2024亚太消费品市场研究-英

ResilienceAmidDisruption:How

SomeAsia-PacificIncumbentsAreOutmaneuveringInsurgentsAnalysisof23consumerproductgoodscategoriesacross11Asia-Pacificmarketsrevealsanuancedreality.By

Jichul

Kang,

Gerald

Tan,

Weiwei

Xing,

and

David

ZehnerAuthorsandacknowledgmentsJichul

Kang

isa

partnerwholeadsBain

&

Company’sConsumerProductspracticeinSouthKoreaandisbasedinSeoul.You

cancontacthimbyemailatjichul.kang@.Gerald

Tan

isa

partnerwithBain

&

Company’sConsumerProductspracticebasedinSingapore.Youcancontacthimbyemailatgerald.tan@.Weiwei

Xing

isa

partnerwithBain

&

Company’sConsumerProductspracticebasedinHongKong.You

cancontactherbyemailatweiwei.xing@.David

Zehner

isa

seniorpartnerwholeadsBain

&

Company’sConsumerProductspracticeintheAsia-PacificregionandisbasedinSydney.

You

cancontacthimbyemailatdavid.zehner@.Theauthorsextendgratitudetoallwhocontributed,includingBrunoLannes,CharlotteApps,RaviSwarup,NinaKaspar,PraptiSahni,ZaraLightowler,

Miya

Wang,YifeiGao,andRanqiLiufromBain.Copyright©2024Bain&Company,Inc.Allrightsreserved.ResilienceAmidDisruption:HowSomeAsia-PacificIncumbentsAreOutmaneuveringInsurgentsAt

a

GlanceOuranalysisof23consumerproductgoodscategoriesin11Asia-Pacificmarketsfrom2018to2022showsthatwhileinsurgentshave

madesignificantinroads,manyincumbentshave

main-tainedorevenincreasedtheirmarketshare.Nosinglecategory

ormarket

factor

explains

thesuccess

orfailure

ofincumbentbrands.

Channeldynamicsseemtobemoreinfluentialthancategorycharacteristics.Butwhatmattersmostishowincumbentsmanagetheircategoriesandbrands.Successfulincumbentsblendtheirinherentstrengthswithinsurgentstrategies,leveragingscalewhileembracingagilityandinnovation.The

rise

and

reinvention

of

established

Asia-Pacific

CPG

brands

amidinsurgent

threatsWe

have

allheardthenarrative—insurgentbrandsareontherisewhilelargeincumbentbrandsfaceanincreasinglygloomyfutureduetofallingbarrierstoentryandthrivinginnovation.However,Baindataanalysisacross23

consumerproductgoods(CPG)categoriesin11

Asia-Pacificmarketsfrom2018to2022revealsamorenuancedreality.Whileinsurgentbrandshave

madeinroadsincapturingmarketsharefromestablishedbrands,thistrendisnotall-encompassing.Despitethegenuinethreatposedbytheseemergingbrands,manyestablished

brandscontinueto

achievesuccess.

Withstrategies

specifically

tailoredto

theirstrengthsandmarketdynamics,

incumbents

canthrive

even

amidthegrowingpresence

ofinsurgents.We

studied

253

category

andmarketcombinationsinAsia-Pacific

over

five

years.

We

foundthatwhilelarge

incumbent

brandslost

in112

cases

(defined

aslosingmore

than1

percentage

point

ofmarketshareinaggregate),incumbentsheldsteadyin72casesandwon(gainedmorethan1percentagepointofmarketshareinaggregate)in69

cases.Therewasnosinglecategorywhereincumbentslostshareacross

every

Asia-Pacific

market,nora

singlemarketwhere

theylost

shareacross

allcategories(see

Figure

1).So,whileinsurgentshave

gainedgroundinmoresituationsthanincumbentshavegained,theresultsshowsignificantvariationdependingonthespecificmarketandcategory.1ResilienceAmidDisruption:HowSomeAsia-PacificIncumbentsAreOutmaneuveringInsurgentsFigure

