Provocative title? Yes!! That was my branding for this post to get your attention. I discuss why this shouldn’t be the case for Asian startups.
I have written about brand building in Asia before on this forum, but the ever changing dynamic nature of the Asian economy continually provides fresh and interesting perspectives on building brands in the region. Asia’s influence on the global economy continues to grow. The recent slump in China’s economic growth followed by structural weakening of its stock market sent alarm bells ringing through global economic indicators and triggered stock market crashes in other countries.
The rise of Asia as a region that can strongly influence global economic, political and consumer indicators comes with an increasing need to develop and build strong brands. It is almost akin to the popular Spiderman principle – “With great power comes great responsibility”. Asian brands now have the potential and the ability to significantly improve the quality of lives of the billions that reside in the region. Brands have the ability to significantly alter geo-demographic trends, pull significant proportions of the population up the value pyramid and trigger more and more investments in the region.
Brand building in Asia is an intensely debated and evolving topic. The debate has moved on from the inability of Asian firms to build strong brands to how firms can better leverage the innate strengths of their brands in achieving local and regional growth. Brands now act as core vehicles of market entry and regional expansion (I cover more on this in my article here:https://www.linkedin.com/pulse/asian-brands-cross-border-opportunity-sandeep-das). Many Asian brands have now set their sights on global expansion. Equally, and if not more so, Asian e-commerce platforms (or brands) now act as the primary vehicles for global brands in fueling their Asian growth strategies. The recent growth strategies of Alibaba, Tencent, Xiaomi etc. clearly highlight the transformative influence they have in fundamentally altering the balance of power in Asia.
Building strong brands is now an ingrained mindset among majority of Asian brand owners. Among those who still haven’t adopted the mindset, there is a strong realisation of the power and value of building strong brands. The world’s leading brand consultancies are now publishing annual rankings of top brands in individual countries (e.g. BrandZ rankings for Indonesia). Asian governments are now commissioning global consultancies to identify and rank their most valuable brands (e.g. the Taiwanese government commissioning Landor).
The most disruptive role in the brand building space in Asia is now in the hands of startups. Before we go into understanding how and why this happening, it is important to accept the fact that Asian startups do not have the “baggage” that have long inhibited brand building in Asia – commodity mindset, older generation thinking and the inability to think medium or long-term. With these missing inhibitors, startups are poised to take a lead role in the creation of strong Asian brands. So what are the characteristics that Asian startups have, which will enable them to take this lead role? They are locally born, have tapped into a need that has both local and regional relevance, provide a solution(s) that fundamentally improves consumer lives, are agile and have global mindsets and ambitions.
Can Asian startups lead the way in building strong brands? I strongly believe they can.
Let’s look at a few relevant examples. In December 2015, video streaming service iFlix announced plans to raise $150 million in fresh funding to expand its services to the Middle East, Africa, broader Asia and Eastern Europe (all the while the Netflix vs. Amazon Prime battle rages on at a global level). Zomato have already signaled their global ambitions by establishing a presence in countries like Brazil and South Africa and are acquiring other startups to further accelerate their pace of expansion. The fact that Google launched its first campus for startups in Seoul in 2015 is a testament to the fact that it is monitoring the Asian startup scene seriously. Curated travel activities startup Klook completed a seed funding round of $1.5 million in February 2015 and has strong ambitions of establishing itself in the Asian tourism and travel industry.
These are only a few examples from the startup scene in Asia. Entrepreneurship is slowly establishing itself as a legitimate career path in the region and there are multiple examples of disruptive products and business models launches. For startups to take the lead in building strong brands, there needs to be a strong desire towards brand building. This is not always top of mind when you are a founder. For all startup founders, whether first time or serial, there are a host of factors to contend with as they take their companies off the ground or when they are looking to scale the business. You need to give innumerable pitches to investors, get access to funds, continuously develop and evolve your products, ensure IP protection, maintain consistency in customer experience and last but not the least, recruit the best talent available. It is no surprise that in the midst of all this chaos, investing in developing a startup brand falls by the wayside.
