One in 100 new products 'make it' in Southeast Asia: Nielsen

Nielsen's Breakthrough Innovation Report: Southeast Asia analysed 2,500 consumer product launches in the top 20 FMCG categories in Malaysia, Indonesia, Philippines and Thailand. Less than 2 per cent of the 2,500 product launches analysed met the fundamental criteria for a successful product launch.

Nielsen assessed products on the degree to which they deliver a new value proposition to the market (distinctiveness), their ability to generate significant year-one sales (relevance), and their ability to achieve at least 90 per cent of year-one sales in year two (endurance).

Nielsen identified the outlier brands that were ahead of the pack, which included Japanese skincare line Hada Labo in Thailand, brandy manufacturer Emperador Light in the Philippines and Nestlé’s Lactogen 4 in Malaysia.

Hada Labo, Thailand

Hada Labo entered the highly competitive skincare category in Thailand with a clear mindset: remain flexible enough to address local consumer needs, focus on creating a new niche for its products, and deliver on its commitment of superior quality.

The brand also gained insight into local consumer dynamics, enabling it to successfully leverage online channels to generate significant online buzz around its products and drive consumer recommendation—a powerful endorsement in Thailand.

Hada Labo is now ranked among the top 10 facial skincare products for women in Thailand, and achieved 6 per cent growth in its second year, off the back of a strong first year.

Emperador Light, Philippines

Emperador Light was the first spirits manufacturer to enter the Philippines in the late 1980s. Its Light product offering is an evolution on its original range, which has been developed to appeal to a younger generation and to take into account local market characteristics and priorities such as taste preferences and affordability.

The success of the brand has inspired several copycats in the market, who try to emulate the top selling brand. Emperador Light achieved an astounding 600 percent growth in its second year, following a successful first year.

Nestlé Lactogen 4, Malaysia

The launch of Nestlé’s Lactogen 4 offering in Malaysia was driven by a simple, universal fact: mothers want their children to grow happily and healthily.

From here the Nestlé team identified a need to extend its existing Lactogen range to cater to children beyond three years of age. Nestlé’s target market, the Malay community, largely resides in rural Malaysia and lacks knowledge about food nutrition.

Nestlé bridged this gap through healthcare professionals and government clinic nurses. The Nestlé team also went to great length to adapt its range for local cultural and religious needs, as well as simplifying the scientific messaging on its packaging.

The launch of Lactogen 4 in Malaysia was a resounding success, and in its second year the product achieved 74 per cent growth over year one sales.

Common themes in breakthrough product marketing from the Nielsen report:

• Consumer’s needs are central to the investment in innovation
• Understanding the consumer and competitive landscape is a continuous priority
• Focus on innovating for local market needs rather than a globally-scaled approach and driving production.

“Thousands of new product launches fail in their first year,” said Tobias Puehse, Nielsen’s head of innovation analytics in Southeast Asia, North Asia and Pacific, in a press release. “This costs businesses millions of dollars, yet manufacturers can reverse these outcomes by changing their perspective on what drives innovation success.”

He added, "Successful innovation is about deliberate attempts to touch all aspects of the innovation process and challenge everyday norms, such as consumer attitudes, long-standing beliefs, launch mechanics, organisational behaviour and disciplines.”

See also: New product launches are also challenging in China