1:

It’s

truethatinsurgentsaresucceeding—buttherearemanyexceptions,andincumbentwinnersaboundMalaysia

Philippines

JapanIndiaChinaVietnam

Indonesia

Australia

Singapore

ThailandSouthKoreaBeerSpiritsWineAlcoholicbeverageBathandshowerColorcosmeticsFragrancesHaircareBeauty

andpersonal

careOralcareSkincareConfectioneryEdibleoilsMealsandsoupsFoodMilkformulaPetfoodSavorysnacksSweetbiscuitsLaundrycareHome

careNappies/diapers/pantsBottledwaterCarbonatesNon-alcoholic

DrinkingmilkbeverageproductsEnergydrinksJuiceWin(incumbentsaggregatesharegain>1pp)Stable(sharechangewithin±1pp)Lose(sharelose>1pp)Notes:pp=percentagepoints;Incumbentbrandsaredefinedastop10brandsintermsof2018marketshareineverycategoryxcountry,excludingbrandsthatnolongerexistin2022;MarketshareintermsoftotalvalueRSP

foralcoholicbeveragesandretail/off-tradeRSP

forothercategoriesSources:Euromonitor;Bainanalysis2Channel

dynamics

seem

to

be

more

influential

than

category

characteristicsOuranalysisof11

Asia-Pacificmarketsshowsavariedcompetitionpatternbetweenincumbentsandinsurgents(see

Figure

2).Notably,

SouthKorea,Singapore,andChinaemergeasthemostfavorableenvironmentsfornewentrants.Thistrendcouldbelinkedtotheirthrivinge-commercesectorandwell-establishednetworksofthird-partysuppliers,makingtheseregionsparticularlyconduciveforinsurgentgrowth.SouthKorea,forexample,standsoutasoneoftheleadersintheAsia-Pacificregionfore-commercedevelopment.Thecountrywitnessedanimpressivee-commercesalespenetrationofapproximately34%

in2022.Thismarketisalsodistinguishedbyitsrobustinfrastructureofthird-partysuppliers,towhichsmallbrandscanoutsourceelementsoftheirvaluechain.Suchanecosystemsignificantlyreduces

thebarriers

toentry

fornewbusinesses,

intensifyingthecompetitivepressure

onestablishedcompanies.Thisheightenedcompetitionisreflectedinlargeincumbentslosinggroundin16ofthe23

monitoredcategories.Incontrast,Malaysia,thePhilippines,andIndiaarethemostfavorablemarketsforincumbents.Thistrendcanbeattributedtothedominanceoftraditionaltrade,especiallyinthePhilippinesandIndia,andtherelativelylowpenetrationofe-commerce.Thecomplexchanneldynamicsinthesemarketscreateachallengingenvironmentfornewentrants.Figure

2:

SouthKorea,Singapore,andChinawerethemostinsurgent-friendlymarkets;Malaysia,thePhilippines,andIndiawerethemostincumbent-friendlyIncumbent

brands'

performance

in

23

tracked

categories,

by

country

(2018–22)Total

numberofcategories:100%2323232323232323232323806040200InS.Korea,largeincumbentslostin16of23categoriesInthePhilippines,largeincumbentslostin7of23categoriesMalaysia

