Carol Zhou is the Senior Vice President of Shiseido Group’s China Business Innovation & Investment and the GM of Ziyue Fund, Shiseido’s beauty-focused investment fund. She unlocks growth drivers  across the globe by leading incubation efforts of internal new ventures, while identifying and investing in external emerging startups. 

In our discussion, Ms. Zhou shared her in-depth perspective on the evolving consumer landscape and Shiseido’s global strategy for innovation and growth. Through continuous innovations rooted in relentless customer-centricity, including ventures into ingestible beauty and medical beauty categories, Shiseido focuses on creating compelling value propositions to continuously win consumer trust, and drive high-quality, sustainable growth.   

How is Shiseido driving growth within your organization?  

Carol Zhou: As an industry leader and the ‘Asian Skincare Expert,’ Shiseido is committed not only to shaping the future of beauty but also to deeply understanding and anticipating consumer needs—transforming insights into strategic brand excellence and sustainable growth drivers. 

Growth is a long-term process, and the key lies in building an enduring brand through vision and consistency. Beyond packaging or storytelling, it’s about stewarding our core values at every touchpoint. Our goal extends beyond reaching a wider audience; we strive to cultivate meaningful consumer connections that inspire loyalty and mutual value creation. 

Shiseido has been increasingly investing in the ingestible beauty (inner beauty) and medical beauty categories. In pursuing high-quality growth, what motivated the decision to redefine the traditional boundaries of the beauty industry?

CZ: From my earliest days at Shiseido, our global CEO recognized China as both our most strategic future market and the ultimate proving ground for global innovation. This innovation extends far beyond product development—it’s about defining ecosystems, reimagining business models, creating unique consumer value and establishing enduring brand equity. 

Our approach to innovation outlines two essential principles. First, comes our commitment to anticipating future trends and staying acutely attuned to market evolutions. Equally important is our dedication to protecting the brand’s core value, ensuring every innovation strengthens rather than compromises Shiseido’s long-term values and heritage. 

The ingestible beauty category (beauty-from-within) came naturally to us. It represents the perfect synergy between Japan’s centuries-old philosophy of holistic beauty and China’s tradition of wellness harmony. 

Shiseido launched its tech-driven ingestible beauty brand INRYU in 2021. 

Medical beauty, in comparison, was a more challenging venture. Initially, there were internal concerns: Is this too radical? But after observing global beauty trends and consumer habits, we recognized that medical beauty is becoming an essential component of people’s daily skincare regimens, potentially displacing traditional premium skincare. As an industry leader, Shiseido must embrace change rather than cling to convention. So, we’re cautiously yet decisively exploring how to empower the medical beauty sector—seizing new opportunities while preserving Shiseido’s core DNA: “people-first” innovations blending “art & science.”  

Shiseido introduced its first medical beauty brand RQ PYOLOGY in China.   

Empowering the medical beauty industry is now a key pillar of Shiseido’s global strategy. We’re leveraging China—the world’s most dynamic and competitive market—as fertile ground for innovation, then scaling successful practices globally.   

With shifting consumer habits, what challenges do you face in brand marketing?

CZ: We don’t react passively. Instead, we proactively build systematic consumer insights and development capabilities, laying the foundation for sustainable, long-term growth. 

With unprecedented information transparency, consumers’ decision-making processes have radically evolved. They no longer passively accept brand narratives—instead they proactively investigate and demand substance. For example, proof points such as ingredients, clinical data and scientific validation are scrutinized, revealing a new generation of discerning consumers. Thanks to platforms like TikTok (Douyin) and RedNote, consumers are often better informed about industry trends than marketers. This shift is rewriting the rules of brand marketing.   

In the past, branding was a “one-way broadcast.” Corporations had control over channels with carefully crafted brand stories. Today, the narrative belongs to consumers—they share, educate and influence. Brands must evolve into enablers. This shift in power dynamics presents new challenges. With people’s attention spans shorter than ever, the pressure is on; brands must deliver value, instantly. 

But the real test isn’t to grab attention—any brand can do that with flashy campaigns. The true measure of success is converting buzz into lasting brand equity: loyalty, advocacy and repeat purchases. Shiseido focuses not just on communicating our core values, but on fostering continuous dialogue with consumers, reinforcing trust through delivering product quality and customer experiences.  

Shiseido launched “ULTIMUNE FOUNTAIN,” a sustainable refill service for the iconic Ultimune Power Infusing Concentrate, promoting sustainability while boosting loyalty. 

Amid market uncertainties, how does Shiseido reconcile bold innovation with risk mitigation when entering new sectors and ecosystem partnerships?

CZ: We take a test-and-learn approach—validating concepts through controlled pilots before scaling, ensuring systems and strategies mature in lockstep. At our core, we prioritize high-quality growth, rejecting short-term tactics like price wars or short-term traffic grabs and instead delivering authentic value that earns long-term loyalty. 

For instance, in medical beauty, we noticed gaps in the consumer journey—the experience from pre-treatment to post-care isn’t seamless. So, we’re exploring how Shiseido can enhance this holistic experience by integrating into the customer journey beyond providing specialized products. By partnering with clinics, we hope to help elevate their services and experiences, therefore increasing retention and customer lifetime value.   

Agility is also critical amid the fast-changing landscape. Internally, we strive to streamline cross-functional collaboration and accelerate decision-making. Externally, we cultivate strategic partnerships that complement our capabilities across the customer journey, allowing us to rapidly innovate in high-potential areas while maintaining our commitment to excellence. 

Finally, what metrics do you prioritize when measuring marketing success?

CZ: When assessing brand performance, I prioritize customer retention—particularly the repurchase rate—as one of the most critical metrics. More importantly, beyond broad brand awareness (which often correlates with marketing spend), I place greater emphasis on meaningful brand recognition among precisely defined consumer segments. 

This requires a sophisticated approach across different stages of the marketing funnel. At the upper funnel level, we focus not just on impression volume, but on expanding reach through precision targeting. We develop specific consumer personas based on our brand strategy, extending beyond basic demographics to incorporate lifestyle patterns and purchase drivers. For instance, ingestible beauty consumers may be primarily motivated by wellness consciousness or fitness routines. 

At the lower funnel, our emphasis shifts from short-term conversion (which can be artificially inflated through promotions) to driving repeat purchases and long-term value.  

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Ms. Zhou successfully led the launch of Shiseido’s first ingestible beauty brand, INRYU, in China. As the head of Shiseido’s ingestible beauty division, she will further expand the brand portfolio in this category to deliver greater value to increasingly sophisticated beauty consumers. Additionally, as the General Manager of Ziyue Fund, Shiseido’s beauty-focused investment fund, she continues to concentrate on high-growth sectors in the Chinese market, exploring new brands to enrich the Group’s business portfolio while creating synergies with existing brands. 

In April of this year, Ms. Zhou introduced the Group’s first high-end biotech skincare brand, RQ PYOLOGY, in Shanghai, offering a full-cycle medical beauty and skincare solution, fusing medical-grade efficacy and cosmetic elegance. The brand will partner with premium specialized beauty clinics to provide safer, more effective, and precise full-cycle skincare solutions for Asian skin through high-performance medical beauty products and outstanding customer experiences. 

Ms. Zhou has held senior management positions at several multinational corporations, including Unilever, L’Oréal Group, Burberry, and Marriott International, where she led brands in cross-regional and cross-sector global strategic innovation. She graduated from New York University’s Stern School of Business and holds an MBA from the Hong Kong University of Science and Technology.

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Da Si is Vice President and Chief Brand Officer of BOE Technology Group. He oversees BOE Group’s global branding and communications, driving strategic support for the group and its businesses worldwide. 

In our conversation with Mr. Si, we uncovered how BOE is driving brand-led growth and transformation amid market complexity. By evolving from a traditional B2B manufacturer to a human-centric brand, BOE is activating both internal agility and external brand strength. The company is fostering a change-ready culture, deepening cross-functional trust, and forming ecosystem partnerships—while rapidly deploying innovation to deliver business results and build brand impact. 

How has BOE’s growth strategy evolved during its transformation from a manufacturer to an IoT technology leader?

Da Si: In recent years, BOE’s growth engine has shifted to focus on application-led innovations. We have moved beyond the traditional B2B hardware-centric business model by integrating our advanced manufacturing capabilities, core R&D strengths and scaled ecosystem resources to accelerate our transformation into an IoT innovator. 

The transformation is fueled by our relentless drive to redefine business boundaries—from automotive displays to gaming screens. Today, display-powered IoT solutions already generate over 30% of the group’s revenue. 

BOE partnered with Geely Auto to develop 8K Ultra-Wide Automotive Display 

How does brand play a role in your transformation?

Da Si: The role of brand is pivotal. Whether expanding globally or innovating for different applications, strong brand equity remains an indispensable competitive advantage. BOE is now adopting a dual-engine strategy that synergizes technology and brand, where technological innovations and brand building reinforce each other. 

In 2021, BOE pioneered China’s first semiconductor display technology sub-brand and product portfolio — comprising premium LCD (ADS Pro), advanced flexible OLED (f-OLED) and cutting-edge glass-based MLED (α-MLED) technologies. This move redefined industry standards, providing end consumers with high quality products and greater values driven by both the technology and our brand. 

We’ve moved beyond conventional Business-to-Business or Business-to-Consumer frameworks to adopt a Human-Centric (Business-to-Human) marketing philosophy.

