Matthew Ryan – Business Development Manager, citiesocial
The final presenter of the 2019 Global Forum discussed opportunities in Asia. Matthew Ryan focused on the retail landscape of Taiwan, but also mentioned Hong Kong, Singapore and Malaysia.
Since 2017, Matthew Ryan has been the Business Development Manager for Taiwan-based citiesocial. His primary focus is to facilitate selling products in Asia for brilliant startups, creators and new brands. As innovators often perceive Asian retail to be fraught with difficulties and are prone to making it a secondary market priority, Matthew has made it his mission to lower the barriers to entry into retail in Asia.
Raised in East London, Matthew has been living in Asia for nearly 13 years. He has worked in the Taiwanese tech and retail industries for eight years, has great enthusiasm for cross-cultural branding and communication and is fluent in Mandarin.
Citiesocial is a Taiwan-based lifestyle ecommerce platform that curates unique and well-designed products from around the world. It operates in Taiwan, Hong Kong, Singapore and Malaysia.
Why Sell in Asia?
- Asian Consumers
are early adopters.
In Asia, 65% of customers buy
new products within a period of 12 months. In Europe, the corresponding figure
- Taiwanese have favorable impressions of the U.S. and U.S. products. U.S. products are more readily desired than in Japan or mainland China.
- Food safety crises have increased the appeal of overseas brands. Since 2001, retailers and consumers concerned about unsafe foods have preferred overseas kitchen and food products.
- Barriers are low and opportunities are high: Overseas firms can win more favorable terms and gain needed cash flow.
Reasons Why Some Brands Might Hesitate Selling in Asia
- Limited resources: not a priority
- Don’t have local contacts
- Don’t understand the market
- Can’t speak the language
- Don’t know where to begin
- Worry that products will be copied and IP theft
- Don’t understand the local consumer behavior
- Unsure if there is a market for my product
- Unsure if regional partners are able to properly explain my products
- Fear not having direct contact with my customers
- Concern about being able to provide local customer support
Retail success in Asia is all about the right partnerships—retailer or distributor. Working with the right retailers can help you scale at the right pace.
Choosing the Right Markets: Taiwan
Taiwan’s population is 23.3 million. Its capital is Taipei. Mandarin Chinese is the official language; Taiwanese and other languages are also spoken. GDP is #21 in the world, currency is the New Taiwan dollar. Key exports are electrical machinery equipment (43% of total exports), machinery including computers (12%), plastic articles (6.7%) and optical/medical/technical apparatus (almost 5%).
According to the EC Harris Consultancy, Taiwan ranks as the best retail market in Asia, followed by Japan, Australia, Malaysia and South Korea. The average metropolitan family income approaches US $37,000 per year and the population is well-educated. Market size for household consumer goods Taiwan in 2018 was estimated at $1.83 billion USD.
As a test market for East Asia, entry to retail is simple and analogous to the U.S. U.S. homeware products in demand in Taiwan: purifiers, air/water filters, refrigerators, high-end electric appliances, washers and kitchen utilities.
Best Approaches to the Market
Major retailers like Tmall will capture price-sensitive consumers. Differentiate by branding, not on features. Successful products should be unique and higher-end. Higher quality imported products are expected to grow 3-5% in five years.
Taiwan is different from other Asian markets; it is more mature. Note that Taiwanese prefer Japanese and Scandinavian design; they want sophisticated design and packaging. Be sensitive with simplified Chinese characters on packaging; using traditional Chinese characters will cause Taiwanese consumers to turn away. With a very low birthrate, Taiwan has a large pet products market.
Ryan outlined various retail channels: department stores, hypermarkets (Costco, Carrefour), specialty store, supermarkets, mass ecommerce and specialized e-commerce sites. It’s a congested market with many retailers. He provided many details about specific retailers. For example, Costco attracts a higher percentage of high income purchasers than other retailers, because consumers trust Costco for safe and good products and want the best price as well. Costco buyers are local and report to the U.S. so this is a good channel to contact.
E-commerce offers localized content. Taiwanese trust influencers and bloggers. Influencers who work with brands cite Facebook as the best platform, followed by Instagram. Consumers like unboxing videos.
Ecommerce has 88% penetration; consumers are very well connected. The prevalence of convenience stores (such as 7-11) means that goods purchased online can be picked up at stores 24/7 just one minute away from home. The PC Home site in Taipei offer six-hour anytime delivery, round the clock.
Working with a Local Distributor
- Local contacts and market knowledge
- Can create localized marketing materials
- Storage and logistics
- Distance from customer
- Loss of control
- Uses only known channels
- Taiwanese distributors are conservative. May be unwilling to do the legwork for fresh startups. Some do not have websites.
Building a Strategy for Taiwan
In order to find and evaluate a Taiwanese distributor attend trade shows and be prepared with your product development plan—show amazon reviews and Kickstarter campaigns. Check the distributor’s marketing materials to verify if their partners are in the right channels.
Reach out to specialty buyers to deal directly with your brand. Research the market to understand if there is demand for your product. Then you can work with your distributor to build your brand in Taiwan.
Hong Kong Market
Hong Kong’s population is highly educated and high density: 7.4 million, residing in about 1,000 km2. Language is mostly Cantonese and English. GDP is #36 in the world, with GDP per capita at #18 in the world at roughly $48,000 per year. Currency is the Hong Kong dollar.
Key channels are department stores, hypermarkets, specialty
stores and ecommerce. It is a small but prosperous market and warehousing is
expensive. China rules ecommerce.
Why Work with Citiesocial?
Citiescocial makes it easier for new and smaller brands to test the market, by providing logistics and warehousing, support services and localized marketing. Citiesocial operates in English and in the local languages: Mandarin and Cantonese, Japanese and Korean.
- Consults with partners to fully understand the brand’s details and goals
- Marketing team localizes your branding to connect with local consumers
- Promotes your brand with the right influencers to reach your target consumers
He outlined details of Citiesocial logistics and warehousing, pricing and payment terms and social media skills.
Ryan then discussed two case studies to demonstrate how Citiesocial worked with Anysharp knife sharpener and Retap, maker of glass water bottles, to build successful localized marketing campaigns that delivered great sales gains.
Ryan engaged with attendees who posed detailed questions about specific retailers and the impacts of Chinese e-commerce sites.