Tony Cuccio dissects the emergence of the desire for Western branded products in the East, which is leading to a change in economic growth and industrialization.
Recently I’ve been traveling to the Far East looking at developing my distribution in new and emerging markets; traditionally markets that have been dominated by low cost products. I’m sure you have an image in your mind of the standard of living in the likes of Vietnam and China and a perception of some of the salons in the UK that are run on low-cost, unlabeled and non-branded products.
While there’s no doubt that a stereotype becomes a stereotype because it is something that happens so frequently, you still believe that every situation like that is the same; well I can tell you that the stereotypical salon in the Far Easy is changing.
What I’ve seen in my travels to that part of the world in the last 10 years, is that more and more people are improving their standard of living. The expectations of service and the types of products that the customers in the Far East salons use and offer are changing. While it’s true that the main form of marketing has and is focused on ‘price’, there’s no doubt that the end consumer is becoming more knowledgeable, more demanding and more selective in the product that is used.
There is, to some degree a sense of irony when I look at how the Far East’s low manufacturing costs have decimated the manufacturing in the USA and now these economies are growing and the competitive advantage they had in low cost labour is changing. The cost for labor is changing because the labor force is consuming more and more products. Plasma screen televisions, iPods and iPhones have become desirable to the very markets whose low costs have enables the manufacture of these devices. Now they want Western and European products. They aspire to the very brands that have been counterfeited, this desire to become capitalistic consumers instead of live in a communist subsistence life, is changing the cost base of labor in these countries.
Now you read in the news that manufacturers are relocating back to the US and Europe as the cost of producing in the Far East in increasing and the cost of shipping is going up every week.
Western-demand culture is being replaced by Eastern-demand culture, people are the same the world over, they want more, they want brands, they want the prestige and status that comes from paying more for a branded product. They also want the very reason the original brand product was invited. That is to guarantee its quality and for that you have to pay a price.
This movement is something I am observing from salons in the US and UK, salons that traditionally brought industrial-type products, bought in bulk low grade manicure and pedicure items so they could provide the lowest cost service and make the most money. Those salons that only market on cost are now seeking branded products. They know that their customers value the better products and will buy the better products from them. They know they need to retail to survive; and to thrive to give the next generation the money they want to buy the goods that their parents went without.
This is a major factor as to why we are constantly launching new and exciting products the like latest Cuccio Manicure and Pedicure ranges. It’s why we advertise and why we market; why we seek to create a demand.
The wheel turns full circle and the great news for everyone competing on price alone, is that you don’t have to. You can build a business, change a culture; you can influence human behavior and you can compete in the market place where you competitor only things of how to undercut you. There is room for us all to run and enjoy a healthy business turnover.