Whether engaging business clients, end consumers or supply chain partners, we’re fundamentally communicating with people—where every decision-maker is first and foremost a consumer in daily life. Thus, we strive to balance technological expertise and human connection in our brand strategy and communications. Through consistent storytelling, we strengthened our brand image and enhanced consumer experiences. This shapes BOE’s brand as an innovative tech leader. 

When technology becomes tangible, half the battle is won. We’re revolutionizing how technology communicates, replacing jargon and spec sheets with real-world scenarios and experiences that let users feel the technology’s value. In our branding, we deliberately avoid dogmatic promotion, opting instead for experiential engagement that embeds innovations from datasheets into users’ lived experiences. 

「Hello BOE·2023」Brand Exhibition 

Why is long-term brand building necessary?

Da Si: Brand building is inherently a long-term commitment. As a leader in the semiconductor display industry, we’ve shifted our focus from bolstering our market leadership to demonstrating “how our innovative technologies empower, enhance and transform industries and lives.” This way of storytelling not only humanizes our technology, but also makes BOE’s brand more youthful, energetic and relevant. It also helps consumers better recognize BOE’s capabilities and innovations, their applications in daily lives, and our partnerships across the ecosystem. 

Amid global uncertainties, our brand power and human-centric values have strengthened our business resilience. Every effort we make today is an investment in the future: the more solid our groundwork, the greater our ability to withstand risks.

When challenges arise, we’ll be more adaptable and recover faster. That is the true strategic value of brand building. 

How does BOE enhance its brand influence through ecosystem partnerships?

Da Si: Building a brand can’t be done in isolation—it requires collective momentum. That’s the thinking behind our ”Powered by BOE” vision, where we co-create brand value through strategic partnerships. We’ve even established a dedicated Brand Partnership team within our Brand Center to drive two key collaboration models: deep alliances with industry supply chains (i.e., automakers and device manufacturers) and cross-sector partnerships (i.e., museums), blending hardware excellence with compelling content-driven experiences. 

Take our collaboration with the Palace Museum as an example: as its strategic digital transformation partner, we undertook all digital exhibition projects for the Museum’s centennial exhibition. When audiences marvel at the perfect integration of traditional culture and modern technology, they naturally pay attention to the technology provider behind it. This partnership model subtly marries technology and culture while steadily ingraining BOE’s brand value in people’s minds. 

BOE jointly hosted the immersive digital exhibition “The Way in Patterns” with the Palace Museum and Tencent. 

In esports, BOE has teamed up with e-commerce giant JD.com and ecosystem partners to form the “Best of Esports Alliance.” This initiative establishes a comprehensive ecosystem spanning e-commerce platforms, live streaming services, esports organizations, hardware manufacturers and device brands. The alliance has already attracted major global players such as JD.com, Intel, AGON, ASUS, Lenovo Legion, Mechanic, Mechrevo and MSI, connecting with esports enthusiasts while fostering a collaborative esports community. 

Two years post-implementation, this ecosystem approach has delivered strong outcomes: continuous improvement in consumer brand recognition and additional partnership opportunities across business units.

More importantly, this model is catalyzing meaningful changes within our group, transforming internal collaboration mechanisms and organizational mindsets. 

How do you foster agility and open thinking in your marketing organization to enable cross-functional collaboration and better results?

Da Si: I always emphasize two core principles with my team: First, we must reject complacency and embrace bold innovation. Second, we should apply critical thinking before implementing any directives—even those from leadership. Effective brand building demands disruptive thinking that combines creativity with healthy skepticism—only then can we surpass our own expectations. 

In change management, I consider internal communications to be as vital as external messaging—often more so. This becomes particularly crucial when overcoming operational bottlenecks or driving rapid transformation. Our approach establishes a comprehensive communication framework: securing executive buy-in through top-down alignment, fostering interdepartmental consensus through lateral collaboration, and unlocking grassroots innovation through bottom-up engagement. Most importantly, we validate every initiative with concrete results—measurable outcomes ultimately speak louder than rhetoric. 

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Since joining BOE in December 2020, he has spearheaded the company’s transformation into an IoT leader, achieving key breakthroughs: 

• Revamped BOE’s master brand architecture to reflect its IoT pivot, launching China’s first semiconductor display technology sub-brand and shifting competition from scale-driven to value-driven.
• Championed BOE’s “Empower IoT With Display” strategy through integrated campaigns, reinforcing its market leadership. 
• Pioneered innovative initiatives like ‘Hello BOE’ exhibitions and China’s first tech-edutainment show, “BOE’s Wonder Lab of Worry Solutions,” boosting awareness and engagement among end consumers. 
• Introduced microfilms and video-driven storytelling to humanize BOE’s brand, conveying “BOE is Always with You” through warmth and innovation. 

With over 20 years of brand and marketing leadership across China and APAC, Da Si has held executive roles at Motorola, AMD, and Amazon before joining BOE. 

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For over a decade, the role of the marketing organization has undergone a continuous evolution. It has become a growth engine with the expectation to drive greater revenue for existing businesses while also identifying, sizing and pursuing new sources of growth.  

Under intense competition, businesses in Asia and across the world are faced with an urgent need to identify new growth pathways within saturated markets. Meanwhile, the pressure for financial performance, combined with the rise of digital technologies and AI, as well as the stronger capability to quantify results in demand marketing, have made the tension between long-term brand building and short-term demand generation increasingly evident. 

Today’s marketers are being asked to do more with less. Balancing long-term brand building with short-term demand generation has become a pressing issue.  

We interviewed three senior marketing experts from PepsiCo, Suntory Global Spirits, and WARC to share their insights about balancing brand and demand marketing: 

In today’s market, do brands today still need to communicate clear values or a point of view? 

Jenny: Amid fierce competition, brands need strong values more than ever to build a competitive edge. Consumers are reevaluating their consumption priorities and expect brands to align with their values. A brand’s attitude must not only stay true to its DNA but also keep pace with the times. Brands need to understand the differences between subcultures, ensure authenticity and differentiation, and express empathy and understanding toward consumers. 

Lizzie: I completely agree. Many brands today chase short-term performance but overlook the fact that short-term gains are built on long-term brand equity. Brands need to continuously reinforce and solidify their values to remain resilient in a fast-changing market. Simply put, short-term gains cannot exist without long-term brand building. 

Yan: I believe every brand needs a clear value proposition, but not every brand needs a point of view, which must be authentic. My take is: if you don’t have a genuine point of view, don’t fabricate one. We have seen numerous brands take stances on social issues but come across as insincere. If a brand truly has a set of core beliefs and knows how to bring them to life — in a way that is authentic and true to your DNA — that’s when it becomes a powerful brand strategy. 

What is your perspective on the strategy of dominating a specific sub-category for all relevant consumers, as opposed to initially focusing on a distinct group of target consumers? 

Jenny: These two approaches are complementary. On one hand, identifying and capturing a key group of consumers helps brands expand market share and build associations. On the other hand, focusing on sub-categories enhances brands’ competitiveness in specific sectors. However, brands need to establish multiple category entry points (CEPs), including emotional and occasional associations. By broadening these entry points, brands can more easily become the top choice in consumers’ minds. 

Yan: I think it’s important to align your strategy with the brand’s resources and market realities. In highly competitive environments where hundreds of brands vie for limited opportunities, it may be more reasonable for niche brands with limited resources to focus on winning with specific channels or consumer groups, rather than attempting to boil the ocean. Another factor to consider is whether your brand has the potential to gain unprompted advocacy — i.e., whether your customers already promote your brand on your behalf. This is often more effective in capturing niche audiences than large-scale advertising. 

Lizzie: I believe the increasingly niche sub-categories are the efforts of brands seeking growth when they have little choice in a saturated market. Truly sustainable growth requires balancing both types of strategies — starting with specific audiences and addressing their needs that are more universal before expanding to a wider audience, creating traction across different audience groups. This strategy combines focus with scalability. 

During an economic slowdown, when consumers are more cautious in their spending, how should brands adjust their marketing strategies? 

Yan: The answer to that question depends on what you’ve been doing in the past. If your sales have been mostly fueled by brand equity, you’ll be fine – think Hermès reporting surging growth quarter after quarter.  Cautious consumption is about searching for better value, which is not always equivalent to a lower price. The famous “lipstick effect” as well as the latest reports on China’s shopper behavior across various product groups, suggest that consumers want to reward or treat themselves even more when the future is no longer as certain as it used to be. 

Lizzie: Absolutely. The market is oversupplied and consumers are more rational, But rationality doesn’t mean they only care about functionality. If a brand only offers functional benefits, there are too many generic, white-labeled alternatives, making it impossible for brands to charge a premium. Therefore, brands increasingly need to solidify their core assets, build emotional connections with consumers, and create a competitive “moat” around the brand. For example, while there exist many cheaper alternatives to Uniqlo, its brand philosophy of “LifeWear” resonates deeply with consumers, who still choose to buy its products. 

Jenny: I’d like to add that even during a consumption downturn, brands shouldn’t rely solely on price cuts and discounts as a tactic, as this harms long-term brand loyalty. Consumers nowadays are reevaluating the balance between price, quality and service. The key question becomes: is your product truly worth its price? If the answer is yes, consumers will still find it valuable even during a downturn. 

What are the key challenges in integrating brand building and demand generation? What are the experiences of your organization?  