PhilippinesIndia7%Australia9%Japan9%Indonesia

ThailandVietnam3%China27%Singapore

South

Korea2022retaile-commercesalespenetration¹5%2%26%5%13%34%Weightedaveragetraditionaltradepercentageof23categories230%53%78%2%2%46%18%60%22%7%11%Win(incumbentsaggregatesharegain>1pp)Stable(sharechangewithin±1pp)Lose(sharelose>1pp)Countrieswithleadinge-commerce/traditionaltradepenetrationNotes:1)E-commercepenetrationforChinaispublishedbytheNationalBureauofStatisticsandincludestheonlineretailsalesofgoods,butdoesnotincludetheonlineretailsalesofnon-physicalgoods(i.e.,services).2)Weightedaveragetraditionaltradepenetrationof23categoriesbasedonEuromonitordata,excludingcategoriesxcountrycombinationswithnoavailabledatafortraditionaltradepenetrationSources:NationalBureauofStatisticsofChina;KoreanStatisticalInformationService;JapanMinistryofEconomy,Trade,andIndustry;eMarketer;Euromonitor;Bainanalysis3ResilienceAmidDisruption:HowSomeAsia-PacificIncumbentsAreOutmaneuveringInsurgentsForinstance,traditionaltradeaccountsforapproximately53%oftheretailvalueacrossthe23categoriesanalyzedinthePhilippines.Thissignificantshareunderscorestheimportanceofrobustroute-to-market(RTM)capabilityforbrandsaimingtosucceedinthemarket.Suchalandscapepresentsaformidablebarriertoentryfornewcompetitors.Thisisreflectedinthefactthatlarge,establishedincumbentsonlylostin7ofthe23

categories,indicatingtheircontinueddominanceinamarketwheretraditionalchannelsstillplayapivotalrole.Category-by-category,ouranalysis

revealeda

spectrum

ofoutcomes.

Overall,thebeauty

andpersonalcaresectoremergedasthemostreceptivetoinsurgentbrands,instarkcontrasttoothersectors,includingalcoholicandnon-alcoholicbeverages,

food,

andhomecare.

Withinthebeauty

andperson-alcarecategory,haircareandskincarewereparticularlyinsurgent-friendly,withestablishedbrandslosingtheirmarketsharein8and9ofthe11

markets,respectively.Ontheoppositeend,theconfectionerycategoryprovedtobe

thestrongholdforincumbentbrands,asincumbentsonlylostin1ofthe11

marketswithinthiscategory(see

Figure

3).Figure

3:

Haircareandskincarewerethemostinsurgent-friendlycategories;confectionerywasthemostincumbent-friendlyIncumbent

brands'

performance

in

11

tracked

countries,

by

category

(2018–22)Total

number1111111111111111111111111111111111111111111111ofmarkets:100%806040200InSkincare,largeincumbentslostin9of11

marketsInConfectionery,largeincumbentslostin1of11

marketsWineSpiritsFra-ColorSkincareMilkEdibleoilsSavorysnacksNappies/diapers/pantsBottledwaterEnergydrinksDrinkingmilkgrancescosmeticsformulaproductsBeerBathandshowerOralcareHaircareConfec-tionerySweetbiscuitsPetMealsandsoupsLaundrycareJuiceCarbo-natesfoodAlcoholicbeverageBeauty

and

personal

careFoodHomecareNon-alcoholicbeverageWin(incumbentsaggregatesharegain>1pp)Stable(sharechangewithin±1pp)Lose(sharelose>1pp)Sources:Euromonitor;Bainanalysis4ResilienceAmidDisruption:HowSomeAsia-PacificIncumbentsAreOutmaneuveringInsurgentsDelvingintotheperformanceoflargeincumbentsbasedontheirorigins,threedistinctpatternsemerge(see

Figure

4).InmostAsia-Pacificcountries,suchasAustralia,Singapore,andVietnam,foreignincumbentbrands(i.e.,incumbentbrandsownedbyoverseas-headquarteredcompanies)continuetoleadinmarketshareacrossthemajorityofthe23

trackedcategoriesanddemonstrategreaterresiliencebyoutgrowingtheirlocalpeersinmostwinningcategories.However,

inIndia,thePhilippines,

andIndonesia,

whileforeignincumbents

also

lead

inmarketshareacrossmostcategories,itisthelocalincumbentsthatexhibitastrongerabilitytogainshareinthewinningcategories.Forinstance,foreignbrandsinIndonesialed15outofthe23

trackedcategoriesin2022.Nonetheless,localincumbentshave

shownhighergrowthinfive

ofthesevenincumbent-winningcategories,

includingwine,

juice,

andsweetbiscuits,from

2018to

2022.

