|
|
|
|
|
|
A New Niche Market: Traditional Asian Drinks
By W. Garth Thorburn II
Newsflash: Asian consumers are drinking more and different beverages to quench their thirst, according to The Asian Wall Street Journal. Not only does demand for Coca-Cola, Pepsi and other colas continue to expand, but competition among soft drink suppliers has never been more fierce. Alert beverage companies are moving in on a fast-growing market niche for traditional Asian drinks, such as winter melon tea and grass jelly drink.
Compared to colas, overall sales of traditional drinks are small. Exact sales volume is not available because no separate category exists for traditional drinks. But beverage companies know a good thing when they see it.
Convinced that consumers want healthier and more varied choices, beverage companies have increased marketing budgets in Asia. They're also targeting advertising to older customers, who might be persuaded that traditional drinks are still healthy, and younger consumers, who may be skeptical that Mom and Dad's favorite beverages can be cool.
Tradition in a Can
Beverage companies also are challenging the belief that traditional drinks cannot be sold profitably in cans. Today, freshly made traditional drinks can be bought in cans in Hong Kong and Singapore for about US$1. Some companies, including F&N Coca-Cola, invest in special bottling licenses for this niche product, hoping to hit the market hard in vending machines, convenience stores and even traditional hawker centers.
Large companies like Coca-Cola have captured additional market share in the traditional beverage market. But smaller companies are not folding; they are fighting to keep customers.
Smaller companies combat their larger competitors with advertising that highlights and reinforces brand loyalty, but they follow no single approach. Some try to convince younger consumers that traditional beverages are as hip to drink as colas while others go for marketing campaigns that describe wholesome traditional products, using the tagline "Asian Heritage."
Beverage companies also focus on less-developed markets, such as China, where young people are more open to traditional beverages.
Nouveau Niche Competition
In addition to U.S. beverage companies that compete for sales in the Asian traditional drink market, regional competitors include Hong Kong's Vitasoy International Holdings, Singapore's Yeo Hiap Send and Malaysia Dairies.
The niche market for traditional drinks has thus far not affected Coca-Cola's overall marketing and investment in Asia. In 1996, Coca-Cola had a market share of 57 percent of the carbonated soft drink market in Asia.
Prospects for all beverages look good because the average per capita consumption of soft drinks in the region is only five per year. With a population of 1.5 billion, opportunities to expand sales appear to be extraordinary.
Competitors Seek Innovative Strategies
Since Asia is a fertile breeding ground for beverage competition, companies find that they need to market their products in new ways. They must diversify product lines, increase marketing and investment budgets and seek new niches like the one for traditional drinks to survive in today's highly competitive environment.
India recently licensed Coca-Cola to spend another $740 million to expand bottling and canning capacities and boost distribution networks in India. Coca-Cola has invested $135 million in the Indian beverage market since 1993. Coca-Cola also is increasing advertising and promotional campaign budgets in Thailand.
Thorburn is deputy director of the Agricultural Trade Office at the U.S. Consulate in Hong Kong. Tel.: (011-852) 2841-2350; fax: (011-852) 2845-0943. E-mail: (106122.2744@compuserve.com).
|
|