The better the question
Is your Asia strategy focused on countries, or customers?
Moving from a geographical to a segmented approach
We helped a leading investment company develop its Asia strategy, with a shift toward a more customer-centric mindset and the creation of new distribution models and innovative partnerships.
For asset managers, Asia is an irresistible yet challenging market: home to the largest slice of the world’s population, and with individual wealth growing faster than in any other area. “The challenge is China,” explains Mark Wightman, EY Partner and Asia-Pacific Wealth & Asset Management Consulting Leader. “Because it is so large it becomes both a massive opportunity and a distraction – businesses can be in danger of forgetting the rest of the region, including markets like Taiwan and South Korea. Our client wanted a strategy that tied thematically with what’s going on across the whole region.”
The company wanted support to move from a geographical to a segmented approach, where similar customer groups can be served across national boundaries. For example, there might be similar retirement trends in Malaysia and Singapore, meaning individuals living there would benefit from common products and channels.
The better the answer
Listening to the voice of the customer
Extensive research helped to test and validate different strategic approaches
Our first step was to obtain in-depth market data for Hong Kong, Taiwan and South Korea and explore key themes for these areas within the wider context of Southeast Asia and Japan.
As well as desk-based research, it was vital to listen to the voice of the customer. Our market research business EY Sweeney conducted primary research into retail investors’ needs and decision-making habits. At the same time, we conducted interviews with institutional investors. Surveys helped our client better understand specific groups (segmented by age, income level, familiarity with mutual funds and other categories), while focus groups dug deeper into why and how people and institutions choose to invest.
“The research allowed us to test and validate a lot of hypotheses,” says Wightman. “For example, investors in Asia can be more aggressive than elsewhere in their willingness to buy leveraged funds, so that might be an issue if a company is very conservative and doesn’t have the right type of products.”
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A strategy based on practical experience
Succeeding in Asia depends on more than just paper knowledge
Once we had all the insights resulting from the research, we were able to help the company build a strategic plan and financial projections.
The plan we proposed included:
- Defining customer segments and value propositions
- Suggesting an optimized distribution strategy, considering institutional and intermediary channels, and employing both traditional and innovative partnership models
- Defining key product offerings
- Forecasting expected assets under management and revenues
Finally, we suggested an operating model optimized to execute the strategy.
“Developing a successful Asia strategy depends on more than paper knowledge,” says Wightman. “You need relationships with regulators and direct practical experience of helping firms on the ground whether with audit, tax or consulting work. In some markets it’s the interpretation of regulation that matters and without such advice what looks good strategically can fail in practice.”