Thesuccess

oftheselocalbrandscanbeattributedtotheirextensivedistributionnetworksinruralareasandlower-tiercities,wheretheyeffectivelyleveragetraditionaltradechannels.InSouthKoreaandJapan,localbrandshave

traditionallydominatedthemarket.However,foreignbrandshave

recentlybegun

tolead

growth

insome

incumbent-winningcategories,

suchascarbonatesinJapanandfragranceanddiapersinSouthKorea.Figure

4:

LocalincumbentbrandsshowedstrongergrowingmomentuminIndia,thePhilippines,andIndonesia;foreignbrandsstillleadmostofthetrackedcategoriesForeign

incumbents

solidifyingwinner’s

positionLocal

incumbents

catching

up

onforeign

incumbentsForeign

incumbents

catching

upon

local

incumbentsInSingapore,Vietnam,Malaysia,Australia,Thailand,andChina,foreignincumbentsleadinmarketshareacrossthemajorityofcategoriesandareconsolidatingdominance.InIndia,Indonesia,andthe

Philippines,foreignincumbentsleadinmarketshareacrossthemajorityofcategories,whilelocalsarecatchingup.InSouth

Korea

andJapan,localincumbentsleadinmarketshareacrossmostcategories,whileforeignincumbentsaregrowingfaster.Example:

VietnamIn21outof23categories,foreignincumbentsheldhighersharethanlocalsin2018.Example:

IndonesiaIn15outof23categories,foreignincumbentsheldhighersharethanlocalsin2018.Example:

South

KoreaIn6outof23categories,foreignincumbentsheldhighersharethanlocalsin2018.MarketdominatorGrowth239237234leader

inwinningcategoriesInall9

categoriesthatincumbentswon,foreignincumbentbrandsoutgrewlocalonesIn3

outof4In4

categories,incumbentbrandsinaggregategainedshare1+ppfrom2018to2022categories,foreignIn9

outof23categories,incumbentbrandsin1incumbentbrandsaggregategainedshare1+ppfrom

2018to2022outgrewlocalonesAllcategoriesIncumbentAllcategoriesIncumbentAllcategoriesIncumbentwinningcategorieswinningcategorieswinningcategoriesWinStableLoseForeignbrandsLocalbrandsNote:1)

Theaggregatesharegainforforeignincumbentbrandswashigherthanthatforlocalincumbentbrands;Localbrandsaredefinedasbrandsownedbythecompaniesinthelocalmarket;foreignbrandsareclassifiedasbrandsownedbycompaniesheadquarteredoutsideofthelocalcountry,includingother

Asia-PacificcountriesandotherregionsSources:Euromonitor;Lit.search;Bainanalysis5Covid-19

experience

was

also

nuancedAnothercommonnarrativeisthattheCovid-19pandemicenabledincumbentbrandstoregaintractionasconsumerssoughtoutwell-knownbrandsduringtimesofuncertainty.At

thesametime,largermanufacturerswerebetterequippedtonavigatesupplychaindisruptions.Again,ourstudyshowedamixedimpactamongtheAsia-Pacificcountries.DuringtheyearofpeakCovid-19restric-tions,incumbentbrandsexperiencedincreasedsuccessin7ofthe11

countrieswe

analyzed.IndiaandChinasaw

themostsubstantialgains,whereincumbentsgainedineightandfive

additionalcategories,

respectively,

comparedto

theprevious

year.

Ontheother

hand,incountries

likeMalaysia,Singapore,Vietnam,andAustralia,therewereeithernosignificantchangesorincumbentslostinmorecategoriesduringthepeakperiodsofCovid-19restrictions.Insummary,incumbentsgainedtractionduringCovid-19insomemarkets,butnotinothers.Insurgentshave

momentuminmanysituations,butourdatashowresilientincumbentbrandscanholdsteadyorgainshareacross

a

widerange

ofmarkets

andcategories

inAsia-Pacific.

