The document provides lessons from a Western business expanding into the Asia Pacific region. It emphasizes that APAC is not a single homogeneous market but rather a diverse set of countries with unique cultures and business practices. Some key lessons include: conducting bottom-up analysis in each country rather than top-down regional targets; the importance of building long-term relationships over legal contracts; negotiating styles vary significantly between countries; and working with local partners in each market to navigate cultural differences is crucial for success. Adapting strategies to individual country contexts and committing to the long-term are important for businesses expanding in APAC.

1. Jeff Blais
Director Experience
Design, SapientNitro
Singapore
Jeff is a thought leader
for emerging experiences
and markets such as
connected retail, interactive
environments, and next
generation connected
ecosystems.
Christian Oversohl
Senior Vice President,
Managing Director
Asia Pacific
Christian is a thought leader
who helps clients navigate
their brands through
the opportunities and
challenges caused by the
digital disruption of their
market environment.
APAC: LESSONS FROM
A DIGITAL IMMIGRANT

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Here Are Five Firsthand Lessons from a Western Immigrant
Consider Each Market Separately
When planning revenues and setting targets for the
Asian market, doing bottom-up analysis in each country
and then consolidating into an overall APAC target
number is better than creating a top-down target for
the region. What looks logical from far away becomes
less obvious on the ground.
For example, Japan is the second-biggest market in
Asia and has the highest per capita spending. But those
numbers do not translate into the biggest revenue
potential for a brand doing business in Japan. Adjusting
strategy and products/services to the complex Japan
market is difficult and time-consuming; more rapid,
initial growth may come from markets like Hong Kong
or Singapore.
The cost of managing Asia’s diversity is high. Diversity
requires a focus on country-level operations and
strategies; these tend to have low economies of scale,
and moving staff within APAC is hard and costly.
Asia often has low prices for products, high costs of
running a business, and the fastest growth is often
for good-enough products and solutions. For Western
consultants looking to build groundbreaking, but
expensive solutions, this environment can be difficult.
Selling value propositions are tough, and salaries and
rents are similar to the West and rising. All those
factors need to be taken into account when planning
your expansion and setting expectations for growth
and profitability.
Historically, Asia Pacific has been viewed by outsiders as a single region, much
as North America or Europe.
However, the reality is that APAC is a fusion of culturally dynamic countries composed of strongly
embracedreligions,personalities,differentmarketmaturitiesandcountlesslanguagesanddialects–allwith
deep-rooted ways of conducting business.
Australia is as different from China as Japan is from India. In addition, micro-market complexities in Indonesia,
Malaysia, Thailand, and Vietnam, among other countries, further challenge any overbroad generalizations.
That being said, we’re often asked about the overarching lessons we’ve learned – too often the hard
way – during our time operating in the region. Knowing these might be the start, but definitely not the
end, of wisdom.

3. APAC: Lessons From A Digital Immigrant
The “Extreme” Importance of Relationships
Immerse yourself in each market (e.g. country or micro-
market) in which you plan to operate, and gain a local
point of view. Cultural differences in communication
and leadership between Asians and their Western
peers are significant. For example, to generalize, Asian
culture stresses respect toward elders, age-based
hierarchy and the importance of consensus, traits
rarely seen in Western management styles.
Establishing deep personal relationships with your
clients is paramount to be successful in Asia -- much
more than is typical for Western companies. For
instance, Chinese business people prefer to conduct
business in informal settings like over dinners or
lounges -- so you should have a good liver and a
concrete stomach. Australian and New Zealanders
prefer the negotiation table similar to how business
is conducted in North America. In Japan, the most
important concept to grasp is that of the overwhelming
importance of personal relationships within the
business cycle. Of all the business cultures of the
world, Japan is one of those most strongly rooted in
the concept that relationships should come before
business, rather than business being more important
than personal considerations.
Trustbuilding is key to being successful in APAC –
business is built on trust and not legal contracts as is
typical in the West. It takes time to build relationships,
build trust and gain honor; however only days to lose it.
Expect to Negotiate
Negotiating contracts and terms in Asia is usually a very
different experience than in the West – with the exception
of Australia (whose business culture, unsurprisingly,
most closely resembles the United Kingdom).
In general, the concept of “saving face” is important
in all Asian markets and determines the way you
communicate – less direct and outspoken than you
are probably used to. China (including Hong Kong) and
Japan are probably the toughest markets in which to
negotiate. Although culturally different, they share
many similar negotiation techniques. Business partners
often push for further concessions after agreements
are made. Also, China and Japan are relationship-
oriented rather than contract-oriented – meaning
that you have to live up to the relationship and high
expectations of quality and service level regardless
of what the contract says. While this characteristic
can have adverse effects on your margins initially, it
also allows for compromises that serve both parties
without sticking to the contract details and getting the
lawyers involved.
Negotiating teams in Asia are often bigger than in the
West, and you will have to figure out quickly who plays
what role and who the decision makers really are.
In China in particular, products are valued above services,
and it is often hard to negotiate a good price for non-
tangible assets you offer (e.g., consulting, innovation) as
the market is not used to paying for that (yet). It helps to
package your offer to look and feel like a product with
clear costs and a measurable value proposition.
It takes time to
build relationships,
build trust and
gain honor;
however,
only days
to lose it.

