BW Communities

'Emerging Markets Have Always Been Important'

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Currently Ipsos (a French company) is the world's third largest market research firm with a strong presence in advertising, marketing, media research, public opinion. In July this year it announced the acquisition of Synovate from Aegis Media, which would further help strengthen its presence in the Asian markets, especially India. David Richardson, MD, Ipsos APAC talks about business in emerging markets and how larger companies globally are depending on research in newer geographies more than ever in an interview with Businessworld's Suneera Tandon. With the global acquisition of Synovate from Aegis Media a few months back, how are you leveraging the existing capabilities of Synovate to Ipsos? In terms of the two companies, they are quite complimentary to each other. Ipsos remains very strong in advertising research, innovation and product development. Synovate brings to Ipsos strong product testing capabilities and strong tools in customer loyalty research which very well match the innovation tools that IPSOS has had. Synovate also brings a strong approach in the custom health care research space, especially in Asia, where it remains a leading player in this area. It has a strong network around the world, that combined with the connections Ipsos already had, gives us a strong position in health-care custom research. Geographically, Synovate has been very strong in Asia, while  Ipsos was strong in North East Asia, but weak in South East Asia and India. So the combination of the two companies will allow us to double our business in Asia. So then Asia becomes will become a very strong market for you, is that strategy arising from the volatility the western world is facing? Ipsos was already doing business in developing markets, but this helps get there a bit faster. Ipsos is the largest custom research company in Lat Am  (Latin America) and has a strong base there. But emerging markets have always been important. Ipos has been strong in Lat Am but weak in South East Asia and with Synovate, it has been the opposite. So the combination of the two companies is complimentary with both having a degree of presence in Asia, Middle East and Africa.  This will increase our share of business from the emerging markets of the world and take it to about 20 per cent. With the volatility in the western world right now, how are brands tackling the situation? The world is a little bit nervous vis-vis the global economy. I think everyone knows that the focus is on emerging markets. Now it's a matter of what the difference is between what companies are going to do in the emerging markets and what they are doing already. There used to be a broad based desire to treat all countries in Asia as somewhat similar and attractive but that practice went away. Then everybody shifted their focus on BRIC. Now people realise that just because you understand China doesn't mean you understand India as well. So it's gone back to the fundamentals that you have to understand each country differently. The world is really focused on China, India and Brazil right now.  The amount of business done across Asia has not increased. As companies get stronger in Asia, they don't need to source research from outside the continent, they are spending more money in Asia. So spending is increasing in China and other Asian countries which means it's decreasing everywhere else.   Are these global or domestic brands that are focusing on these markets? The global brands are always very focused and they will continue on developing this opportunity. Everyone is talking about focusing on the next billion consumers. At the same time you see the emergence of multinationals that are operating in different parts of Asia, which are beginning to develop scale. Ten years ago you would have called Samsung one of those mini MNC and now you won't. So you can't predict which is going to be the next big MNC, but there will be a lot of countries - based in India or China- that will develop and increase their multi-national presence. There is also a shift increasingly from our global partners towards global businesses working locally. We've got big India based businesses who are taking their business outside India and that's a great opportunity for us. Our clients in India vary from FMCG, automotive, (several key Indian brands such as Tata, Hero) healthcare, telecom etc. How important is research in today's time and date? There are two perspectives on the need of research. Firstly if you are an international company, based let's say in Europe and you've identified that for your company's future you have to understand and perform better in the far-off lands that are culturally very far from you, you need research to fulfil the promises to share-holders because why should they promise to do a great job if they don't understand these markets\people. This is equally true for companies here in India who want to spread their wings and do more to grow in another part of the region of this country; so they need research to expand beyond their comfort zone. The other dimension is that India is a very young country where a lot of changes are taking place. Even well experienced businesses are trying to track what's going to happen next, what are the change the growing youth population is going to bring in terms of behaviour, consumerism and social outlook.   But there must be challenges in functioning in a market like India? The Indian research industry faces a major handicap right now. Prices (to clients) have been exceptionally low. There is no reason for places like Indonesia, Vietnam and Philippines to be five times more expensive in terms of price charged to clients. It's not like India is 1\5th the value of consumers in other countries, but prices in marketing research have been fixed and haven't risen in a decade even though salaries have gone up a lot.  The industry is at that turning point where companies realise that they need to invest more in research. Now companies are starting to invest in technology to innovate and move towards digital data-collection. Even clients, for the first time, in a decade are signalling to pay more. There are companies willing to pay to up to 50 per cent more for our services, in the past six months. Now that is a radical change.