Whilemarket,categorycharacteristics,andmacrosituationsdocontributetoincumbents’successtosomeextent,whatmattersmostishowtheymanagetheircategoriesandbrands.What

we

learned

from

large

incumbent

winnersIntoday’seraofswiftdisruption,establishedplayerscanfinditchallengingtomatchtheagilityofemergingcompetitors.Ourresearchrevealsthatsuccessfulincumbentcompaniesareadeptatincorporating

themost

effectivestrategies

from

insurgent

competitors

whileleveraging

theirinherentstrengths.Theyhave

harnessedtheirscaletotheiradvantage.Theyhave

skillfullynavigatedtypicalpitfalls,suchascomplexityandinertia,whichoftenbesetlargeorganizations.Additionally,theyhave

shownacapacityforinnovation,investment,andexecutionthatwouldmakeeventhemostambitiousinsurgentsproud.ThesuccessofAsia-Pacificincumbentbrandscanbeexpressedinafour-partframework(see

Figure

5):6ResilienceAmidDisruption:HowSomeAsia-PacificIncumbentsAreOutmaneuveringInsurgentsFigure

5:

IncumbentwinnersadaptthebestoftheinsurgentplaybookwhilemaximizingtheirincumbentadvantagesLearn

from

insurgent

playbookMaximize

incumbent

advantages12Where

to

playConsumer

needsRespondtounmetconsumerneedsorAccumulated

in-depth

consumerand

marketExtensiveconsumerandmarketinsightsenabledbysystematicstudies,tracking,andmonitoringfirst;

no

opportunity

emergingtrends,eveniftheinitialConsumerinsightsPortfoliostrategytoo

smallincrementalvalueofopportunityappearsmodestorpotentiallydilutiveknowledgeHow

to

winMemorabilityPropositionAvailabilityAgility

inRapidinnovationcycle,enabledbyoperationalimprovementsandecosystempartnershipsEstablished

know-

Richknow-howandassets,includinginnovationshow

in

innovations

patents,talents,processesLong-term

top-line

FocusonbuildingmarketpositionwithFast

scalingthroughLeverageestablishedomnichannelgrowth

focusedHero

SKU

firstflexibilitytotakemulti-yearpathtoprofitabilityfootprintsandrichknow-howinRTMasomnichannel

reach

themoat,enablingrapidscaleandachievingcost-effectivenessEstablishdistinctiveheroSKU(s)firstbeforebuildingabrandGlobal

reachReplicaterepeatablemodelsfrom/toglobalmarketsEvolving

marketing

Adoptinnovativemarketingmodels,M&ApowerhouseAbilitytostrategicallyleveragemergerandacquisitionsasameanstomodelsembracingevolvingdigitaltrends,e.g.,contentmarketing,socialcommerce,etc.acceleraterevenueorprofitabilitygrowth34OperatingmodelFounder’smentalityFosteraculturecharacterizedbyanextraordinarysenseofinsurgency,afrontlineobsession,andanownermindsetStable

returnsDiversifiedportfoliosandriskmanage-mentstabilizereturnsandincrease“stayingpower”;abilitytofreeupresourcestoinvestinhigh-priorityprojects(brands,innovations,businesses,etc.)Integrated,Limitedsiloes,allowingforfastcommunicationanddecisionsTalentAbilitytoattracttoptalentsenabledbystrongreputationandmaturetalentdevelopmentsystemcross-functionalattractivenessLocalization(Forforeignbrands)DesignDecideDeliverDigitalize1.

Where

to

play:

Theseincumbentsestablishanin-depthunderstandingoflocalconsumerstoidentifygrowingdemandanddriveportfoliogrowthwithinandbeyondthecurrentmarket.2.

How

to

win:

Theyfosterarepeatablegrowthmodelbybuildingstrongbrandmemorability,establishingabest-servedbrandproposition,andoptimizingavailability.3.

How

to

operate:

Successfulincumbentsdevelopdifferentiatedcapabilitiesthatcreatesustain-ablecompetitiveadvantages.4.

