Can Asia Become the New Centre for Graphic Design? It’s Up to Us

The world came very close to its worst recession this century but thanks to largely vibrant and strong Asian economies, it narrowly averted that fate. What a change from a decade ago when the IMF had to bail out some of the Asian tigers and China and India were still emerging economies then. But unlike before, the Asian governments got their act together and moved as one responsible region. Before the ripples of crisis could reach our shores, governments from China to Singapore unleashed bold stimulus packages. The newly minted wealthy middle-class from Mumbai to Shanghai is also fueling some of the fastest growing demand for high-end luxury goods. No wonder the IMF is now being asked to recognise this reality by admitting China and India into its board. The winds of change have also hit the elite G8 club. President Hu’s sudden departure from the recent summit in Italy nearly paralyzed it. We are now finally witnessing what others have already predicted, the dawn of the Asian Century. But while economic strength or hard power has clearly shifted east, soft power which encompasses ideas, culture and design has remained firmly entrenched in the West. While it’s true that Asians are rising in wealth, they have continued to buy into Western concepts and way of living. Western brands of almost all categories except low-end or value-based continue to be preferred by Asians. And our consumers are not to be blamed because while our region has raced ahead in terms of purchasing power, our attraction power has remained untapped. Graphic design which is a strong visual representation of the presence of soft power is still very much undervalued in this part of the world. So what will it take to shift Asia from being the world’s producer to its centre of creative thinking?

For a long time, Asia’s economic rise has been largely linked to supporting the Western economic model and Western consumption. Therefore graphic design as an industry is not considered high priority in many Asian countries since many major brands still conceptualize their graphical direction in the US or Europe. With the exception of Japan, Korea and perhaps Hong Kong, graphic design is still seen as a commodity and not in terms of value-add. Because of this mindset, many designers take on non-creative work so as to put food on the table. As graphic design is virtually a low-entry barrier discipline, many designers start their own graphic design studios. But as competition increases, given the scarcity of good jobs, many designers resort to lower pricing and free-pitching. The luckier few who manage to serve those who understand the value of design are able to avoid this fate.

If this mindset persists then even if Asia were to race ahead, it will not be served by an equally creative industry that is confident enough to do the work which reflects the vibrant Asian identity. And given the fact that few clients appreciate the purpose of meaningful and good work, many design companies believe that this is almost utopian. So as an industry we are producing a generation of graphic designers who are still conditioned by Western benchmarks and constrained by resources to produce Asian-inspired work.

In another 10 to 15 years time, we will have a rich and large critical mass of affluent middle-class. The world is also increasingly looking towards Asia for ideas. The dazzling Olympic opening in Beijing last year and the fascination with Slumdog Millionaire shows there is a viable market for Asian creativity. But to fill up this vacuum, we need content, creative stars in order to influence the market and see the value of Asian graphic design.

So we need good work to show this and this is why I applaud the efforts of the team who put this book together. Many works featured within this Asia Pacific Design shows what the world can expect from a confident Asia. I am optimistic despite the challenges; pockets of designers are doing their part to inspire the world. The works featured here also show an encouraging trend that clients are beginning to embrace the notion of an Asian identity. But more can be done.

Perhaps it’s time to start a pan Asian graphic design fraternity. Currently design associations are nation-based, maybe it’s time for an Asian body to promote graphic design. Publications like Asia Pacific are extremely important because it helps us discover the richness of ideas that exist among us. If we choose to work together, much more can be achieved. Perhaps this fraternity could be a partnership between design firms and publishers. In this way we have a guaranteed channel to promote good design. We should also have a pan-Asian graphic design index to track the progress of the industry across the continent. If we want others to believe in our work then we have to start now. We need to change mindsets and help shape a more confident Asia. Because that is ultimately the mission of designers, it is a profession in which its work is able to influence societal norms. As many young designers enter the market, hopefully They will find more peers proud of their Asian heritage and 10 years from now, hopefully our vision for graphic design will match up to our economic ambitions. This is a good start and now it’s up to us to continue its inspiration.

Top Three Markets Of South East Asia

The mood seems to be quite upbeat for ASEAN capital markets and investing in South East Asian ETFs (a visible trend of the past year) will rise further in all likelihood. The region which will inhabit more than 300 million middle class families by 2015 is attracting a fair amount of foreign investments through institutionalised channels and interestingly through the broader options. Foreign Investors including Americans vested in South East Asia markets are now looking beyond exclusive Singapore ETFs and towards wide spectrum products that are centric on fast emerging markets like Indonesia, Malaysia and even frontier nations like Cambodia which has posted one of the strongest economic growth figures for 2012.

This side of Asia has remained indeed very strong even during the Global economic crisis. European distress and despair in terms of its overall economy still continues to top the news and even in the United States unemployment figures remain significantly high. China too, may remain slower for all current year’s quarters amidst weak exports and low investments in the country and a testimony to that is World Bank degrading China’s growth rate by 2 %. South East Asian economies and their consolidated returns on the other hand may outperform with higher growth rates than Brazil, China, India or even Russia in the coming fiscal year.

A cross border trading platform and aggressive M & A activity will go a long way in stirring investor’s interest. Good corporate governance ensures strong fundamentals and the players of the ASEAN community seem robust. Indonesia and Malaysia, both should very well suffice their real growth outlook of +6% for the current year. The newest country of the region, Myanmar along with Laos, Cambodia and Vietnam is poised to display highest growth rates in Asia, which will reflect profitably on their most active trading partners like Thailand, Singapore, Malaysia and Indonesia.

