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Marketing to Asian Millennials Why being second best may be the best long-term strategy

Asian Millennials

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Page 1: Asian Millennials

Marketing to Asian Millennials Why being second best may be the best long-term strategy

Page 2: Asian Millennials

Asian Millennials Why being second best may be the best long-term strategy

They have had enough of the pressure, the high expectations. They lost their childhoods to the incessant nagging of their parents and their teachers. They could not bear the constant comparisons with high performing classmates and super-achieving kids of their parents’ friends, proudly flaunted on social media. When they saw the sky-high remuneration packages offered to a select few of the graduating class, and matched it with against their own measly compensation package, they wondered if staying up all those late nights trying to master macroeconomic theory and data networks and protocols had really been worth it.   Asia’s millennials have it tough. But they make up 30% of the entire population of India, and 28% of China’s, and are held out as marketing’s Next Big Hope. Upbeat commentators proclaim their digital connectivity, global aspirations and desire for rich experiences as the golden lode, to be mined for the next twenty years. Brands invariably depict them as confident winners, exuding an aura of self-assurance, always getting the girl (or boy), more knowledgeable than their bosses, teachers and parents; and their parents exulting at their achievements.   So where’s the disconnect, and how can companies recognize their potential?

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For every gold medal winner, there are 10,000 who didn’t make it The competition that Asian millennials face is not only huge, it has risen exponentially over their short lifetimes.   In 1987, when one million students took Grade 12 exams, one of India’s top commerce and economics schools, Shriram College of Commerce (SRCC) in Delhi, had 800 seats. By 2011, 10.1 million students wrote Grade 12 exams, but SRCC had the same number of seats. In 2014, the number of students who scored over 90% marks in their Grade 12 exams was over 200,000, in Delhi alone – and that was just in one of the school boards.  

In China, some 9.4 million students took the dreaded university entrance exam gaokao this year. To put things in perspective, 1.66 million students took their SAT and 1.8 million sat for their ACT for US college admission last year. The success rate amongst those appearing for the gaokao has climbed from one in thirty in the late 1970s to 75% last year, the result of Chinese universities investing in building much greater capacity.   But the pressure is so great that around one million high school students gave up on taking the gaokao this year.

Some 80% of these students chose to enter the job market right away, with the rest are planning to study overseas or taking the exam next year. The travesty of it all is that today’s millennials are smarter, better connected and have so much more exposure than their parents and their teachers. But the bar has just kept rising higher.   The millennials’ response to not emerging on top of the heap is one of ‘so what?’ They are turning the ‘loser’ tag into an alternative attitude, and responding by making the best of what they have.  

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During the 2008 Olympics in Beijing, pretty much every brand – official sponsor or otherwise, egged on champions and gold medal prospects. Hurdler Liu Xiang – who disappointed, and diver Guo Jingjing, who did not, endorsed at least twenty brands between them. The local Chinese youth fashion brand Semir eschewed celebrity sportstars and the gold medal mania, choosing instead to create a series of films that showed young men and women struggling to become great athletes, and failing miserably. But they had one thing – smart colorful attire, which differentiated them from the athletes in uniform, and an attitude that said ‘so what if I’m not good at gymnastics / taekwondo, at least I look good.’ Chinese youth loved the brand. It reflected their inner feelings and deep understanding that the gold medal juggernaut was built on a system which they had no stake in. Semir’s sales shot up by 30%; inquiries for setting up new franchises went up by 60%. Today, the brand retails through 8000 stores. What happened to the official sponsor adidas? They were left with masses of unsold inventory.

  Asian millennials are a generation of realists. They are willing to accept things as they are, and it is up to brands and companies to help them feel good with whatever their situation is.

Give me the opportunity and a leg up, will you?

For all the faith and hope that their parents put in them, millennials realize that they need help – even to get halfway to their goals. Enter the enablers.   Maotanchang Middle School and its sister school, Jin'an Middle School, are cram schools that specialize in preparing students for the gaokao. Classes are so large that teachers use loudspeakers to address students and students attend lectures and practice tests every day from 6 am in the morning until 11 in the night, with only two short 30 minute meal breaks and one hour of relaxation time. The hype around the success rates has only driven enrollment to the “magic” schools, which have become the economic heart of the town.

