Shenzhen to Beijing continue to spend on upgrades for their flats and homes. As the larger Southeast Asia markets rebound, we expect to see a change in consumer spending behaviour over the long term as more money is spent on home comforts and appliance upgrades.
Glocalisation and a $2,500 Mattress
So, what does this mean for the job market and talent trends? Well, I would be lying if I told you that I had the perfect answer.
Strong and empathetic leadership at the GM and Managing Director levels will be critical as we move through 2021 and beyond. Many consumer goods organisations had put a hold on executive hiring: relocations, replacements, upgrades. Covid-19 directly impact on the traditional hiring method for many MNCs which led to a mindset of “better the devil you do than the devil you don’t.” Companies preferred to stay with the person they had in the GM or MD office covering Asia, rather than make a strategic change or upset an already-fragile ecosystem.
Glocalisation continues to dominate the shortlist as companies push for Asian leadership or Asia market experts to manage regional P/L’s. Hiring or relocating expensive expats from other parts of the world is no longer wanted or needed by the top brass in MNC HQ or company shareholders. Deep insight into local markets and the minds of the Asian consumer will continue to trump overseas hiring./p>
Unless you have been living in a deep dark hole for the last decade, you will realise that the two letters D and I are not going away anytime soon. Diversity & Inclusion (D&I) remains a top priority for companies as male talent continues to dominate leadership positions across Asia. It is the responsibility of companies and their headhunting partners to go beyond the brief and seek out talent to create a diversified list of top-quality talent for executive-level roles.
I expect to see is the continued demand for high-quality E-commerce and Digital talent in non-traditional product areas. Previously, consumers would not have dreamed of buying a mattress on-line. They would have gone to a retail store to test-drive it (lay down, roll around, stretch out) before making the purchase. The same would have applied to refrigerators, washers, dryers and audio and visual equipment. But this is no longer the case for many folks. Consumers are happy to read consumer reports, price compare, make an educated decision and purchase a US$1,200 wash machine from Miele or a US$2,500 mattress from Tempur Sealy on-line.
R&D and New Product Development (NPD) talent is also an area where I expect continued demand. Asia for Asia or China for China products continue to be in trend. Furthermore, Global MNCs look to build or rebuild key R&D hubs across the region to be closer to manufacturing, OEM partners and a massive consumer population across the mature and developing markets of the Asia region.
MOVERS AND SHAKERS
Executive hiring and senior promotions slowed but did not stop in H2 of 2020 or the initial part of 2021 in the consumer goods sector. Below is a shortlist of some of the key talent movers and shakers:
- Samsonite: Paul Melkebeke was promoted to President, Asia Pacific & ME after the departure of Subrata Dutta. (Hong Kong)
- Sound United: Thomas Hong returned to the consumer goods sector, joining Sound United as the Greater China GM. (Shanghai)
- Tupperware: Ken Yeung left Pepsi to take on the role of President – China & Vietnam for Tupperware. (Guangzhou)
- Mattel: Andy Clempson returned to Mattel in September 2020 as the Head of Regional Accounts, APAC. (Hong Kong)
- Villeroy & Boch: Hong Li, after more than a decade with Kohler, moved to V&B as the Managing Director for APAC. (Shanghai)
YEAR OF THE OX
A late Chinese New Year has slowed the market slightly, but I have every hope and expectation that this year will be a better, safer, and more prosperous year for everyone. I hope the Ox, the hardworking zodiac sign, brings wealth and health to all.