4. Stories from the field
Brand Messaging: Selling the FIAT Lifestyle in Japan
FIAT Chrysler Japan had recently launched the FIAT 500, and it wasn’t going well.
The traditional elements of the FIAT brand – a long heritage that emphasizes personal
lifestyle, high design, self-expression and a statement of who you are – didn’t seem to
be resonating with people visiting the showroom.
“FIAT is all about the design, the line, the look, the lifestyle, and the brand.”
The FIAT salesperson in Japan had traditionally been focused on the functional needs
of the consumer – performance, color options, seats, etc. The typical sales process in
Japan starts with customer research, then an initial dealer visit – typically with minimum
dealer interaction (looking at the car), followed by more research to build knowledge
and confidence. Finally, a second and final dealer visit is done to test drive/buy.
Yet FIAT’s positioning drives an emotional need and
desire among the target demographic (middle-aged
females). Most of these women weren’t interested in
performance aspects, but rather their association with
the brand image and the quintessential Italian lifestyle
– style, design, fashion, café culture, and love of life.
It wasn’t about comparing specs between different
models but confirming this car would say the right
thing about them.
“In order to sell FIAT within APAC markets, dealers
needed support with telling a consistent FIAT brand
story of self expression, freedom, design, beauty, and
craftsmanship.”
The Solution
Based on the research findings, an interactive sales-
assisted tablet was created to help a salesperson tell a consistent brand story and
capture user interests and lifestyle type. The tool helped customers and salespeople
understand how FIAT fit within their lifestyle.
“Fighting on the empathy of the brand – foreign cars are very hard to sell in APAC
markets, especially Italian ones where German cars are known for quality and
unfortunately not Italian. We needed support tools to help with brand awareness,
quality, design, and the lifestyle that FIAT embraces.”
Quotes from Tiziani Alamprese - Marketing Director, FIAT Chrysler Japan
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5. Plan to Adopt before You Adapt
As large companies continue to invest in digital marketing platforms (DMPs) to
scale brands, the reliance on them for growth into APAC and specifically China is
growing exponentially. What marketers need to remember is that technology isn’t
the only adjustment needed to expand into the region. A combination of providing
an education on what technology can offer -- for both the brand and consumer -- and
discussing what it takes to implement, as well as building relationships and face-to-
face time are all critical criteria to the successful adaptation of your DMP.
There are major differences in user behaviors, code base, governmental policies
and regulations compared to North America, and in most cases European Union.
The differences amount to much more than the translation of content and assets.
Working with established partners with customer platforms that locally integrate
with social, commerce, payment gateways and analytics is a much more efficient
way to leverage efficiency, especially in China. In China, all social platforms are
under constant development; working with local partners who have relationships,
established development processes, and at times proprietary access to information
is a must.
Given how important time-to-market is in Asia, working with local social players
accustomed to the small differences in each market, as well as being able to scale
to support user adoption, is a much quicker approach than building from scratch.
Plan for the Long Term
It is easy to set expectations too high when entering a new, large market like China.
Companies which have operated in the region for years are still relatively new arrivals
by Asian standards. Business in Asia Pacific is a marathon, not a sprint. You need
to commit to the long term, make mistakes and learn from them, be prepared for
surprises and unexpected turns of events every step of the way and stick it out –
otherwise you had better stay home and invest elsewhere.
While it will probably take longer for your company to grow a sustainable and
profitable business in APAC than in North America or Europe, it is worth the time.
Recognize that there is an obligation to see things through and be committed for the
long haul. This includes senior management who should be committed for at least
three to five years on the ground to have an impact. Asian business partners are
turned off quickly if their counterpart is on a one-year expat contract to “learn about
Asia.” Consequently, Asian business partners will not be motivated to invest into
building a relationship.
APAC: Lessons From A Digital Immigrant

6. In Closing
Companies expanding in the APAC region need to
focus on addressing the complexities and differences
within APAC supported by immersion, appreciation,
acceptance and respect of each culture. One last point:
Find a local partner within each market who understands
how to navigate and articulate the cultural nuances.
APAC is a lovely place to expand, and it’s ready with
open arms for expansion. However, you need to work
with the markets as partners and work within their
ways with your guidance and experience and, most
importantly, with respect to their cultures.
If I’m
conversing
with you, I’ll
speak your
language. If
I’m buying
from you,
you speak my
language.
– Carolyn Sostrom2
2
Carolyn Sostrom, “First Impressions Speak Volumes.” Japan Inc. 2001.
Photo credit: PKOM / Shutterstock.com
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