Yan: The key challenge is — and has always been — reaching the right balance in building physical and mental availability. At Suntory Global Spirits, we start by leaning on growth truths that are deeply integrated into our three-year and annual planning. Those truths provide directional guidelines on the split between demand creation and demand conversion, specific to brand life stage and nuances of the specific market. We deploy a cross-functional approach for course correction and continuous improvement, providing a forum to address topics beyond mere performance management, such as consumer feedback on innovation, challenges in specific channels, and the impact of marketing activities.  

Jenny: I think the biggest challenge is balancing short-term and long-term strategies. Treating brand building and demand generation as opposites limits overall marketing effectiveness. From company culture to budget allocation and creative processes, we need to “do both,” fundamentally shifting away from an either-or mindset. 

Lizzie: Integration of brand and demand is a very difficult challenge. It requires brands to create more comprehensive evaluation criteria — not just focusing on sales data but also tracking brand health. In terms of talents, besides specialists, we need more generalists. Marketing leaders also need more space for regular assessments and reflection. 

What role does consumer insight play in the marketing organization? 

Yan: Insight is a starting point for the work of marketers. Synthesizing insights into briefs or recommendations has become increasingly difficult as the number of sources has proliferated. It’s amazing how AI makes this process both easier and more complex at the same time. In a world of data abundance, qualified insights teams, strategists, as well as senior marketers who can foster high-quality judgment within the organization, are more important than ever. 

Lizzie: The insights department is a core capability of any organization, driving the shift from a manufacturer-centric view to a consumer-centric one. In a complex market, we need to cut through the noise, identify key insights and synthesize them to create tangible growth opportunities for the organization. Data alone doesn’t speak; its true value comes from human interpretation. Staying curious and adopting an outside-in perspective is essential to truly understanding consumer needs. 

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Prophet’s research demonstrated that pitting brand against demand marketing limits  impact. Organizations that adopt an integrated approach are more likely to drive outstanding business results. We identified six key actions: 

• Ensuring brand and demand teams share strategy and focus on business outcomes 
• United by a passion for delivering against customer needs 
• Integration is not about compromise, but about being great at both, and combining creativity and logic to get there 
• The best organizations know it won’t be easy – they expect to fail sometimes but enjoy the ride 
• Thinking long and short-term at the same time with measurement systems that track both 
• Marketers are inside of, and part of, organization ecosystems working closely with CEOs, CFOs, CTOs and sales 

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As competition intensifies and consumers grow increasingly fragmented, brands today must find ways to identify a precise pathway for growth. A successful growth strategy relies on a meticulously crafted portfolio strategy that acknowledges growth sources from layered perspectives. It shouldn’t merely react to present market dynamics but also anticipate future shifts in demand. 

To accomplish this, it’s critical to construct the demand-to-growth landscape, which serves as a pivotal initial step for companies to reach their growth ambitions. 

Define the Portfolio Strategy with a Demand-to-Growth Landscape 

In a previous article, we introduced the demand-to-growth landscape (hereinafter referred to as demand landscape), a systematic study that decodes category opportunities, and how it is best used to shape portfolio strategy, inform brand positioning and refine product portfolio. 

Operationalize the Portfolio Strategy to Accelerate Growth  

After developing a robust portfolio strategy using the demand landscape, leaders must then pinpoint the strategic anchor points within their categories for execution. Bill Gates once aptly stated, “The most brilliant strategy won’t lead to success unless it’s executed effectively.” This rings especially true in today’s business landscape, where marketers are required to show measurable results with every investment.  

Depending on the business and industry, the best way to operationalize and execute the portfolio strategy might look different. Here, we highlight two key applications: 

Application 1: Managing Consumer Segments Through the CRM  

The approach below offers an effective solution to companies aiming to utilize CRM effectively to manage strategic consumer segments from end to end.  

Leveraging the CRM: For companies heavily involved in digital and direct-to-consumer (DTC) channels, particularly in the apparel and beauty sectors where customer loyalty and retention plays a vital role, the CRM system is an indispensable tool. However, marketers often struggle with the vast amount of unorganized customer data, unable to capitalize on the valuable assets to drive meaningful engagements. Incorporating the portfolio strategy could offer a unique solution. 

Evaluating the Portfolio Strategy: A portfolio strategy enabled by the demand landscape analysis unveils how different brands under a business portfolio should capture different consumer segments. It’s crucial to strengthen the value exchange between these brands and their designated consumer segments, in order to guide consumers toward purchasing the brands and products designed for them. Throughout this process, brands must take an agile and iterative approach to ensure investments yield the desired outcomes by establishing effective methods for measuring progress and learning from efforts. But how? 

This is where the CRM system and the portfolio strategy come together. To effectively achieve the aforementioned goals, it is imperative to map the strategic consumer segments of the demand landscape against existing CRM data, i.e., tagging each individual consumer with the corresponding segment.  

Once each customer profile is categorized into its respective strategic consumer segment, brands are able to monitor segment growth by analyzing CRM data, thus indicating the effectiveness of the portfolio strategy and its execution.  

Advanced organizations may also synchronize digital and e-commerce efforts to customize product recommendations and content marketing to each customer based on the portfolio strategy (i.e., brand, product, and proposition relevant to each individual), thus accelerating strategy execution. 

Approach 2: Landing Portfolio Strategy at Retail Channels Through OBPPC 

This approach is particularly critical for companies in the consumer packaged goods (CPG) sector, where navigating diverse consumer needs and a complex retail environment is paramount. With the demand landscape approach, companies can formulate a portfolio strategy aimed at capturing distinct consumer segments and consumption occasions. However, they must also differentiate themselves at the moment of truth to meet the unique preferences of diverse shoppers within each channel. 

Hence, there is an opportunity to bridge the demand landscape and the Occasion Brand Price Pack Channel (OBPPC) models. The OBPPC framework was initially introduced by Coca-Cola to enhance on-channel execution. In essence, this model ensures that companies cater to varying shopper needs by offering the appropriate brands, packages, and price points within target channels. By providing a tailored assortment, more consumers can find satisfaction, and the company can strategically shift the demand curve for those who are less price-sensitive. 

All shoppers are different. They have different values and different preferences which lead to different price elasticities. We can create value by recognizing the differences in purchase occasions, and by offering a unique assortment of brands, packages and price points for each channel they are served by.

The Coca-Cola Company

Bridging the demand landscape with the OBPPC model offers a robust approach to operationalizing the portfolio strategy.  

By systematically following these steps, companies can effectively align their portfolio strategy with consumer demand and channel dynamics, maximizing opportunities for success in the marketplace. 

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Contributors: John Wu, Associate; Yang Yu, Associate

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Our latest commissioned global research study conducted by Forrester Consulting on behalf of Prophet explored how “human-centric” organizations use human-aligned change management principles to design transformation initiatives and align their business strategy around the human. We have found that human-centric companies are more likely to see results from their business transformation efforts. In fact, human-centric organizations are 10 times more likely to achieve revenue growth rates of 20% or more. Moreover, these organizations experience a remarkable 25% boost in employee collaboration, a significant 23% increase in shareholder value, an impressive 48% improvement in time to market, and a substantial 28% higher likelihood of pioneering groundbreaking innovations, among other remarkable statistics. 

We believe these findings underscore the profound impact of human centricity, which involves prioritizing people, culture, and empathy within the context of organizational transformation. By doing so, organizations can harness the benefits of enhanced collaboration, increased shareholder value, and sustainable change, ultimately positioning themselves for growth and resilience in today’s fiercely competitive business landscape. 

Embracing Human-Centric Transformation: The 4 Pillars of Success 

In the dynamic business landscape of the APAC region, achieving substantial growth requires consistent strategic recalibration. Our research showed that driving long-term transformational growth requires a shift in focus from operations- and revenue-driven objectives to ones that prioritize the needs and experiences of their customers and employees.  

In this article, we identified four key areas of how companies can embrace human-centric transformation through a multifaceted approach. 

1. Enhance Customer Experience (CX) by Better Capturing and Predicting Customer Needs 

Our research underscores a strong focus on high maturity and human-centric companies on understanding consumers through data and analytics and improving customer experience (CX). These transformation value drivers are among the top three priorities for close to half (44%) of the high-maturity respondents. 

However, it is a very different scenario for APAC companies – there is a predominant focus on products and services (54%) rather than a broader consideration of CX (30%).  

Hence a key opportunity for Asian businesses is to pivot their transformation drivers towards enhancing CX by harnessing the power of data analytics. 

Nevertheless, there are pioneers in China who already embed human centricity in their core business strategy. NIO, a prominent player in the electric car industry, stands out as a prime example of a holistic and human-centric approach to its business. The company takes pride in its user-first operation model, placing an unwavering focus on creating long-lasting touchpoints and pleasant experiences across the customer life cycle. One of NIO’s leading innovations is its Power Swap Station which provides users with battery swapping as an alternative to conventional charging. NIO decided to invest in establishing and operating the service on its own, instead of using a third-party provider, in order to maintain the highest customer satisfaction. “User service may show a loss in financial statements, but it can also be interpreted as an investment in customer satisfaction, which I think is the more appropriate perspective,” said Lihong Qin, President of NIO.  

2. Embracing Purposefulness as a Cornerstone of Brand and Culture for Employee and Customer Engagement 

Purpose is more than a buzzword; it is a strategic imperative. Those who embrace this approach are well-positioned for success in the human-centric era. Companies around the world are increasingly recognizing the importance of anchoring their brand identity and organizational culture around a clear purpose to engage both employees and customers effectively.  