The influx of 50,000 people every year (including 20,000 middle school students and 10,000 parents) has raised the town's fiscal revenue to nearly $2.45 million, four times the neighboring town of Dongehkou.  The same story is repeated in my hometown Varanasi in India, and other cities like Kota – where a flourishing coaching industry draws in high school students from villages and small towns. Their parents dream that their children will enter the top engineering and medical schools and spend as much as $1500 per term – way beyond their means, to equip them to take the entrance examinations. Those  who  qualify  for  the  top  schools  have  their  pictures  plastered  on  billboards  and

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Australian or a Midwest American accent. This was the opportunity that the youngsters were waiting for. Sure, they were not going to get the high starting salaries that the IIT (Indian Institute of Technology) graduates commanded, but it was enough for them to stop depending on their parents, buy the jeans, cosmetics and motorcycles they wanted, go out for movies with their friends on weekends. Today, Indian marketers have a term to describe this segment – it’s the Multiplex Crowd.   In China, over 500 million people – and a vast majority of the youth identify themselves

street kiosks around the city. The others – realizing that their parents will do all they can to realize their own dream, often convince them to pay for an education at a private university, which charge hefty fees. Companies like NIIT and Aptech in India realized that there was an opportunity to train these youngsters about two decades ago – in writing code. Their two-to-three year computer programming courses prepared masses of young people who could meet the demand of the IT companies, just as the BPO training courses taught the Indian youth how to fake an

as being diaosi, a once slightly derogatory moniker meaning loser, but one that has now been turned around as a badge of honour to mean someone who has a take-it-as-comes kind of an attitude. Many diaosi are socially inept but technologically well connected, and it is not a surprise when TV shows like The Big Bang Theory have found a huge fan base amongst the diaosi community. But now they have their own show, Diors Man, while the hugely popular film Lost in Thailand tells the story of a ‘loser’ who wins a beautiful woman’s hand.

The second-best need a healthy dose of self-respect, greater opportunity and commendation for whatever they’re able to achieve. Enable them, and you will have earned their gratitude.

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The means aren’t important, realizing the goal is

The key thing to remember is that just because they’re not at the top of the pecking order, they’re given up. It’s a far cry – what they do is that they find a new goal, and more often than not, a new path to those goals. It’s about doing a reality check about their abilities and their social resources. In India, there’s a term for this strategy – jugaad, an innovative solution or simple work-around to achieve a goal, involving the bending or challenging of rules. This is where social resources come in handy: seeking favours to get admission in a college, to land a job, to obtain a driving license, or to just move things faster through the bureaucracy. It is no different in China, where

guanxi, or social capital, is the currency that can make things happen. It is that singular strategy that many young people often have to gain an advantage over the better (academically) qualified; and as the Global Monitor data shows, to Asian millennials, having a large network of friends is a sign of success.

Take the recent Bollywood film Humpty Sharma Ki Dulhaniya. Humpty is not good in his studies. He barely scrapes through his final examinations, but only by browbeating the examiner to give him the necessary marks. Then he falls in love with a feisty girl called Kavya – who is about to be married out to a good looking, very intelligent doctor who works in the US – the archetypal achiever who can do no wrong. The girl’s father throws Humpty a challenge – if he is able to find even one fault in the prospective groom, he can marry Kavya.

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Of course, Humpty can find nothing wrong. All his ploys, in which he supported by his father, aided by his friends, and sometimes even by Kavya, fail. Eventually, he is only able to get the girl because, he is able to prove that he truly loves her – but also by reminding the girl’s father about his own love as a young man. If there is one resource that the Asian Millennials can rely on, it is their parents’ blind trust and constant support. They’re never on their own, left to fend for themselves. It is common for many Chinese to borrow money from their parents even when they’ve been working for three or four years, often to pay for their accommodation in a new city. They don’t think of it as dependence, rather they believe it is their right.    

Some go on to abuse that blind trust. A recent TV commercial for the bottled water Kinley shows a girl away from home at night, with her friends, at a hill station near Mumbai. Drinking from a bottle, she calls her father to tell him the truth that she is not at a study sleepover. When her angry father asks her why she felt the need to call him, she says, “I couldn't sleep because I lied to you.” While the father gets all teary eyed in forgiveness, the brand’s tagline says “Every drop is true.”  

Grey characterizations are quite acceptable to millennials. They know they aren’t quite perfect, they believe that by building social capital and keeping their parents on their side, they can get ahead.

Life is unfair, but I’ll overcome whatever challenges it throws at me.

The reality of Asian millennials and their coping mechanisms are finding increasing representation in popular culture and media.   In Feng Xiaogong’s epic film Aftershock, a mother is faced with the choice of saving one of her twin children – a boy named Da and a girl named Deng, after the Tangshan earthquake. Burdened by the traditional preference for male children, she chooses the former. Deng, left behind to die, survives, but is ultimately able to overcome the lifelong trauma of knowing that her mother chose her brother's life over hers.   In the Bollywood film Queen, Rani, played by Kangana Ranaut, is shattered when her to-be bridegroom backs out of their wedding on the day before. Instead of moping, she decides to leave for Paris, and Amsterdam – where she was supposed to go for her honeymoon, on a remarkable journey of self discovery, enabled by a free-spirited single mother.

