Transcript: East Asia Market Realities Thailand

Jane Tantakhom, NZTE Business Development Manager, Thailand: So in this presentation I will present to you who are the Generation Y and why are they important to Thai economy. And secondly, how are they like? What are their key characteristics and how they might be different to the Generation Y in the Western world, and what are the challenges and opportunities that present to the New Zealand food company if you want to sell to this generation? And lastly I will go back to the New Zealand avocado story and their success in Thai market.

So let’s start with what are Generation Y? Generation Y are some people would call it Millennia. Generation Y are those who were born between 1980-2000. They account to around 34 percent of Thai population which is around 23 million people. Why are they important? First, they are the first, they are the largest consumer group of Thai consumer. This is because of the very low birth-rate growth of the Generation Z so this is unlikely that Generation Z will surpass this generation, and secondly, they are the biggest spend to the Thai economy. 

Generation Y are the children of the affluent baby boomer parents who have raised them well and then give them better lifestyle, give them better education so these people they get better jobs, they get better paid and also they have more disposable income. And, a lot of them also live with their parents, or still gst financial support from their parents so they also have more money to spend. 

They are also at a life stage that they tend to spend more than they save, and lastly, this generation is a key influencer to other generations in the family so this generation tend to be the early adopter, so whatever they choose or they buy or they consume they will influence other people in their family to follow them. 
So how are they like? [Kantar Millward Brown] a research agency has identified five key characteristics of this Generation Y. The first characteristic is individualistic, so this generation they believe that there are many fish out there in the sea but they want to be a mermaid so the product that they choose or they consume or they use they tend to select a product that kind of reflect themselves and say something about themselves. Many times they would go for a niche brand that may not follow the mainstream fashion. 

Secondly, they are purpose-driven so this generation they believe that they can make something different to the society they live in, and they’re willing to take action. So this generation they care about how the products are being produced, how many sheep were used in these products, how many ... how are the farmers being treated, are being treated fairly? They care about these points, and they also care that their product, when it comes to the hand, it should not or it does not cost the earth.

And thirdly, they are hypo connected. This generation, they are the mobile first generation. From the moment they wake up to the moment they’re going to bed mobile phones are always with them so they like to be engaged all the time, always be updated, engaged with their friends. They like multitasking and also they like multi-screening as well.

Fourth, they like things to be immediate. On average, people watch a video clip on mobile phone that lasts around two minutes so if they have to wait for something longer than two minutes they will be really impatient for that. And lastly, this generation are concerned about health and wellness because they believe healthy is the new sexy.

So a lot of people might have a question, how the Western Generation Y might be different to the Thai Generation Y or Thai Generation Y tend to be less individualistic, and as I shared before, a lot of them still live with their parents and they are more dependent to their parents. And also, Thai Generation Y are different to their neighbourhood South East Asian Generation Y. At the age of 30 a lot of them tend not to get married yet, or even if they get married a lot of them don’t have kids yet, whereas if you see from the neighbourhood country where they have overly high birth rates, at the age of 30 they probably have two or three kids already so their lifestyle might be different, and in this presentation I will share with you the three key characteristics that  are most relevant to the Thai Generation Y and what are the challenges and opportunities that present to the New Zealand food company.

So the three key characteristics are hypo connected, immediate and health and wellness. So let’s start with the first one. On hypo connected: mobile phone has become a new eating utensil. It is very common to see, in Thailand, the Generation Y when they eat, one hand they hold food and one hand they will hold phone and probably you can also see it in other countries as well, so mobile phone is very important device. It's a device that they use to source ingredients, they use to learn a new recipe, they use to get their grocery done or get their food delivered and it’s also a device that they share the eating experience of that product.

So what does this mean to the New Zealand food companies? It means that when we think about the marketing activity or marketing strategy we have to think of how we can integrate between online and offline activities. Because, for food products offline is still important and it’s still valid that we need to have offline visibility and we also need to have sampling, because when it comes to food people want to get the real experience of how the food tastes. But in order to engage with this Generation Y we also need to think of how we’re going to engage them to create awareness in a digital world and we can use digital platform to gain awareness, to gain engagement and it’s also sometimes in some cases they can also gain loyalty as well. So it is very important for us to think through the whole consumer journey of what channel, what media assets that are exposed to the Generation Y before the purchase, during the purchase, at the point of sales, and also after the purchase. So that is hypo connected. 

Coming to the second part, the second key characteristic is being immediate. Instant noodle was very popular in Thailand for many years. However, we started to see the decline of instant noodles during the past few years and one of the reasons is that people found instant noodle is not instant enough anymore. The fact that you have to add hot water, then you have to wait 3-5 minutes to let it cook, and then you wait again to get it cooler, and then you have to sit down properly to eat it; you can’t eat on the go so this makes instant noodle become less popular choice to eat for the Generation Y. 