According to our research, 56% of human-centric firms globally firmly believe that their culture enables purposefulness in everything they do (compared to 44% in APAC), which shows that those who operate with a clear purpose tend to excel in their transformation endeavors. However, many APAC companies making strides in commercial performance and technological innovation often deprioritize fostering purposefulness with a human-centric lens. Moreover, compared to global counterparts, only 50% of APAC companies strongly consider “society”, “customers” and “communities” as very important transformation initiatives, while only 37% prioritized “employees”.  

Companies in the APAC region have a significant opportunity to strengthen their approach to transformation by defining a clear purpose and applying it to everything that they do. This involves shifting the focus to not only placing a greater emphasis on consumer experience but also broadening the lens to fostering a human-centric culture both internally and externally. It is crucial to align employees with the company’s purpose by developing a clear Employee Value Proposition (EVP) and effective employee engagement programs. Additionally, companies must consider the societal implications of business actions and Environmental, Social, and Governance (ESG) principles to create a more profound and sustainable impact. 

Sea, a Singapore-based tech company and holding company of Shopee serves as a compelling example of how purpose can be seamlessly integrated into an organization’s human-centric culture. Sea’s overarching mission is to enhance lives and build more connected communities through technology. As it grows, Sea remains committed to nurturing the growth of the broader digital ecosystem and helping achieve digital inclusion for various local stakeholders who are underserved. For example, Shopee, one of the largest global e-commerce platforms, drives e-commerce access to local communities across hard-to-serve regions while also enabling local SME entrepreneurs to succeed. From launching a variety of training programs and platforms like Shopee University and Shopee Seller Center to working with local governments to establish local e-commerce hubs, the firm actively supports local communities to accelerate their digitization journey and grow their businesses. By embracing purposefulness through business initiatives, Sea’s mission transcends boundaries, benefitting all its stakeholders which include consumers, small businesses, local communities and employees.  

3. Empowering C-Level Transformation Leadership 

Another key finding from our research resonates clearly – human-centric transformations are most likely to thrive and yield tangible results when guided by C-level management who leads through their own actions. 79% of human-centric organizations have C-level leaders who lead their company’s transformation agenda, while only 70% of the APAC companies reported the same.  

Human-centricity goes beyond just lines of mission statement, it should be translated into tangible actions within the organization. Hence there is a need for a more direct and hands-on stewardship from C-level executives in APAC to drive crucial transformation initiatives forward. 

A striking illustration can be found in Ping An, a leading financial services company in Asia, which experienced a threefold increase in digital users over the past five years and doubled its retail customer base.  Ping An made the strategic appointment of Jessica Tan as CIO in 2013, who was later promoted to co-CEO in 2018, to play a pivotal role in architecting Ping An’s business transformation into an innovation-driven business. Tan’s leadership brought importance to innovation and a forward-thinking approach, launching various industry-leading initiatives across fintech, healthtech and AI-based offerings. Ping An has invested RMB100 billion over the past decade and committed to investing twice that over the next five years. It now ranks 7^th in the Forbes Global 2000 and is the largest insurance company in Asia today.  

The Ping An example serves as a testament to the transformative potential of C-level leaders who actively lead by example, underscoring the importance of leadership in driving human-centric transformation and fostering a culture where technology and innovation thrive through collaboration across teams. 

4. Building Internal and External Trust in the Brand 

Driving near-term revenue growth by enhancing brand recognition and consumer insights is indeed important for an organization to survive in this unpredictable economy. However, the key to achieving sustainable growth is through transformation that is truly human-centric, which requires making focused and consistent investments in building both internal and external brand trust.  

Our research indicates that amid the fervor for technological progress, investments in human capital development and brand trust often find themselves on the back burner among APAC companies. In fact, 98% of human-centric companies globally are investing to maintain trust in their brand while only 85% of APAC companies are doing so. APAC companies are also investing less in their employees as compared to human-centric companies  (81% vs 98%).  

Gojek is a powerful example of the paramount importance of maintaining a steadfast commitment to social impact and brand trust, even when confronted with the challenge of plummeting share prices. Gojek’s continuous investments in initiatives designed to support financially vulnerable riders and drivers, and its commitment to sustainability goals exemplify a forward-thinking approach. For example, recognizing that many drivers prefer greater flexibility and freedom, Gojek continues to update its daily incentives scheme like its Monthly Loyalty Rewards program which allows drivers to have more stable and sustainable earnings. By showcasing such a strong commitment to the community, this approach can significantly elevate internal brand loyalty, build external trust and maintain unwavering resilience, even amidst the most turbulent economic storms.  

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For consumer brands, China remains one of the most attractive lands of opportunities, despite the disruption from the pandemic. The rise of a huge middle class with enormous spending power makes the market a must-win, but not necessarily an easy one. Different generations of consumers are developing vastly diverse lifestyles, needs and preferences, and competition between local and international, startup and traditional companies is increasingly intense. Regional differences require highly nuanced go-to-market strategies beyond adapting to the local digital ecosystems.   

To navigate this environment effectively, companies need to answer two fundamental questions: Where should they play to unlock growth? And how can they win with differentiated and relevant value propositions? These seemingly straightforward questions can be daunting as they require careful and holistic considerations regarding the entire business – how to structurally define consumer opportunities with so many forces and fast-moving trends at play? How to drive organizational alignment around key growth spaces? How to develop a high-level strategy with concrete actions across brand, product and channel execution? 

Introducing Demand-to-Growth Landscape 

At Prophet, we partner with leading consumer brands to answer these strategic questions through a comprehensive analytic method called the Demand-to-Growth Landscape. In a nutshell, Demand-to-Growth Landscape is a systematic study that examines the key dimensions (e.g., consumer segments, consumption occasions, etc.) influencing consumer demand for a certain category. By drawing a map with these dimensions, we define and synthesize consumer growth spaces, and thus blend value lenses and consumer lenses to decode each opportunity.   

There is no one universal formula for how companies should utilize the Demand-to-Growth Landscape. However, those that succeed often follow three best practices. 

1. Customize the map.

Although consumer segments and consumption occasions are commonly used, particularly by companies in the consumer packaged goods category as key dimensions to build the Demand-to-Growth Landscape, companies have to think through what works best for their category and the intended usage of the tool. For instance, price tier can be applied as a dimension for the fashion category as it’s often a key factor in consumers’ purchasing decisions. 

2. Enrich with human insights.

While the quantitative study is helpful for identifying and profiling growth spaces, companies will benefit from deep listening to gain a thorough understanding of their consumers’ motivations and experiences to inspire actions. 

3. Create and sustain competitive superiority.

Once companies have decided which growth spaces to focus on, they have to build a competitive advantage. They can learn from the Superiority Model, initially developed by P&G, to define the most critical levers for their category, and be diligent in applying the framework to guide actions and track results.   

Source: Proctor & Gamble

How Your Company Should Utilize the Demand-to-Growth Landscape for Different Strategic Objectives 

The Demand-to-Growth Landscape can help inform strategic decisions across portfolio, brand and product levels. Below, we outline three tried-and-true applications of the approach, each with a client story to illustrate how it can positively impact the business. 

Develop Brand Portfolio Strategy  

Demand-to-Growth Landscape provides foundational insights for developing a brand portfolio strategy. Leaders who oversee large portfolios should ask: 

• Which are the growth spaces to prioritize?  
• How many brands are required to win these spaces?  
• What is the role of each brand?  
• Is there any opportunity to rationalize the portfolio or tap into white space?  

Our work with sportswear and lifestyle group 

Our client is a global leader in sports and lifestyle products with a diverse range of apparel, footwear, accessories, and equipment. Its business needed to scale but was facing difficulty, as several of its brands were playing on top of each other.  

Source: Unsplash

Prophet was engaged to help the client gain a better understanding of its key global markets, including China and the US, and provide strategic recommendations for go-to-market actions. We started by uncovering eight consumer segments, which were prioritized based on spending power, category engagement and brand perceptions. We then built a Demand-to-Growth Landscape based on these consumer segments and occasions, highlighting growth spaces to expand the business with the current portfolio of brands. To tease apart the individual brands’ growth strategies, Prophet defined clear swim lanes on the landscape, aligning on “centers of gravity” for each brand to prioritize investment and brand building.  

Define Brand Target and Positioning 

Demand-to-Growth Landscape offers critical consumer insights to help inspire a unique brand positioning. CMOs seeking to elevate their brands should ask:  

• Who are the consumers in the target growth space?  
• What do these consumers need the most, and how can my brand connect with them?  
• What are the functional benefits required to support the emotional value?  

Our work with a leading CPG company 

Our client, a global food and beverage giant, sought our expertise to help reposition one of its key brands following a successful collaboration on its China brand portfolio strategy. In recent years, the brand has become staler, facing challenges in attracting young consumers.  

Source: Unsplash

To reinforce the brand strategy, we thoroughly examined the previously established Demand-to-Growth Landscape data in order to identify the most critical consumers within the brand’s target growth space. We delved into demographics, including age group and city tier, as well as their life motivations and category attitudes and behaviors. Additionally, we conducted deep listening research to capture micro-stories that brought the brand muse to life. Leveraging these insights, we identified a potent brand positioning territory that deeply resonated with the younger generation’s yearning for genuine connections, especially within the home environment following the pandemic. 