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Da Peng, the creator of Diors Man came to Beijing in search of opportunity. As it happens every once in a while, he was cheated: a fake record company promised to make him a star after he graduated from college, but they instead took all of his money and then disappeared. Though the scam was devastating at the time, he managed to pick himself up and landed a job at Sohu.com, one of China’s top online entertainment companies. When a show host called in sick one day, he quickly found himself in the spotlight. Soon, he met one of China’s comedy masters Zhao Benshan, who

If you want the involvement and commitment of millennials, challenge them. They are eager to prove that they’re no less capable than the superachievers.

took him under his wing. There was no looking back for Da Peng. Diors Man is now in its third season running. What is interesting about these real experiences and screen representations is that these are not stories of the underdog,

as the Oscar-winning Slumdog Millionnaire was. Today’s millennials do not believe that they are underdogs at all. It’s just that they are likely to face challenges in life, but they have the maturity and the gumption to deal with these challenges.

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We’re impatient. Deal with it !

Whether it’s about getting service at a restaurant, delivery from an e-commerce site, or a promotion at work, Asian millennials are just not willing to wait. As kids, for much of the middle class, they have been used to their parents satisfying their every whim – and now, as they grow older, they expect similar responsiveness from brands and employers. In China, 19% of millennials expect to be manager within two years of graduating from university. The expectation is even higher in India, with 37% hoping to be a manager within a year. Millennials are more likely to job hop. In Singapore, 79% managers found that they were unable to deal with situations when millennials decided to leave a job within two years.   While they were in school, the days and weekends of most millennials were packed with school, extra classes, music lessons, sports coaching – even as they sneaked in time for entertainment. This has resulted in an amazing ability to multitask and respond to fast change. “Someone who has worked for 30 years may settle for a role and do that

for 5 years, while the younger generation wants to do 20 things together,” says Sumit Mitra, Executive vice-president – human resources, Godrej Industries. “This generation wants to move fast. They understand that business cycles are getting shorter, and that if you don’t adapt and innovate on a continual basis, you’re pretty much old news,” adds Malcolm Frank, executive vice-president, strategy, Cognizant Technologies.   It is the impatience and ability to adapt speedily that allows the second-best to quickly take stock of their situation, the environment in which they must compete, and come up with a differentiating strategy to get ahead. For many, being street smart and acting fast is how they forge ahead of the more intellectual thinkers.

Olx.in is a very popular portal that helps Indians get rid of household goods they don’t need. The traditional way of asking your friends and family, or even thinking several times if you really need to sell are challenged by the young protagonists in its communication – who are able to sell off stuff to eager customers hoping to snag deals, by the time other family members return from work or shopping. There’s also a subtle message that resonates with the millennials: there’s no shame in buying used goods. This is a demographic that is still not very wealthy, and wants to spend smart.

Organizations need to provide small, frequent jumps to their millennial employees. For brands, you don’t have to be the best or most desirable product. You only need to be able to respond faster than they expect, to service expectations, to new trends and to their needs.

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Not as self-centred as you think

For many years, the jiulinghao – Post 90s generation in China, were accused of being lazy, self-centred, rebellious and spoilt, having grown up as single children in relatively well-off families. At the same time, they are extremely tech-savvy: social media help spread the word about new brands, corrupt officials and events with the same lightening speed, allowing them to organize quickly.   Almost inexplicably, the Sichuan earthquake of 2010 suddenly galvanized the jiulinghao. They headed out to the earthquake zone as volunteers, began raising relief funds and started putting pressure on the government and corporations alike to respond quickly. Over the last two years, many Chinese millennials have been at the forefront of environmental protests, protesting against a paraxylene plant proposed to be set up by Sinopec, the state owned enterprise and the local government in Maoming, an industrial town in Guangdong province; and in Kunming in Yunnan province.

In a remarkably similar way, the youth in India’s capital New Delhi were labeled as being too self-centred and uncaring. But when a young paramedic, returning from a movie with a male friend, was attacked, brutally raped by six men and left on the road to die, an entire generation rose up in anger and shame. The older generation – which would usually prevent young women from leaving home

in the night, could do nothing to prevent them from holding all night candle vigils in front of India’s parliament building.   Travel portal Makemytrip.com in India involved youngsters in a campaign in which they could write virtual graffiti on some of India’s top monuments like the Taj Mahal, Humayun’s Tomb and Charminar, in order to spread the message of not defacing historical monuments.  

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These social phenomena clearly suggest that many millennials – particularly those who did not achieve the high goals that were set for them by their parents, or they set themselves, are looking for a direction and a purpose, and they had found them in a cause. Many understand that society and the environment have been degraded by the earlier generations, and are continued to be, by today’s wealthy. As the Global Monitor data shows, they have a sense of responsibility as good citizens.

Employers who engage millennials in social responsibility efforts and provide opportunities to do good are likely to have greater loyalty that those who don’t. Brands that make it easy for them to engage with social causes will benefit from their endorsement.

