How to handle toothless tigers

Manufacturers and marketers face new and unfamiliar challenges in the Far East as the tiger economies go into decline. David Kilburn assesses how bad the situation has become.

EMI’s revelation that plunging consumer confidence in Asia, mainly Japan, had sent its Asian operations into a first-half loss of 8.7m (compared with profits of 24.9m a year ago) was swiftly followed by Gucci’s warning that sales and profits this year would be hit by Asia’s economic problems. Clearly the party is over for many once upwardly mobile Asians. For those who market to them, it is time for a change in strategy.

In Thailand, the first country to go bust, people are learning to cope with downward mobility. With little to toast, wine imports are plummeting. Sales in the first nine months of the year totalled 540,000 cases, down 22 per cent from last year. Prices for wine and other imports are rising sharply because of the baht’s depreciation, and an August increase in VAT from seven per cent to ten per cent.

Last year, price was not a sensitive issue for products that helped define an upwardly mobile lifestyle. But today, conspicuous consumption is out, and middle-class dreams are being abandoned as people sell their cars and homes. It’s no surprise that the market for Mercedes cars and luxury spacious condos has collapsed. But it is surprising how quickly the markets for daily necessities have begun to change. Even run of the mill saloon car and motorcycle sales are down almost 30 per cent from last year. Some automotive plants have suspended production at least until the end of the year, forcing many of their local suppliers to return to the rice fields.

There is a glut of pork on the market because Thais are passing up what is seen as a luxury meat for lower-cost chicken and fish. Smart restaurants have empty houses as people increasingly eat at home.

Sales of Black Cat, an inexpensive Thai whisky are soaring, while Black Label and other prestigious brands stay on the shelves. Premium-priced brands are not as attractive, no matter how good the quality, or strong the image. The same is true for shampoos and many other personal care products. For companies like Unilever and P&G, which make many of their products in Thailand, there’s a new imperative to develop brands that will appeal to people as they trade down in price and become willing to sacrifice quality.

Frugality has even hit healthcare. The resources of inexpensive but crowded government hospitals are stretched thin, while private hospitals are facing cashflow problems.

At least one private Bangkok hospital, responding to the new cost consciousness, is promoting “bargain births”. The “special delivery” packages at Bumrungrad Hospital include all costs normally associated with delivery of a baby. The hospital is also promoting cut-price open heart surgery for business leaders and others who can’t manage life’s new stresses. “These package deals are exceptional value for people on a budget,” says the hospital.

Similar changes are in store for Korea, where older housewives have already forsaken detergents and washing machines in favour of running water and a solid rock to pound clothes against.

The new environment will be a testing time for marketers who have grown used to meeting the free- spending needs of fast-growth economies and will identify those who have the best marketing skills.

Latest from Marketing Week

Influencers, consultancies and the recruitment crisis: The key topics of conversation at Cannes Lions

cannes lions

Cannes Lions 2018: Marketers turned out in force to advertising’s biggest annual event. But away from the usual talk of purpose and creativity, some big issues such as the recruitment crisis, how advertising responds to the #MeToo movement and cleaning up the influencer marketing space were discussed.


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email

If you are looking for our Jobs site, please click here