Identify Product Portfolio Opportunities 

By combining Demand-to-Growth Landscape with Superiority assessment, businesses can gain valuable insights to uncover product opportunities. Marketers who own a vast product portfolio should ask: 

• Where does the brand have potential product gaps on the demand landscape? 
• Where do the brand’s existing products fall short compared to competitors? 
• Where does the brand have competitive products but need to improve its messaging or product availability? 

Our work with a leading apparel company 

Prophet was appointed by a leading apparel and footwear company to accelerate its transformation from a product-driven to a consumer-centric approach to its brand strategy in China. The company had diverse products, each with functional benefits, however, they often overlapped and lacked a distinctive focus in messaging.  

Source: Unsplash

Through the Demand-to-Growth Landscape approach, we delineated each growth space based on opportunity size, price tier, consumer profile and goals, and desired product drivers. Subsequently, we collaborated with the client’s product experts to objectively map their product portfolio and those of key competitors onto the landscape, conducting a thorough Superiority assessment. This exercise enabled the client’s senior leadership team to achieve alignment and make commitments to a series of product growth initiatives, bringing confidence to revitalize their growth momentum. 

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According to an alarming statistic from market research firm Kantar, 74% of consumer goods startups in China were eliminated after their first three years of operation. Brands are struggling with how to sustain growth in the face of increasingly sophisticated yet “disloyal” consumers while growing competition is being exacerbated by an expansion of channels and consumer data. Meanwhile, a higher level of accountability is expected of marketers. Therefore, marketers today are under intense pressure to make every dollar count, prove returns and drive impact.  

In Prophet’s latest report, “Brand and Demand Marketing: A Love Story,” we examined how marketers can use both brand and demand marketing to achieve their short and long-term objectives and maximize marketing ROI. Below, we share our learnings from across the globe as well as important nuances for Chinese marketers, unveiling the key to building sustainable brands through balancing brand and demand marketing efforts. 

Brand and Demand Opportunities Throughout the Customer Journey 

Brand marketing typically describes efforts to drive awareness of and preference for a company, product or service, while demand marketing seeks to compel audiences to act immediately (e.g., purchase, click on an offer, sign up for a newsletter). Many marketing organizations experience significant tension between brand building and demand generation – a tension we believe undercuts growth and harms performance.  

Prophet introduces the brand and demand maturity model. It lays out an actionable roadmap for how different stages of a customer journey may lean more on brand or demand. But the opportunity is to always show collective value for each moment. 

Hungry for Growth but Missing Out on CLV 

When asked about their prioritized business objectives, Chinese marketers demonstrate remarkably expansionary mindsets, especially when compared with other regions. They pursue new segments, new business, increased shares and are full of ambitions to expand their reach. However, they tend to focus less on levers that drive CLV (Customer Lifetime Value), such as increasing sizes of orders and repurchase rates. 

Top Priorities in the Past 12 Months

Q: Which of the following business objectives, if any, were the top three priorities for your company in the past 12 months? (Rank 1 results) 

This mentality is likely driven by the fact that marketing teams in Chinese companies tend to shoulder more growth-driven accountability than the average global marketers, with twice the amount of involvement in near-term P&L management, revenue growth and operations. 

This propensity is also evident in the top KPIs Chinese marketers focus on when measuring the success of their marketing campaigns. They are significantly more likely than their global peers to track return on advertising spend (ROAS) and revenue generated, while less likely to consider brand awareness, brand preference and CLV among their top three metrics.  

Top Performance Metrics for Marketing Campaigns 

Q: Which of the following are the top five metrics your company tracks performance of marketing campaigns against? (Rank 1, 2 and 3 results) 

In keeping with the whole customer decision journey, we believe that they place a narrow focus on the left side of the model – persuading customers to choose and buy – while ignoring the enormous potential of the entire CLV contained on the right side of the model – the ownership journey.  

For many of China’s fastest-growing new consumer brands, for example, repurchases, referrals and brand communities are largely being driven by transactional benefits (e.g., free gifts, cash back or steep discounts), instead of brand understanding and advocacy. This is fundamentally still a demand-led approach that is unsustainable in the long term.  

As a next step, in addition to the buying experience and short-term conversion, Chinese marketers should extend CX excellence to the ownership journey to maximize CLV. Meanwhile, a more holistic set of metrics should be used to assess impact and success across all activities and tactics.  

Taking Brand Marketing to the Next Level 

Chinese marketers are particularly skilled at demand generation and have created a variety of effective tactics (private traffic activation, KOL/KOC matrix, etc.) to attract customers. Most new consumer brands succeed by leveraging short-term demand generation tools (e.g., low prices, viral products).  

On the other hand, the explore and advocacy stages, where brand marketing initiatives should take the lead, tend to be undervalued. Brands rarely give consumers the opportunity to actively engage and resonate with the brand’s point of view, story and value proposition. Thus, the customer retention rate fueled by recognition and loyalty is unable to increase due to a lack of brand pull.  

Despite the difficult nature of balancing brand and demand efforts, we’ve highlighted a few examples below of consumer brands in China that are standing out in a highly competitive market by excelling in explore and advocacy. 

PMPM: Attracting New Customers Through an Inspirational Brand Story

(Image source)  

While the beauty industry has long relied on hero products, startup skincare brand PMPM is built on a distinct emotional foundation that speaks to consumer truths. Through a clearly defined value proposition, “spirit of exploration,” PMPM focuses on creating high-quality products with natural ingredients sourced from around the world. The brand’s latest promotional video spotlights its founding team of accredited skincare researchers and beauty experts, telling an inspirational story of the brand’s determination to create a Chinese-born, world-class skincare brand in the next decade. 

Manner: Engaging a Loyal Customer Base Through Shared Values 

(Image source: social media) 

Manner initially won over customers by offering inexpensive but quality coffee to increasingly caffeine-addicted Chinese urbanites and office workers. As the first Chinese coffee brand to introduce the idea of “BYO reusable cup for a 5 RMB discount,” Manner solidified its economic and eco-conscious positioning. Through quality products and a seamless CX that includes mobile order-ahead, repurchase rates increased steadily, and a strong base of loyal customers followed.  

Manner’s additional sustainability and customer engagement efforts, such as giving away branded reusable canvas bags for its 6-year anniversary, have turned customers into eager brand advocates. Compared with other brands in the category that are still trapped in creating complicated pricing schemes to acquire new customers, Manner has moved away from reaping price advantages by connecting with consumers’ values and lifestyles, thus creating a higher and more sustainable CLV. 

Key Takeaways for Marketers in China 

With customer journeys becoming increasingly complex, non-linear and hyper-personalized, the real challenge today is not acquiring new customers, but keeping them.

To wrap up, these are our takeaways for building an evergreen Chinese brand by balancing brand and demand: 

• Think beyond short-term growth to adopt a broadened and balanced lens for execution and measurement. 
• CX is not limited to the buying journey. Carefully consider how to optimize the ownership journey as well to fully activate CLV. 
• Dynamically balance demand and brand across the entire customer decision journey while further increasing branding efforts – particularly in brand exploration and advocacy – to cultivate lasting brand love.

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Summary

In Asia, effective collaboration is paramount to unite a diverse set of countries and strive towards a common goal.  

Our latest global research report, “Catalysts: The Collaborative Advantage,” unveiled that companies in Asia value collaboration more than other regions, but lag in execution. How can the region work to close the gap? 

In this webinar replay, leaders from Prophet’s Organization and Culture practice and the APAC team share insights from our latest global study, introducing clear pathways for leaders to prioritize and accelerate the efforts to build their collaborative muscle. 

Learn how effective cross-organizational collaboration can help your business unlock transformational growth through a holistic, human-centered approach.  

Key Takeaways

• How Prophet’s Collaboration Flywheel helps deliver better, more impactful outcomes faster over time through a 3-phase approach.
• Characteristics unique to the APAC region, and why effective collaboration is paramount to unite a diverse set of countries and strive towards a common goal. 
• Actionable tactics and case studies to unlock collaboration in today’s ever-evolving organizations with remote, hybrid and face-to-face workplaces and the future opportunities for improvement.   

Download the presentation PDF.

Building brand relevance with Chinese consumers remains top of mind for emerging and legacy brands alike. Budweiser Brewing Company APAC (Budweiser APAC), part of AB InBev and a key player in both the global and China beer markets, claims some of the most storied beer brands in the world as part of its portfolio – from Budweiser, founded in 1876, to Harbin, founded in 1900. Despite their longstanding histories, these brands are constantly evolving and innovating to maintain relevance in an increasingly fragmented and competitive market.  

Tom Zhang, an associate partner at Prophet, sat down with Matt Che, CMO of Budweiser APAC, to discuss how the Budweiser APAC portfolio continues to house the top beer brands and resonate with Chinese consumers through strong purpose and values.

Matt Che 
CMO at Budweiser APAC 

Matt Che is Chief Marketing Officer at Budweiser APAC, who leads the marketing team in China, Korea, India & Southeast Asia. An over-20-year veteran of marketing and sales, Matt oversees all brand marketing activities including Budweiser, Corona, Hoegaarden, Cass, Harbin, Blue Girl and Sedrin, etc. He is also held accountable for driving marketing-led business growth. 

Regarded as a trailblazer in the industry, Matt contributes to the growth of Budweiser APAC by creating a series of aggressive campaigns and driving marketing digital transformation. 

Matt Che earned a master’s degree in arts from the University of Birmingham. He also completed various marketing courses for executives at Harvard University, Stanford University, and Kellogg School of Management. 