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The new role models

Until a decade ago, the heads of corporate India as well as achievers overseas, many top bureaucrats came from the prestigious Indian Institutes of Technology, Indian Institutes of Management and elite liberal arts colleges in cities like New Delhi, Mumbai and Kolkata. That is changing fast, as graduates from the next rung of academic institutions make a mark: Satya Nadella, Microsoft’s CEO studied at the private Manipal Institute of Technology in India’s Karnataka state, while Vishal Sikka, CEO of Infosys went to MS University, Baroda before heading overseas for their higher degrees. Many of India and China’s hot entrepreneurs were educated in similar institutions. The founders of Innoz Technologies, a go-to offline search engine that counts some of India’s top telecom companies as its customers, were batchmates

at the Lal Bahadur Shastri College of Engineering in Kasargod, Kerala. Twin brothers Anant and Anuj Garg began creating websites for their school (which didn’t have one!) and their family and relatives when they were in Grade 7. They went on to study engineering from the KJ Somaiya College of Engineering and commerce at the RA Podar College of Commerce, before founding Inscripts, a software firm offering innovative products that help website owners increase site engagement with and among users. Rahul Sharma, 37, is the co-founder and CEO of Micromax, India’s largest selling mobile phone. He studied mechanical engineering in Nagpur, Maharashtra and started the company with three friends – as an IT software company.  

Realizing that one of the biggest challenges that many people, including those in rural India, faced was having access to regular power supply to charge their phones, Micromax hit upon the winning formula of a phone which needed a recharge only once a month.   China’s hottest entrepreneurs are no different. 26 year old Liao Jinhua is the CEO of Hex Airbot in Guiyang, Guizhou province. His firm designs and creates open source flying robots for education and entertainment. Chen Fangyi, 27, is the head of Xiamen Meet You Information Technology Company. As a college student, he started Fanhuan.com, a website that helps consumers save money when shopping online; and went on to create Meet You, an app to help female users manage their menstrual

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Rahul Sharma Liao Jinhua Satya Nadella

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cycles. Chai Ke, another 27 year old, created Dayima, an app that provides young women healthcare advice. So, while the high achievers still head out to investment banks, multinational companies, law firms, super-speciality hospitals and the corridors of bureaucracy, a much larger number of millennials are questioning if the eighteen hour workdays and shrinking weekends are really the best way to spend the best years of their lives. For them, the idea of independence that entrepreneurship represents is far more appealing, and the jugaad mindset means they’re quick to pounce on new opportunities.

More than authority or aspirational figures, Asian millennials trust and depend on each other. They do mostly what their friends do. ‘People-like-us’ give them a sense of comfort and confidence.

Of course, this is enabled by today’s digital environment, where the world – not your city or even country – is the market, even if they live in a small town. Many millennials in China’s fourth tier cities are becoming Taobao entrepreneurs, manufacturing, sourcing and supplying goods to customers wherever they can find them.

The Indian e-commerce platform Flipkart recently set up a mechanism that allows the silk weavers of Varanasi to sell their products directly to customers, eliminating the middleman who would skim away a huge part of their possible income.  

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The marketplace performance of brands seems to reflect the validity of the ‘second-best’ approach, in which local brands seem perfectly good choices. While Apple and Samsung may slug it out, the top selling mobile phone in India is the local brand Micromax; Xiaomi is the number one smartphone brand in China. Semir is China’s largest youth fashion brand, Thums Up - not Pepsi or Coke - is India’s largest carbonated soft drink brand. Hero is the most valuable motorcycle brand in India. Kingfisher is India’s most valuable beer brand, Tsingtao and Snow in China. The lesson for brands is quite profound.  

What the marketplace tells us

In the hugely populated Asian market, you must rethink the strategy of going after the top-end of the market. While Asian millennials do have aspirations, the answer to fulfilling them does not lie in aspirational brands. It lies in creating good, value-based options that provide them with the opportunity to thumb their noses at a society that is constantly piling on the pressure. It is about resonating with their reality of not meeting expectations and challenging them, and finding openings when there might seem none. It lies in the feeling that life teaches them more that any fancy college degree. And ultimately, it is about the ability to turn adversity into advantage.

Isn’t that a challenge that so many brands face so often in their lifetimes?

References: http://www.nielsen.com/us/en/insights/news/2014/money-matters-upscale-millennials-are-saving-for-tomorrow.html http://indianexpress.com/article/cities/delhi/class-xii-results-over-2-lakh-score-above-90-in-capital/ Ogilvy & Mather China, Effie case study, 2008 http://www.hrmasia.com/forum/organisations-struggling-to-handle-millennials/191207/

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Marketing to Asian Millennials was written by Kunal Sinha For further information, please contact: Kunal Sinha [email protected]

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