How

to

localize

(for

foreign

brands):

Successfulforeignincumbentsproactivelylocalizecorecapabilities,enablingthemtocompetelikelocalplayers.Where

to

playSuccessful

incumbents

capitalize

ontheextensive

consumerandmarketinsights

gained

from

years

ofoperationtoidentifyemergingmarketopportunities.Theyareattunedtothemarket,searchingforunmetconsumerneeds,andareoftenwillingtoinnovatebasedonemergingtrends,evenwhenthesenewprospectsinitiallyseemminorcomparedtotheirexistingbusiness.Othersuccessfulincumbentsadoptsolutionsthatinsurgentsaretryingtoscale—solutionsthatresonatewithconsumers—and

use

theirscale

advantage

to

builddistributionandbrandawareness

andachievecost-effectiveness

quickly.7By-health,

a

leading

Chinese

vitaminanddietary

supplement(VDS)

brand,exemplifiesthisstrategy.Inrecentyears,

By-health

hasbeen

proactive

inidentifyingandresponding

to

emergingconsumertrends.Ithasstrategicallyenteredburgeoningnichesub-segments,suchaseyehealth,liverprotec-tion,andbeauty

andweight

management,positioning

itself

asoneoftheearlymovers

inthese

areas.Thebrandhasforgedpartnershipswithprestigiousinstitutionsforadvancedresearchanddevelop-ment,leveragingitsstatureasamajorplayertobuildacompetitiveedgethroughaccumulatedexpertise.By-healthhasalsodramaticallyaccelerateditsinnovationprocess,achievingapaceonparwithinsurgentbrands.ThisagileapproachhasbeeninstrumentalinBy-health’sascenttothetoppositioninChina’s

VDSmarket,supplantingthepreviousmarketleader.Asaresultofthesestrategies,By-healthhasachievedaCAGRof15%–20%from2018to2022.Similarexamplescanbeobservedamongsuccessfulincumbentsintheregion.Baixiang,aleadingnoodlebrandinChina,hastransformeditsapproachtoinnovationbybecomingconsumer-centric.Embracinga“testandlearn”philosophy,thebrandhasadaptedtoemergingconsumertrendsandscaledbyleveragingitsestablishedchannels,leadingtothesuccessfullaunchofseveralhealth-focusedpremiumproducts.Meanwhile,GreatNorthern,theleadingAustralianbeerbrandownedbyCarlton&

United

Breweries,

canattributeits

success

toits

deliberate

positioning,

whichtargeted

itscompetitor’s

strongholdinterms

ofoccasions

(outdoor

lifestyle),

taste(lightprofile),

andgeography(Queensland).

Likewise,a

leading

food

brandinIndia,Tata

Sampann,hasachieved

anapproximately20%CAGR

inthepast

five

years

byaddressing

consumerneeds

forhigh-quality,

healthy,

andnutri-tiousstaple

foods.

Itwas

oneofthefirst

movers

into

thebranded

pulses

marketinIndia,graduallyexpandingintocategories

suchasspices,

poha,

anddry

fruits.Byleveragingtheirunparalleledconsumerinsightstoexpandmethodicallyintohigh-potentialniches,someincumbentwinnershave

fueledtremendousgrowth.Theirstrategicplaybookcouldprovideamodelforotherincumbentslookingtoplaytotheirstrengths.How

to

winWinningincumbentbrandsintheAsia-Pacificmarketshave

craftedarepeatablegrowthmodelbybuildingstrongbrandmemorability,establishingawell-definedbrandproposition,andoptimizingavailabilityacrosstheirmarkets.Ourresearchrevealsthatincumbentwinnersadoptedstrategiesinspiredbytheirinsurgentcom-petitors.Thesestrategiesincludefocusingonlong-termtop-linegrowth,prioritizinga“hero”SKUapproach,andemployinga

marketingstrategythatfollowstheevolvingmarketlandscape.Simultaneously,these

incumbentsleveragetheirstrengths,includingfast-scalingcapabilitiesandanestablishedomnichannelpresence.Theyeffectivelycombineinsurgentbrands’learningswiththeirestablishedmarketadvantages,suchasglobalreachandM&Acapabilities.8ResilienceAmidDisruption:HowSomeAsia-PacificIncumbentsAreOutmaneuveringInsurgentsPucukHarum,Indonesia’stopready-to-drink(RTD)teabrand,exemplifiesthis.Itleveragesthedistributionnetworkofitsparentcompany,