As a major FMCG group, how does Budweiser APAC maintain a pulse on Chinese consumers and the latest trends? 

We must remain curious and constantly consider how the relationship between our brands and consumers is evolving. My thoughts are three-fold.  

First, there is a shift away from educating the consumers. Brands need to think about how to communicate product benefits and brand values in a way that is “effortless” and most resonant to consumers, allowing them to take in the information willingly and easily. Rather than standing on moral high ground and preaching to consumers, brands should view consumers as their equals and strive to grow together. To be a relevant brand means being humble. Champion the consumer. Recognize, appreciate and celebrate them. 

The next trend I see is a shift in focus from brand building to full-funnel marketing throughout the consumer decision journey. With the maturation of digital, social and new retail, there are more ways to not only build brand awareness but also close the gap between awareness and purchase. However, the marketing mix from awareness to consideration to purchase is varied, and we need to consider different content assets at each stage of the funnel to deliver the right message at the right time. As marketers, we must hold ourselves accountable for the full customer lifecycle.  

Lastly, the innovation cycle of FMCG products is changing. Previously, innovation was centered on a few big bets that would generate significant commercial impact. Now, innovation is also a way to drive brand equity. For instance, we launched the Budweiser Brewmaster Reserve in China, an ultra-premium product made with the highest-quality ingredients. Rather than measuring its success with immediate sales KPIs, we are looking at whether it contributes to brand equity. Marketers should approach innovation more strategically to shape the today, tomorrow and future of the brand. 

With Budweiser APAC’s extensive portfolio, how will you drive innovation of products and experiences to meet increasingly diverse consumer needs?  

The traditional notion of brand loyalty no longer exists in this age of fragmented markets. Instead, each brand should strive to build occasion-based loyalty. Consumers might go out to KTV with friends and choose Budweiser, then grab some late-night street food with Harbin. On the weekend they might have a picnic and bring some Hoegaarden, and then order a Corona at the beach while on vacation.  

Rather than spending our marketing budget attempting to make one brand the beer of choice for every drinking occasion, we take a very nuanced approach in segmenting consumer drinking need states and occasions to a high degree of specificity. In each of these need states and occasions, what are the consumer’s functional and emotional needs? Once we understand those, can beer as a category deliver on them? If so, then we can consider which of our brands has the story, value proposition, and DNA to own an iconic demand state and occasion.  

Of course, we will still source sales volume from adjacent drinking occasions, but the center of gravity and the “hook” we communicate to consumers must be clear and distinctive. Once we have this, we must then be disciplined about focusing brand-building efforts on channels and occasions that are core to the brand, allowing each one to own distinctive space in the portfolio. 

Many Budweiser APAC brands go beyond the product to communicate a higher purpose to consumers. Why is this important? 

A strong purpose is what makes a brand stand the test of time. Consumers might select you once or twice based on eye-catching packaging or a unique product, but purpose is how brands can earn an unwavering position in their customers’ hearts and minds. The way purpose manifests will change over time, but the purpose itself should be timeless.  

For instance, Budweiser has always championed authenticity – being true to yourself and living on your own terms. For the Qixi Festival (Chinese Valentine’s Day), Budweiser launched the “All Love Is Love” campaign. We released limited edition bottles that featured illustrations of people of all genders, and the bottles can be paired together in different combinations to feature two figures kissing.

The message is clear – regardless of how you define love, we respect, celebrate and champion it. We’re communicating with our customers as equals, meeting them where they are to convey the brand’s higher purpose.  

Purpose must be built over time. Rather than inundating consumers with a once-a-year massive campaign, we should reinforce the messaging consistently to build a purpose that is lasting and authentic. This is an example of “effortless marketing” in action.  

This reminds us of Corona. Corona is a strong example of how brands commit to ESG initiatives. Why is this important to Budweiser APAC and consumers? 

ESG is among the top priorities for AB InBev globally, and it’s deeply rooted in what we do. As the largest beer company in the Asia Pacific, Budweiser APAC is committed to achieving a future that’s sustainable and inclusive.  

Although there have already been many exciting results, I don’t think we as marketers should overly commercialize ESG. While its successful integration into company strategy, operations, and culture can potentially drive customer love and as a result sales volume, this cannot be the starting point.  

For instance, Corona’s brand essence is about a slice of lime, the sunset, and the ocean. It’s clear and simple. As a result, the brand is genuinely concerned about ocean conservation and marine protection. Corona partnered with Blue Ribbon, the biggest ocean conservation organization in China, and launched limited edition bottles on World Oceans Day, encouraging consumers to use less plastic.  

This March, Corona also initiated the “Ocean Restoration” program for the second year, partnering with fishermen across Fujian and Hainan provinces to recycle plastics from the ocean. Through our continued efforts, Corona is now the first beverage brand in the world to achieve a net-zero plastic footprint, meaning it recycles more plastic than it produces.  

However, the goal of Corona’s ESG efforts is not to convince consumers to drink more Corona but to convey the importance of protecting our planet for future generations. If these initiatives draw consumers to the brand, then that is a positive externality of our ESG efforts, but it cannot be the intention behind them. 

Nowadays, many marketers experience tension between longer-term brand marketing and shorter-term demand generation. How do you resolve the tension to balance “fast and slow”? 

As I mentioned before, marketers have the challenging task of building today, tomorrow and the future. It’s a difficult balance to achieve, especially as marketing has traditionally been less focused on immediate commercial growth in favor of long-term brand building. But our remit is expanding, and we must not only identify consumer needs but also the commercial potential of these consumer needs.  

In my role, I’m working more closely with our commercial leaders to ensure alignment from the get-go and help balance the tradeoff between “fast and slow.” It’s important to align across marketing and sales teams on what long-term success looks like as well as what challenges might arise in the short term. Collaborating with sales allows us to better identify commercial realities such as pricing, competition, and potential cannibalization within our portfolio. 

In April, AB InBev appointed our first global chief growth officer, a newly created position that aligns sales and marketing under the same umbrella. This indicates a clear mindset change.  

Budweiser and Harbin are the official beer sponsors for the 2022 World Cup. How will Budweiser APAC use the event to engage fans and create a memorable brand experience?  

With the resurgence of COVID-19 in some areas of China, consumers are once again dealing with certain levels of anxiety, uncertainty and stress. Thus, we are adjusting our messaging.  

We want to keep things simple and help consumers unleash the fun – not only the fun of the World Cup but the fun that comes with being with family and friends and forgetting about your worries for just a moment. We want consumers to be able to just enjoy the game and enjoy a beer. 

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In Prophet’s seventh Brand Relevance Index^®, we once again explored the powerful way that brand relevance drives impactful, profitable growth. As the world continues to shift and settle into the “new normal,” brands are breaking through to connect with us on a more human level. This year, our analysis found that successful brands are evolving, building relevance with consumers by appealing to the head and the heart.

As we revealed the top 50 most relevant brands in the U.S., we asked our colleagues in Shanghai to share their perspectives on what some of China’s most relevant brands are. Here are their thoughts on which brands stand out.

HEAD: Redefining the Everyday

Manner Coffee

“Manner Coffee truly democratizes coffee for the average Chinese consumer in a way that no other brand has. Manner connects to the head through ruthless pragmatism and pervasive innovation. Its price point of 15 RMB for a hot latte is less than half of one at Starbucks, yet it maintains high standards for the quality of its beans and its baristas. Its menu is constantly updating with seasonal drinks and limited-edition collaborations. Manner also holds a unique perspective on what a coffee shop should look like. Beyond office buildings and subway entrances, Manner is also integrated into the fabric of the city, with locations in theaters and fresh markets alike, turning it into a simple yet classic component of life.”

Tom Zhang, Associate Partner

Wuling Hongguang Mini EV

“Wuling Hongguang Mini EV is a micro-sized, four-seater electric car that debuted in 2020 and has since become the best-selling electric vehicle in China. The EV offers a convenient yet affordable option for daily transportation in China’s dense urban areas. Its advantageous size makes it easy to navigate, park and charge – perfect for dropping kids off at school, stopping by the grocery store and commuting to work. Also, Wuling continues to launch new models such as a convertible version and customizable options. The competition from traditional players is fierce though, and Wuling must go beyond being solely a pragmatic choice and define what it stands for as a brand in order to achieve relentless relevance with consumers.”

Charlotte Zhang, Marketing Manager, Asia

HEAD: Reinforcing Promises with Performance

Bananain

“The innerwear category has exploded in China in the past few years, with several new players taking on traditional industry leaders, and Bananain is at the forefront. Bananain leaps ahead by positioning itself as a technology company built on patented somatosensory technology (e.g., Tagless, Zerotouch, Airwarm) rather than simply an innerwear brand. This technology-led approach is deeply integrated into their growth strategy and design process, allowing their products to deliver on the functional benefits they promise. With the belief that people should ‘focus on the inside,’ Bananain exists to ‘raise the baseline’ and elevate the standards for self-care.”

Baron Zhang, Senior Associate

HEART: Creating Magical Escapes

VETRESKA

“With hundreds of new, local brands entering the pet industry, VETRESKA has identified a unique formula for success: Viewing pets as their owners do, as family members. This strategy worked especially well with the rapidly growing segment of young, female pet owners who have rising disposable incomes and a discerning eye for quality and design. With backgrounds in fashion, VETRESKA’s cofounders have gone beyond typical pet products to create a shared fantasyland for pets and humans alike. As a mom of two cats myself, VETRESKA allows me to provide the best for my pets and brings us closer together.”

