Introduction
Have you heard of the company that's been making headlines in the consumer goods industry lately? It's a unique company that stands apart from large, globally operating manufacturers, aiming for growth by focusing on "local challenges."
ThatKao CorporationIn response to poor performance in the Chinese market, the company is accelerating its expansion into Southeast Asia (ASEAN), but there is a strategy there that goes beyond mere "market expansion." In this article, we will explain three key points that readers can learn from.
1. "Global Sharp Top" - What is Kao's Growth Strategy?
This clearly illustrates the difference in strategy between them and global giants like P&G and Unilever, which have a large presence in the consumer goods industry. These large manufacturers mass-produce common brands worldwide and dominate the market by spending enormous amounts on marketing.
However, Kao's approach is different. Instead of "competing on a global scale," they are taking an approach of "selecting areas of expertise and delving deeper into them." In other words,"What kind of technological capability is relevant to which region and for which type of consumer?"This development focuses on that aspect.
Specific strategic points:
- Addressing local issuesThorough research into local needs, such as the hot and humid climate and the living conditions of Muslim women.
- Utilization of technological capabilities: Leveraging technological expertise accumulated over nearly 140 years of history, including in surfactants.
- Implementation of a digital strategy: Utilizing local digital platforms such as TikTok, Lazada, and Shopee
- Collaboration with social issues: Focusing not just on business, but also on contributing to the community, such as through measures to combat dengue fever.
2. Product Strategies Learned from Concrete Success Stories
Kao's expansion into ASEAN has been successful through the development of three key products. We will explain the key strategic points represented by each product.
① "Biore Please Deodorant" (Indonesia)
The inspiration for this product came from something surprisingly mundane: the need to address the heat and sweating experienced by women who commute by train while wearing a hijab (a head covering worn by Muslim women).
Employees from our Japanese headquarters actually lived in a hot and humid climate for two weeks to experience the conditions firsthand, which helped advance the development process. This product is a result of the establishment of our research and development center and is the first unit to be sold in the ASEAN market.
② "Moss Block Serum" (Thailand)
This product is designed to prevent dengue fever. Traditional mosquito repellents use chemical agents, which have restrictions on their use, especially around children, in some countries. However, Kao has developed this product.Application to skincare technologyI did.
A groundbreaking mechanism:Applying silicone oil to the skin makes it difficult for mosquitoes to land, causing them to fly away instantly. The idea is to scare them away before they bite. It's easy for children to use and prevents the development of repellent resistance.
③ Local test marketing of "Biore Usol UV"
We've reversed the traditional Japan-centric approach of "develop in Japan → test → global deployment" to a "test market in Thailand → feedback → improvement → deployment" model. This approach adheres to the fundamental principle of "how to listen to consumer feedback."
3. Kao's emphasis on the "social issues x business" perspective
What's important here is that Kao is aiming forA company that is with the consumer.That is the point. This is not just marketing, but a commitment to social responsibility.
Specific examples:
- Thailand is promoting dengue fever countermeasures through "industry-academia-government collaboration (universities, government, and private sector)".
- In collaboration with Earth Pharmaceutical, they also released an insect repellent spray.
- We have also partnered with the Thai conglomerate CP Group to develop environmentally friendly daily necessities.
According to Kao's head of strategy, "It is the responsibility of consumers to avoid mosquito bites," emphasizing social contribution as well as profitability.
Summary – Essential Lessons from Business
The most important thing to learn from Kao's ASEAN strategy is,"A truly global company is one that has the courage to choose where to compete."While major manufacturers compete in a common global market, Kao has grown by identifying its area of expertise and leveraging its technology in that area.
This is also an important lesson in today's business environment: You don't need to compete with the "entire world.""My strengths × local challenges"Identifying your strengths and focusing your investments there is the shortest path to long-term success.
Furthermore, global warming is not merely an environmental problem; it also signifies the expansion of the market for sweat control and UV protection. Connecting social issues with business has become a strategic element crucial to a company's very survival in today's world.
Finally, digitalization cannot be ignored. In ASEAN, even people who shop at physical stores are aware of products online, thanks to TikTok and e-commerce sites. It's important not only to display products in stores, but also to have them talked about on social media.
What we can learn from Kao's more than 60 years of experience in Asia is the fact that "to become a small global company, you just need to be small and focus on your goals." Instead of competing on equal footing with the world, the right approach is to maximize your strengths and compete with products that understand local consumers.
