Established brands in APAC remain resilient amidst emerging competition: report

Incumbent brands remained steady at 28% and won in 27% of the categories against insurgent brands.

Established brands in Asia are demonstrating resilience despite the rise of emerging competitors, with markets such as Malaysia, the Philippines, and India emerging as favourable environments for established brands, according to a recent analysis by Bain & Company.

The report revealed that in the 253 categories and market combinations studied based on 11 Asia Pacific countries and 23 categories from 2018 to 2022, large incumbent brands lost market share in 44% of cases against emerging competitors.

On the other hand, they also held steady in 28% and gained ground in 27% of cases. 

No single category across the Asia Pacific region witnessed a complete loss of market share for incumbents.

Meanwhile, South Korea, Singapore, and China prove more conducive to the growth of insurgent brands. In South Korea, for example, incumbent brands failed to maintain a foothold in 70% of the categories.

“The trend could be linked to the channel dynamics across markets. For example, the thriving e-commerce sector and well-established networks of third-party suppliers are making countries like South Korea particularly conducive for emerging consumer brands’ growth," said Jichul Kang, head of Bain’s consumer products practice in South Korea.

"On the other hand, the dominance of traditional trade and relatively low penetration of e-commerce make countries like the Philippines more favourable markets for established brands,”  Kang added.

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In terms of categories, the beauty and personal care sector emerged as receptive to insurgent brands.

David Zehner, head of Bain’s Asia Pacific consumer products practice, said that the study refutes the notion that insurgent brands universally disrupt incumbents. 

“The successful incumbents thrived by blending their incumbent strengths and insurgent tactics, allowing them to counter threats and strengthen their market position effectively,” he pointed out.