Business Activity of the area is well represented by a united body called ASEAN – The Association of South East Asian nations. It comprises of 10 nations namely – Indonesia, Laos, Brunei, Cambodia, Myanmar, Thailand, Vietnam, Singapore, Malaysia and Philippines and the majority of economic activity is concentrated in four of these nations – Indonesia, Malaysia, Thailand and Singapore. According to International monetary fund (IMF) the GDP growth rate for Malaysia is expected to be 4.7% for the year 2013, Indonesia is expected to grow at the rate of 6.3% in 2013 and for the same year Thailand and Singapore’s growth level is predicted to be 7.5% and 3.5%. In fact this entire region has a strong upward future GDP growth rate.

Investors, who have experienced nothing but a perpetual gloom form the Euro Zone and American exchanges may mull a focus on to other emerging economies in Asia especially the ones that form the ASEAN League where a better growth forecast in the near term is thriving on increasing domestic consumptions and demands backed by good governance of the policy makers.

Buying into ASEAN 40 Index ETFs is encouraged on the pretext of their immunity to the western crisis, and United States on the road to its recovery has added more favorable conditions. In order to avoid certain risks like market volatility, geopolitical and liquidity problems; an ETF approach seems the right way to go. This is due to its basket methodology and overall flexibility when it comes to trading. Invest in Southeast Asia tracking the performance of the FTSE ASEAN 40 index encompasses the largest and the most liquid companies of the five vital nations of the said region (Indonesia, Philippines, Malaysia, Thailand and Singapore). These funds that normally charge an expense fee up to 65 basis points annually also benefit their participants in form a dividend yield along with high annual value growths.

Latin America Distribution Channel for Newbies

When I am at an event with colleagues that are not yet doing business in Latin America, I am often asked the same questions. This leads me to believe that these are the topics that most people interested in the Latin American channel would like to learn about. So I thought it would make an interesting article to answer these questions here for those that are new to our channel in this region of the world.

How big is the market?

Latin America is comprised of over 20 countries, which is home to approximately 550 million people. Because their buying power is not as high as it is in the USA or more developed countries, they are much more price sensitive. A rule of thumb to use from a manufacturer’s perspective is the 5% rule. The 5% rule is that sales of your product line will be approximately 5% of your revenue in the USA. Obviously this is not set in stone and some companies reach 10% and higher, however it is a quick barometer of what to expect in the region.

As for specific markets, here they are in descending order: Brazil, Mexico, Argentina, Colombia, Venezuela and Chile. These top six countries represent 80% – 85% of the total Latin American market, depending on who’s numbers you want to believe, with Brazil being the largest and representing approximately 45% of the entire Latin American market. All the other countries not in the top six will make up the remaining 15% – 20% of the total market.

Is there a technology gap?

Back in the late 80’s and early 90’s, there was somewhat of a technology lag in Latin America. While more mature markets in that time-frame were selling IBM ATs, Latin America was still buying IBM XTs (I realize I’m dating myself here but it helps make my point). This was due to a lag or gap in technology where the Latin America market just wasn’t aware of the newer technologies available. However, since the mid to late 90’s, Latin America is up to speed on the latest and greatest product offerings coming from the Americas, Europe and Asia. However, today in some countries we have a financial gap, and not a technological gap. Why a financial gap? It comes down to buying power. For example, if you have a bank branch manager that makes $12k per year and needs to order 500 LCD monitors for his branch, they will go with the smaller size LCD because of the difference in price. A US$20 difference per monitor on a 500 unit deal is almost equivalent to his salary for one year. In the USA and other mature markets, when the difference for an LCD monitor is US$20, most consumers go with the newer, larger models because US$20 doesn’t represent a significant amount of money.

Does this mean you will sell only older technology in this region? The answer is definitely not. The channel in Latin America is well-versed on the new technologies and the example above applies to certain countries that offer opportunities to move some product in your warehouse. However, by no means underestimate or treat customers in Latin America as technologically inferior as this is a sure fire way to get them to buy your competitor’s products.

Do customers expect credit terms?

The direct answer is YES. There are many large, well-established companies in the market and they do expect payment terms. Most will ask for 60 day terms using the reasoning that it takes much longer for the product to reach them, however the grand majority have net 30 day payment terms. Smaller companies may opt to pay cash, but you will still get some resistance to do business with you. Most suppliers pay for credit insurance to hedge their receivables from any large defaults on payment. There are also organizations that allow you to share credit information with others in the channel such as the NACM ( National Association of Credit Management ), which keeps close tabs on common customers and have a warning system should a customer fall behind on his payments with another NACM member.

Many suppliers entering the market usually start with cash terms and then offer small lines as the business grows with their partners and they feel more comfortable working with them.

Is it safe to travel to Latin America?

Traveling to Latin America is like traveling anywhere else in the world. If you are in a large city, whether it’s New York, Tokyo or Mumbai, there is going to be crime. So it pays to play it safe and not be alone wondering out in the streets or stand out too much from the crowd. Sporting expensive electronics, watches, handbags and jewelry is probably not a good idea. In some cities like Mexico City, taking a cab off the street is not recommended either. Either have a customer drive you, use a cab from the hotel, or have someone call a cab for you and they will ask for you by name when the designated cab gets there. After 20 plus years of travelling into the region, I have never had an incident thus far. Now I’ll probably get ripped off on my next trip for having written this last line!

Well, I hope these questions are questions you would have asked. I realize the answers are rather short and to the point, without too much explanation or room for grey areas, but for time’s sake, we have to keep it this way. Obviously these topics can be really delved into, but we’ll leave that for some other time.

Feel free to contact me with any specific questions or comments.