However, we see the increase in consumption of product like bread, cheese, sausages because these products are readily consumed and it also reflects the trending in terms of the habit, the eating habits of Thai generation that people tend to snack more and eat smaller meals. But they eat more often, and they also eat in a more casual dining setting so it’s very okay for me to have breakfast at my desk or have dinner on my sofa. That’s why I look for product that allow me to eat conveniently on this kind of dining or casual dining setting.

So what does this mean to the New Zealand food company? A lot of products from New Zealand tend to come into a bigger pack size or sometimes a normal pack size here but is still considered very big for Thai consumer, or sometimes they come to on a serving size, but for Thai people or Thai Generation Y they are willing to pay for convenience so they look for single serving packaging, they look for the smaller pack that they can eat on the go, and they also look for packaging that give them convenience and reseal packaging that they can always come back to eat, so this format of packaging really matters to this generation.

And lastly, on health and wellness, being healthy for the Western Generation Y is about being physically fit but being healthy for the Generation Y in Thailand is about having an attractive physical appearance. This is the result of social media that allow them to connect with the public role so they need to ensure that they look good in the social media. 

Unlike the previous generation that liked to go to the weight loss solution clinic or slimming solution clinic, this generation they like to go to the gym, they like to work out and they also like to eat healthy food or food that they perceive to be healthy. So we see products like chia seed, flaxseed or high protein drinks or even avocado that people believe that these are healthy foods and then it’s good for their health. 

However the challenge is that a lot of these healthy products, although they’re perceived to be healthy, are really new to Thai diet, is not in the Thai diet before, just like avocado. So it is very important for New Zealand food company if you want to sell this product to them you need to educate about the product, how to select the product, how to handle the product, how to eat the product and even give the idea of how to make a local twist with the local recipe in order to make the product become attractive to them.

That’s interesting thing to think about healthy, on health and wellness is on the marketing term ‘superfood’. A lot of company, a lot of [unintelligible] like to use the word ‘superfood’ and what does it mean, superfood? There’s no definite definition but when you label something as superfood it will be perceived as extra  nutritious, extra healthy so that’s why they can charge a premium price. For example, beetroot, if you say is a vegetable you can charge a commodity price but when you say that beetroot is superfood you can charge a very premium price so that is about healthy and wellness for Thai Generation Y. 

To give you a clearer picture, I will give you an example of how New Zealand avocado can successfully engage with Thai Generation Y and become a popular food choice for the Generation Y in Thailand. So New Zealand avocado, they work as a whole association in order to promote New Zealand avocado in Thailand. In addition to the traditional activities that they do when they launch product that they have sampling of [unintelligible] they also work actively on a digital platform and they use the digital platform as a place that they can connect and engage with the Generation Y.

Apart from the activity they have on Facebook and Instagram, they also work with a  key influencer in the digital platform like Instagram, so they use this key influencer to talk to the target audience about how to eat it, what is the benefit of avocado, how avocado going to make you look good, etc. But one of the interesting things that we can notice about the key influencer that the Generation Y like to follow is that they are not a popular big superstar. They are normal people that the Generation Y can easily relate themselves with and that’s why they tend to believe these people and what they say rather than believe the superstar saying.

Secondly, they also position themselves as a food for immediate consumption, so avocado is seen as healthy fast-food. A lot of fatty and creamy product, when people think about fatty, creamy product, they tend to be something not good for health but avocado, to a lot of Thai consumer, they think that this is something fatty and creamy that they can enjoy eating without guilt. 

And lastly on health and wellness, so avocado also position themselves as superfood, as I mentioned before, so they can charge very expensive price. In Thailand it costs around 95-105 baht per piece, which is around four to five New Zealand dollars per piece for one piece of avocado, but a lot of Generation Y are convinced in the benefit and they still buy it and some probably have it every day.

So to sum up, I believe all of you here all have good product with a good brand story. Not all is lost if you are not snack or instant food, but same principles apply if you want to target to the Generation Y.  You have to think of how you’re going to engage them in a digital platform and how you will integrate between offline/online activity. 

Secondly, you have to think of how you’re going to make your product to serve the immediate need and immediate demand, and lastly, you have to think of how you're going to find an attractive angle of your product in order to position it to be healthy or superfood. Think about this avocado. This is an ancient fruit that was grown probably 10,000 years ago? However, they can find a way to make it become popular to the generation who was born 10,000 years later.