When they were startups in the truest sense of the word (even though they have never let go of the startup mindset), and even after establishing themselves as leaders in their space, organisations like Google and Airbnb never stopped investing in their brands. Google always had a strong brand-led focus in its evolution, which is reflected in the branding of its products. Airbnb has invested in creating brand guidelines, has refreshed its logo and has adopted a new brand positioning “Belong anywhere” since 2014. These are great examples of disruptive technology brands seriously understanding the importance of their brand assets and investing in them.
In addition to not having the baggage that inhibits brand building, startups in Asia have the advantage of having a significantly different launch platform:
- They are not trying to find selling space in crowded categories, which promotes reactive and copycat behaviour
- They have products that have taken birth through fresh and out-of-the-box thinking
- Their products or business models are already disruptive (and consequently strongly differentiated) in nature, which is an ideal pedestal to build strong brands
If in spite of these advantages, startups in Asia fail to build strong brands, then it will be a significant lost opportunity.
So what do startups in Asia need to do to build strong brands? The rules of brand building do not really change for Asia and neither does it change for startups. Asia adds complexity to these rules because of multiple cultures and associated cultural codes.
But for startups, it is more about having the focus and discipline and having a mindset that realises the value of creating branded assets out of technology-driven disruptive products. We also have to be fully cognisant of the fact that million dollar advertising and marketing budgets are non-existent and any seed / Series A / Series B funding will focus on product development & enhancement / infrastructure development / scaling up operations.
Consequently there are some key components of brand building strategies that startups in Asia should seriously consider:
Brand building as a core focus area: The path to success in developing strong brands starts with a mindset change. Classic marketing and branding theory has always pointed out how ‘brands’ accentuate differences between products. This is true even in a startup ecosystem. Consider this example – Techinasia did a piece of the 15 top-funded e-commerce startups in India towards the end of 2015:
Out of the 15 profiled in the article, only PayTM, Snapdeal and Flipkart will have some form of brand awareness and perception associated with them. All the rest may (or may not have) disruptive platforms or delivery models but they yet do not have strong brand names. Key insight: The amount of funding a startup receives or whether it achieves “unicorn” status has no relationship with the strength of its brand name.
In reality, a startups life cycle from seed funding to unicorn status is completely different from a brand building life cycle. Quite a few startups will reach unicorn status without having any form of strong branded assets.
In 2012, FastCompany published an article from Geoff Cook, who argued the case that VCs are increasingly expecting branding experts to be on board right from the very beginning (i.e. when they decide to invest in a startup). The full article is here:
The article might be dated, but the author’s argument has timeless relevance. As Asian startups increasingly court investors for seed / Series A / Series B funding, VCs and angel investors will want to look for tangible and measurable proof of the traction of their products / brands / propositions among the target consumer (B2B or B2C).
Having a strong brand (or at least one in the process of getting established) aids in generating equity in the consumers’ mind, which is a valuable metric to measure and monitor in addition to revenue and profitability. Investor confidence is also strengthened via strong consumer outlook towards a brand (some rules of Wall Street do apply to the world of startups).
Approach brand building as a strategic differentiator: Everyone knows this but it does not harm to re-emphasise. Brand building is not about having a logo, a set of colour palettes, a font and a set of designs. It is important to have distinctive assets in these areas, but they are merely “aids” in the process. The ultimate aim for a startup is to create a brand identity strong enough to communicate the strategic differentiation of its product to the consumer.
Creating and establishing a strong brand is a journey and should continue over the lifetime of a startup. Founders should note that during periods of investor exits and sell-offs, high valuations can be driven equally through a combination of technological superiority of the product and strength of the startup brand.
All founders speak at numerous investor forums, conferences, seminars and roadshows. These are platforms for brand building and they do not require extra investment. If you are presenting to an influential angel investor, VC, a syndicate, an accelerator or even on Shark Tank, founders should mention / touch upon how they intend to create a brand out of their product. The rage these days in the branding and creative worlds is “storytelling”. Founders can tell the most profound and moving stories around the blood / sweat / tears spilled and shed to create their companies. Asian startups should take cue from their bigger cousins who have been adapt at storytelling for ages.