Mayora,toachievethehighestnumericaldistributionintheRTD

teamarket.Thebrandconsistentlyinvestedabovetheaverageinadvertisingforyears,focusingonitsheroproduct—theregular350mlPucukHarumJasmine.Thisstrategicfocushashelpeditcaptureanapproximately30%shareoftheRTD

teacategorywiththissingleSKU.Inexpansion,certainincumbentvictorsenhancetheirglobalpresencebyadoptingglobalbestpracticesforinternationalmarkets.Forinstance,SamyangFoodsachieveda20%CAGRinoverseasrevenue

over

thepast

five

years.

Thissuccess

stemsfrom

replicatinga

globalexpansionmodel

initiallydevelopedandproveneffectiveinChinaandthenappliedtootherinternationalmarkets.Addition-ally,

thebrandhasleveragedsocialmediaastheprimarytouchpointtosustaina“viral”effectandmaintainactiveengagementwithconsumers.Finally,

theresourcesandcapabilitiesofincumbentstoengageinM&Aprovidethemwithagrowthadvantage.Forexample,AmorePacificrecentlyacquiredCOSRX,aninsurgentcosmeticbrand.ThisacquisitioncontributessignificantoperatingprofittoAmorePacific’sbottomline.FormoreM&Astudies,pleaseread“Overseas

Ambition:

Asia-Pacific

Consumer

Products

Companies

Use

M&A

toAccelerate

Growth.”How

to

operateInsurgentsarecharacterizedbytheiragility,

integratedorganization,andcreativehouseculture.Ouranalysissuggeststhatsuccessfulincumbentcompaniesandbrandsincreasinglyembracethis

founder’s

mentality,

whichcanbedefined

by

threedistinct

traits:

anextraordinarysenseofinsurgency,a

frontlineobsession,

andan

owner’s

mindset.

Meanwhile,manyincumbent

winnerstransformedtheirorganizationsintomoreintegratedandcross-functionalentitiesthatreducecom-plexityandactdecisivelytoovercomeanddismantlebureaucracy,

thereby

allowingthemtocompetemoreeffectivelyina

dynamicmarket.Meanwhile,incumbentwinnersleveragetheirdiversifiedportfoliosandrobustriskmanagementcapabilities

to

maintainfinancialresilienceamidmarketfluctuations.

Theyactivelymanage

theircoststructure,redirectingfinancialresourceswhennecessarytorevitalizegrowth.Forexample,SouthKorean

foodand

beveragecompany

Nongshimconducted

a

scaled

cost

transformationprograminrecentyears,nearlydoublingitsEBIT.

Thisstrategyprovidedthenecessaryresourcestoinvestinhigh-priorityprojects.Moreover,theestablishedstability,reputablestanding,andwell-developedtalentsystemsofincumbentwinnersmakethemappealingtoprofessionals.Prospectiveemployeesseelargeincumbentsasabletoprovidesecureandprogressivecareerpaths.Thisgivesthemanedgeinthefiercecompetitionfortalent.9How

to

localize

for

foreign

brandsOurresearchhighlightsthatlocalizationplaysacrucialroleinthesuccessofforeigncompaniesintheAsia-Pacificregion.AprimeexampleofthiscanbeseeninChina.Successfulforeignincumbentsinthisintensemarketgainacompetitiveedgebyemployinga“4

Dapproach”:•••Design

for

China

byrigorouslytailoringproductsforChineseconsumersandhavinglocalR&D.Decide

in

China

byadaptingtheoperatingmodelformorelocaldecisionauthority.Deliver

at

China

speedusingtheecosystemandmicro-battlesforrapidpace,trialanderror,an