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August 12, 2019

What CDPs Must Do in APAC -- the World’s Fastest Growing Tech Region

By Susan Raab, CDP Institute

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The Asia-Pacific region is the world’s fast-growing economy. Organizations in many areas are investing in technology and retooling in response to rapid growth in consumer digital usage. Plus, there is increased concern about data use and privacy. Customer data platforms can be the right tool at the right time in APAC, according to executives already in the market from Lexer, Meiro, Segment, Tealium, and Venntifact, but it will take a concerted effort in education, marketing and region-specific customer support to make that happen.

CDP adoption in APAC is varied and behind the U.S., the UK, and EMEA. But according to the CDP Institute’s latest Industry Update, the industry is growing faster in APAC than any other region. There’s confusion and often a lack of knowledge there about what CDPs are and how they compare with other technology, particularly DMPs. This is due in no small part to other types of technology claiming to incorporate CDP capabilities, regardless of the degree to which they can deliver on that claim. APAC is also an exceedingly complex market with different economies, business hierarchies, and capabilities spread over great distances, so staffing and servicing it takes a lot of planning and investment.

Joseph Suriya, senior director of marketing for APAC at Tealium, calls it “an incredibly diverse and non-homogeneous market with regions that have many cultural and operational differences,” so, “there is no one-size-fits-all solution.” Pavel Bulowski, co-founder of Meiro, a CDP software company based in Singapore, concurs, saying, “if a company thinks it can go into business in Asia by setting up a Singapore office to ‘conquer Asia’, they’ll find they do not have a well worked out strategy.”

However, for those who know the APAC market, or are in a position to enter and operate effectively, the potential is vast. Prakash Durgani, global head of sales engineering at Segment, says, “the digital economy in SE Asia alone will triple to $240b by 2025. India’s outlook is similar, and the combination of these suggests that overall consumer technology growth across APAC could outperform Europe both in number of end-users as well as aggregate wallet share.”

In terms of awareness of CDPs in APAC, vendors and consultants have said it has been scant, but that’s changing now as well. Damon Etherington of Venntifact, a CDP consultancy based in Sydney, says with “large marketing cloud vendors such as Salesforce and Adobe now actively promoting their CDP products for a 2020 launch, the hype and excitement is taking hold in the market. Demand from brands to understand their existing marketing technology ecosystem…and to understand the gaps and requirements for their technology stack is becoming common.” Suriya at Tealium notes that, “Asia has a tendency to be very peer driven, so if their competitors are exploring something, more often than not, this will encourage other companies to look into the same thing.”

In terms of current drivers, surveys have indicated that APAC customers are concerned about how their data is being handled, so technology leaders there view ensuring data privacy and consumer trust to be very important.

Bulowski at Meiro says, since APAC is “a tremendous growth market,” customer retention is not necessarily the main focus now, but going forward when there is “any kind of economic slowdown, there will be an increased emphasis on maximizing current customers, so those will become very important to retain as a customer base. And, this will drive further interest in CDPs.”

Dave Whittle, CEO of Lexer, a CDP with offices in New York, Los Angeles, Sydney, and Melbourne, says that the current CDP market in Australia vs the U.S. is impacted by two drivers: the smaller population (about 1/13th of the size) and the 1-2 year lag in adoption of new technologies. “That said, we are seeing innovative Australian companies recognize the opportunity to implement a CDP to provide an immediate advantage against their slower moving local competitors. Clients are beginning to reorient their systems, processes and teams away from channel centric to the customer centric approach that Lexer enables.”

While it is hard to categorize the larger APAC market, Etherington of Venntifact explains that APAC is comprised of “a number of regions varying greatly in digital maturity. Broadly speaking, Australia and Japan are relatively advanced, South East Asia is still early in its digital sophistication, Hong Kong, Singapore and South Korea have pockets of maturity, while India and China are their own class altogether - huge, complex and rapidly expanding.”

Consensus from these executives on operating in APAC is that a company should either focus on one region or set up regional offices in multiple key locations. They stress that this is a market that takes a lot of time to cultivate and gain the trust of businesses there. But there is a lot of opportunity. Etherington observes that, “Australia has only a handful of active CDP vendors educating and actively selling in region. Those tend to be the larger, pure play CDP vendors such as Tealium and Segment,” so he thinks there’s a clear opportunity in the mid market where there are no active CDP players. For servicing, he says, “specialist consultancies such as Venntifact are emerging to help brands navigate the challenges, and develop effective use case driven roadmaps for CDP adoption.”

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