This was Airbnb’s campaign in 2014:
…and this is their most recent “Live There” campaign
The brand has evolved. The story has evolved. The brand equity has strengthened. In the meantime, Airbnb has also achieved unicorn status. Investments in enhancing technological superiority of their product continues. How do consumers remember, recall and recommend Airbnb? Through their experiences and the stories they share. Yes the platform continues to provide the most authentic dwelling choices for your travel destinations, but consumers now look for that “perfect home at the perfect place” at their holiday destinations on Airbnb. Great brand story fascinatingly narrated.
Good storytelling by Flipkart here. The campaign is around the theme of empowering local businesses from small town India. I did talk about brand awareness and equity of Flipkart. These forms of storytelling will continue to strengthen such measures for the brand.
But just like crowded categories, disruption is copied and platforms become populated. The Asian e-commerce startup platform is now showing signs of overcrowding. Consequently, different dynamics of different startup ecosystems will demand different forms of storytelling.
Ensure consistent brand experience at all touchpoints: Strong brands are able to provide consistent experience across all their touchpoints. This is important for startups too but possibly more important for Asian startups. The added layer of complexity that Asian startups need to deal with is to be meaningful and relevant to myriad cultures and sub-cultures. Even when operating in one country, a startup with direct consumer interfaces needs to resonate with the country’s social and cultural fabric. The consumer interfaces need to be meaningful to all cultures (i.e. embedded in the country’s societal, demographic and cultural codes).
There are examples from established brands that Asian startups can emulate – Baidu is serious about the potential of India and this is reflected in its strategy to expand its MoboMarket app store and make it available in multiple Indian languages. Lazada, with a $1 billion infusion from Alibaba, is a mobile-first online retailer with more than 30 million downloads of its app. It ensures a consistent experience of its app across all markets it is present in – with Thailand and Indonesia leading mobile adoption and Vietnam lagging behind.
You can clearly see a trend in the examples I am mentioning as I write along. I am using examples of startups that are already strong brands. Those who have remarkably disruptive products but do not have strong brands are not in my radar. As I write this post, I am the consumer who will engage with Asian startups and I will engage with only those brands who have tried to engage with me meaningfully.
Founders need to accept an important principle of brand building – Consumers tend to notice more of the things they are into. It is the proverbial “branding chicken and egg story”. Did a brand manage to raise its visibility through its advertising efforts or did the consumer notice the brand more because suddenly the category is in vogue? So in many instances a startup founder cannot foresee or manage the number of consumer interactions on each touchpoint, but can ensure that all interactions provide a consistent experience.
Infuse brand positioning with the core product disruption: As I write this article on LinkedIn Pulse, I still do not have a clue around how the algorithm that shares Pulse posts works. As I see the views on my posts fluctuate wildly, I am sometimes frustrated. But has this stopped me from publishing on LinkedIn Pulse? No it hasn’t. I know Pulse is a great platform, gets me the audience that I am looking for and allows me all the flexibility of publishing. So I keep on writing and publishing.
For me LinkedIn was always a great brand and Pulse is a great addition to the master brand portfolio. Pulse is a perfect example of a technology-enabled sub-brand that has opened up new possibilities for consumers (including myself), and that is the true definition of “disruption”.
I am aware of the complex algorithms that power LinkedIn but I am hooked on by the brand’s positioning and the solutions it provides. This is a state every Asian startup should aim to achieve. Let’s leave the technological superiority for investors to evaluate and engineering teams to sharpen. For building strong brands, let’s focus on the differentiation, the stories that I can tell and the experiences that I can narrate.
There is a significant opportunity for Asian startups to invest and develop strong brands. It is all about clear understanding of what a brand can or cannot be, having the focus and discipline to create brands and giving the whole process the attention it deserves.