Flora Wang, Engagement Manager

Songtsam

“With borders closed and international travel restricted during the pandemic area, Chinese travelers are rediscovering domestic destinations and seeking out best-in-class experiences. Songtsam is a boutique luxury hotel group in the remote Yunnan and Tibetan areas of China, providing access to what were once hard to get to destinations. Songtsam connects intimately with the hearts of the guests who stay there. The brand offers  a both undeniably indulgent and deeply reflective experience inspired by nature and the local culture, with a staff that is over 90% Tibetan.”

Tracy Xu, Senior Associate

næra Hotel

“næra Hotel is similarly creating an immersive and escapist experience, located closer to Shanghai. The hotel integrates local Jiangnan cultural elements in its design but also combines modern aspects, exhibiting the artwork of 35 local and foreign artists. In addition, næra’s experience is anchored in its nearby 3,000-acre organic farm, which supplies produce for its restaurants and allows interested guests to pick their own vegetables. Songtsam and næra represent a new breed of boutique hotels in China that are elevating the standards for domestic travel.”

Will Chiang, Associate

HEART: Enabling Shareable Experiences

Holiland

“Holiland, a traditional Chinese bakery chain, turns 30 this year. It recognized the need to keep up with new market trends in order to surprise and delight customers and stay relevant. It aimed to be seen as not only reliable but distinctive as well. To do so, Holiland collaborated with many in- and out-of-category brands – including Toblerone, Diantaixiang Hot Pot and UCCA Center for Contemporary Art in Beijing, to launch new and unexpected products. The brand also refreshed its visual identity and retail concepts, creating sleek, futuristic retail concepts that invite young consumers to come together to socialize and snap photos with friends.”

Yang Yu, Associate

MOBI GARDEN

“MOBI GARDEN is at the forefront of the new camping craze that has swept China. Originating as an OEM for foreign high-end brands, MOBI GARDEN combined its deep industry expertise and production capabilities with a unique understanding of the domestic market. This insight was key in their offerings of high-performance, cost-effective products that deliver safety and comfort as well as a premium “glamping” experience. The brand also recognized the need to position “glamping” as a lifestyle, creating shareable content while engaging with consumers through social media channels such as Douyin (TikTok) and RED. By making the outdoors more accessible and shareable, MOBI GARDEN offers a new form of social currency for China’s rising middle class.”

Shirley Liu, Finance Lead; Lily Xu, Talent Lead; Wynee Zhang, Executive Assistant

RELENTLESSLY RELEVANT: Elevating Modern Living

Swire Properties (Taikoo)

“Swire Properties, under the Taikoo brand in China, is redefining what urban life in China looks like. In an industry that is known to be stale, Swire creatively transforms urban space, community and culture through adaptive reuse, innovative retail concepts, and hyper-localized experiences. Its newest project in Shanghai, Taikoo Li Qiantan, features an open-plan and lane-driven architectural design that appeals to the head and unique experiences centered on wellness that appeal to the heart. The stores featured are a mix of well-known brands, rotating pop-ups and pioneering concepts such as Starbuck’s first Greener Store Lab in Asia. As a native Shanghainese, I can see this project putting the new Qiantan area on the map in a way that few other developers could.”

Joey Zhang, Associate

RELENTLESSLY RELEVANT: Inspiring Through Technology

Tesla

“Chinese consumers, once known for flaunting brand names and logos, are increasingly choosing brands that reflect their own perspectives and values, and Tesla embodies just this spirit. Tesla’s industry-leading technology fuels a mission that goes beyond itself or even cars in general – ‘to accelerate the world’s transition to sustainable energy.’ Elon Musk himself is a big part of the brand as well, speaking his mind and sometimes taking a stance that is at odds with other western brands and media. This characteristic appeals to Chinese consumers greatly. When he tweeted a cryptic, ancient Chinese poem in November 2021, the topic went viral on Chinese social media platforms as netizens praised his cultural knowledge and raced to decipher its meaning.”

Sean Hong, Senior Associate

RED

“When I think about brands I cannot live without, RED is at the top of the list. The social media platform allows me to experience life from new perspectives, places, interests and people, whether I’m on the go or in my daily living. On RED, I’m constantly inspired by users around me. It is not just following the latest trends, it is where trends are created. When I want to know something, I no longer use Baidu or Google. Rather, I turn to RED to get a more personal, unique perspective from influencers I trust. RED is also keeping up with the latest in tech innovation, launching its own NFT platform, R-SPACE, late last year where users can directly purchase NFTs within the app.”

Chuck Deng, Senior Associate

“Successful brands are evolving, building relevance with consumers by appealing to the head and the heart.”

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E-commerce continues to surge globally, in part accelerated by the COVID-19 pandemic, and in many ways, China leads the charge. While some Chinese companies, such as Alibaba and Meituan, have focused on building ecosystems and “super apps,” Pinduoduo’s approach differs. With origins in agriculture and social commerce, Pinduoduo has risen to the top through an innovative business model that is set on creating value for both the merchant and the consumer. In 2020, Pinduoduo was ranked third by GMV of China’s e-commerce platforms, with a total GMV of $242 billion USD.

Prophet’s Tom Zhang, a senior engagement manager, had the chance to sit down with Xin Yi Lim, Pinduoduo’s executive director of sustainability and agricultural impact, to discuss Pinduoduo’s investment in agri-tech, its view on the consumer-to-manufacturer (C2M) model and the company’s ongoing purpose-led innovation initiatives.

Xin Yi Lim

Pinduoduo

Executive Director of Sustainability and Agricultural Impact

As Pinduoduo’s executive director of sustainability and agricultural impact, Xin Yi Lim is responsible for Pinduoduo’s international corporate strategy efforts and innovation in sustainability and agri-tech. Before joining Pinduoduo in late 2018, she worked for Singapore’s sovereign wealth fund, GIC, in both its Singapore and New York offices as a technology and media analyst in the Public Equities division. Xin Yi holds a bachelor’s degree from the University of Oxford and a master’s degree from Harvard University.

Can you tell us a bit more about your background? What brought you to Pinduoduo, and what is your current role there?

I’ve spent most of my working life in investment, covering technology, the internet and media. As a financial analyst and an outsider, I was familiar with Chinese e-commerce but very much interested in learning more.

I joined Pinduoduo in late 2018. I’m part of the broader strategy and investment team, but my title is quite unusual – executive director of sustainability and agricultural impact. It’s very hard to find anybody else who has those two things in one title, which speaks to how Pinduoduo sees agriculture. For us, it’s where we can have a huge impact in the social sphere, via poverty alleviation and job creation, and in the environmental sphere as well.

What is Pinduoduo’s ambition behind its continued focus on agriculture, even as the company has expanded into numerous other categories?

In the beginning, there was Pinduoduo and there was also Pinhaohuo (拼好货), which was focused solely on agricultural goods. We merged the two in 2016, and as a result, agriculture remained deeply rooted in our DNA. Even as we grew into selling other categories of goods, agriculture stayed at the forefront as a sector where we could have a large-scale impact and accelerate change.

As a technology company, we’re constantly thinking about how we can disseminate agricultural technologies to improve farmer productivity while reducing the environmental footprint of farming. By leveraging these technologies, customers can get the same product, or perhaps even one that is more nutritious, while reducing the environmental impact. Broadly, that’s how Pinduoduo thinks about agriculture, technology and sustainability.

As a platform, where can Pinduoduo have the biggest impact in the agricultural value chain?

The way agricultural products make their way to market – the distribution channel – has not yet been transformed as it has for other categories. We estimate only about 7% to 8% of the total dollar value of agricultural products transacted in a year is happening online.

That caught our attention because we know shifting online can unlock a lot of efficiencies in the supply chain. Through the Pinduoduo model, we are able to bring the produce directly from farmers to customers, cutting down on any unnecessary intermediaries in between. And by doing this, the farmer can earn more while the consumer can save more. It becomes a win-win for the producers and the consumers.

“As a technology company, we’re constantly thinking about how we can disseminate agricultural technologies to improve farmer productivity while reducing the environmental footprint of farming.”

The knock-on effect is also more prevalent now that the farmers are more plugged into the economy. This is because they have a direct sense of what their target consumers like. They can understand how consumers respond to certain pricing or packaging if there is stronger demand for large oranges versus small oranges or how demand changes throughout the year. We want to empower farmers so that they’re not just price-takers in the traditional distribution model, but instead, can be more actively involved in producing what consumers actually want. This is where we can add value and how we bring the C2M model to life.

Can you elaborate on how Pinduoduo incorporates the C2M model in its overall strategy?

In China, there is a very strong manufacturing base on the supply side. However, the Original Equipment Manufacturers (OEMs) often lack the expertise and insights to create distinctive brand identities and value propositions that connect with their consumers. Thus, we are coming up with new ways to enable domestic producers to leverage their own IP, understand consumer needs and create products and brands that resonate with the market.

Our New Brands Initiative, launched in late 2018, is one way we are bringing this to life. We have dedicated vertical specialists who work with manufacturers from each category, sharing emerging market and consumer trends with the goal of turning manufacturers from OEMs to Original Brand Manufacturers (OBMs). Based on these category trends as well as their own merchant data we provide via the platform, merchants are able to adjust their offerings accordingly and consider how to upgrade their marketing. That’s also where brand building begins. Brands can’t be everything to everyone, so by providing insights and narrowing the focus, C2M can help manufacturers develop their own value propositions and their own brands.

China has the benefit of having one of the highest levels of penetration of e-commerce. This speeds everything up, from product development to pricing to SKU assortment, by allowing manufacturers to get feedback in real-time.

Can you give a few examples of some of the initiatives Pinduoduo is undertaking in terms of innovation?

Pinduoduo is training a new generation of agri-entrepreneurs. In the past five years, we’ve trained one hundred thousand “new farmers,” a younger, more educated generation that is migrating back to their hometowns, and we’re committed to training one hundred thousand more. These are the ones who are managing the storefront, packaging, customer service and distribution and at the same time, they are also mobilizing the rest of their rural communities to join them in the digital economy. We bring business expertise via online and offline classes and then partner with institutions such as China Agricultural University to teach agricultural knowledge. Through these agri-entrepreneurs, we’re hoping to start improving the branding of agricultural goods in China, which is very undeveloped.

Our long-term goal is to bring in more upstream, purpose-led innovation. We’re in year two of hosting the Smart Agriculture Competition. We bring together global technology teams with backgrounds in AI, machine learning and plant science to compete against traditional, premium horticulture teams. We then put these teams in a smart greenhouse that they control remotely using IoT, monitoring the plants and making precise adjustments whenever needed. In last year’s competition, the AI teams produced three times as many strawberries and generated 76% higher ROI compared to the traditional teams. Not only was it very impressive to the farmers, but some of the technology experts also went on to work with the farmers after the competition. The Smart Agriculture Competition creates an opportunity to test the teams’ technologies on a bigger scale. At the same time, the farmers benefit from the efficiencies and see the real-world impact.

Pinduoduo has referred to itself as a “Costco+Disney” concept. Can you elaborate on what this means and how it guides Pinduoduo’s innovation and strategy?

The Costco+Disney concept ties in with Pinduoduo’s slogan: More Savings, More Fun (多实惠，多乐趣). The Costco part, “more savings,” comes from our early insight that we could get more value for money by aggregating demand. The Disney part, “more fun,” speaks to people’s desire for a social shopping experience.

We designed Pinduoduo to be very interactive. The app offers a social connection that helps users discover things more easily compared to the traditional e-commerce model, which is very individualistic. The “team purchase” model is a big part of the social element. Livestreaming serves as another interactive element, which helps build trust between consumers and merchants. It allows them to see how things are made, how it looks, which helps consumers feel closer to the producers, creating trust.

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In the past five years, a new generation of direct-to-consumer local disruptors has been booming in the consumer sector in China. These brands are growing at an unprecedented rate, and many have reached growth rates that are tens or even hundreds of times the industry average. They adapt and react fast to consumer trends, they’re more resourceful in leveraging platforms to explore new initiatives, and their increasing influence and marketing power are giving large international players a run for their money in the ever-fierce competition for the Chinese beauty consumers.

In the first half of 2021, Shiseido China achieved a remarkable 44% revenue growth. Shiseido’s online and offline sales both increased, in part, due to the brand’s ongoing efforts in capturing consumer trends and continued focus on brand value. Viewing China as an important source of innovation, Shiseido announced a special investment fund in August, Shiseido Beauty Innovations Fund, partnering with Boyu Capital. The investment will focus on emerging beauty and wellness brands, as well as investment opportunities in related upstream and downstream technology companies.

Recently, Tom Zhang, senior engagement manager at Prophet, and Carol Zhou, Shiseido’s senior vice president of China Business Innovation & Investment, discussed the brand’s innovation journey in the China market, insights on the domestic beauty industry and her predictions for the Chinese beauty market.

Carol Zhou

Shiseido

Senior Vice President, China Business Innovation & Investment

Carol has served as head of Shiseido’s China Business Innovation & Investment since early 2019. With China’s diversified business ecosystem as a backdrop, Carol is committed to accelerating innovation and uncovering new business models to drive growth for Shiseido on a global scale, positioning the brand as a global leader in beauty innovation.

Before Shiseido, Carol has held numerous senior management positions in multinational companies including Unilever, L’Oreal, Amway, Burberry and Marriott International, where she has built brands across regions and business domains. Carol attended New York University’s Stern School of Business and holds an MBA degree from Hong Kong University of Science and Technology.

From your perspective, what are the key trends in China’s beauty industry in the next two to three years?

Currently, China’s beauty consumers are in a phase of exploration. As consumers become more sophisticated, they will be more knowledgeable in terms of ingredients and the science behind the brands. Increasingly, customers will no longer blindly believe in marketing stories but do their own research and look toward experts with real data. We will see more brands working with medical authorities, such as research institutions, doctors and scientists to lead the development of the industry and consumers from the perspective of scientific ingredients and formulas. I see a movement toward dermatologist brands and products/services.

Next, the trend of personalization will continue to develop. Although technology and regulations are temporarily limiting, and the product experience and user journey are not yet perfected, I believe that personalization is the future direction of skincare. Everyone is unique and our skincare should be too. Many brands are already customizing their products and services with this in mind, and I see tremendous development in the future. With advancements in digital and gene tech, the future for a personalized experience and product design is limitless.

Health and wellness, propelled by COVID-19, is becoming top of mind for consumers around the world. There will be further integration of topical skincare with the ingestible to provide a holistic beauty approach for consumers.

In the face of these opportunities, how can Shiseido lead innovation?

In the two and a half years since I joined Shiseido, the strategy has evolved. In the beginning, we aimed to broadly explore new trends and opportunity areas. Now, we are doing a detailed audit of Shiseido’s strengths, and identifying the intersection of market white spaces and organizational capabilities to better seize these opportunities.

Take the aesthetic medicine category as an example. Shiseido, as an industry leader, can play an important role in the development of this field. However, we will not focus on businesses that are clearly beyond our organizational core capabilities, such as injection-based medical devices. But we can explore how to integrate Shiseido into the overall aesthetic medicine ecosystem by innovating around the subcategory of postoperative recovery with products and/or services.

“Influential innovations come from improving upon existing consumer values, leading to improved experiences and ideas.”

Speaking of personalization, it is actually deeply rooted in Shiseido’s innovative DNA. More than 100 years ago in 1917, Shiseido launched the 7 Colors Powder, a face powder product that consumers could mix and match to achieve a refined look based on their unique complexions. We are also actively exploring personalized beauty devices and services. With the ongoing advancement of technology, we will continue to optimize the experience, providing specialized and convenient smart devices and genetic-level skin diagnoses in the future.

Nutricosmetics (beauty foods) is another area that we are focused on. Japan’s healthy lifestyle and a balanced diet are highly renowned around the world. Shiseido can dial up this advantage and share with Chinese consumers our innovation based on superfoods and functional ingredients.

The evolution of China’s digital ecosystem can be described as boundless. How do you view the opportunities and challenges faced by brands?

The digital ecosystem undoubtedly provides fuel for brand incubation and innovation, but it also brings about a crisis of “involution.” Many brands have a “cash-burning” marketing strategy, hiring influencers to promote the brand, giving away massive discounts. The focus is purely on marketing, while the product quality and true consumer value are secondary. The result is a bunch of products with similar benefits and features, almost the same ingredients and me-too packaging. The growth is often purely driven by new customer acquisition, and when the cash runs out, the consumers will not return either. This vicious cycle makes it more difficult for the brands to reach profitability and create any long-lasting value.

To truly gain a foothold in the market, brands must clearly define their unique value propositions – what is the “WHY.” This is the problem that many emerging brands face today.

What advice do you have for these brands?

I believe we need to return to the fundamentals and think about what is truly unique about the brand. Why do they exist? The value of a brand must go beyond purely marketing tactics.

Shiseido’s ability to have lasting success is in large part due to our dedication to creating the best quality products to meet consumer needs. This dedication to “craftsmanship” is why we don’t blindly follow market trends, but rather think critically about how we can further refine our products. Although we may not always be at the forefront of trends, we have found the right pace to create a timeless brand.

In leading international beauty giants to drive innovation in China, how do you balance “China speed” with global collaboration?

Based on my own experience in the global headquarters, regional headquarters and China business units of various brands, the tension between them is inevitable. An international brand must have consistency and a global strategy. Then the regions (China) will execute this global vision with local adaptation and interpretation that suit the local appeal. Oftentimes, local regions will complain that they need more local decision-making autonomy, while global headquarters want to maintain more control. The conflict, if managed well, can be healthy. Clear and constant communication allows local teams to coordinate with headquarters in a more streamlined manner while educating headquarters on local market situations. It also allows the teams to improve their critical thinking and decision-making abilities.

How do you promote a culture of innovation within Shiseido?

First, I need to start with my own team. I believe it is very important to create a more inclusive, open and flexible working environment and experience. In addition to more flexible working hours and locations, I strongly encourage the team to learn from outside their fields, to learn more about the world outside of their areas of expertise. Sometimes, finding a team is like finding a romantic partner – you need to seek mutual understanding and complementary attributes.

To me, innovation or any critical agenda needs to start at the top. Therefore, I need to make sure my management team understands and believes in the local innovation culture and mechanism as much as possible, in order to have a greater impact and more effectively promote innovation internally.

Lastly, based on your experience, what do you think are the most common “innovation pitfalls” that brands should avoid?

A common misunderstanding is that true innovation is always something breakthrough, from 0 to 1. But in fact, more influential innovations come from improving upon existing consumer values, leading to improved experiences and ideas. Always remind yourself what is the true consumer value and the “WHY” behind it.

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