Social media is more important than phone calls or email for customer experience

Source: Genesys infographic.

Genesys, a provider of customer experience (CX) and contact centre solutions, today released a study which reveals that more than a third of companies in Asia Pacific (37%) consider social media as one of their most important CX channels.

The study* shows that while face-to-face communications still ranks as the top CX channel, social media is now more important than both phone calls and email interactions.

“Consumers are going digital more than ever,” said Bruce Eidsvik, Senior Vice President of Genesys Asia Pacific. “In Asia, we hardly think twice when shopping online or posting our feedback and enquiries on companies’ social media channels, therefore it makes sense that we now lead the world when it comes to digital CX engagement. As economies across the region continue to move towards more service-based economies, Asia’s leadership in digital engagement places it as the pioneer that other regions will look to for CX innovation.”

The EIU study shows a direct correlation between CEO engagement in customer experience and profitability. When CEOs lead CX initiatives, those initiatives are more likely to transform a company’s future success. The survey found that 58% of companies reported much higher profitability than their competitors when the CEO is in charge of customer experience, and 59% experience better revenue growth as a result of prioritising CX investments.

Source: Genesys infographic.

In Southeast Asia, investment in customer experience is growing faster than other regions, with 42% of companies boosting investments by more than 10% in the past three years, with an expectation that they will increase by the same margin over the next three years.

The study also found that CEOs in Southeast Asia are more likely to have the final say on CX initiatives than CEOs anywhere else in the world. “Ambitious companies are driving large investments in customer experience initiatives to adapt to the digital communication channels customers are demanding,” said Charles Ross, Senior Editor at the Economist Intelligence Unit and lead researcher of the study.

“By prioritising CX and placing the CEO in charge, companies are taking an extra step to drive revenue growth and improve profitability.”

There is still room for improvement however. Southeast Asia (24%) is the second lowest sub-region in Asia Pacific by customer ratings of their overall experience with companies. Therefore, organisations in the region need to step up their game if they are to make the most of their growing investments in CX technology.

Interested?

The global and Asia Pacific reports are available for download
View the complete infographic

*Conducted by the Economist Intelligence Unit, the survey of 516 senior level executives in 21 countries explores the impact of customer experience efforts and leadership on business performance. A third of the respondents were from Asia Pacific, including Southeast Asian markets like Indonesia, Philippines, Singapore, Thailand and Vietnam.

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CIMB shares regional strategies for joining the ASEAN Economic Community

Source: CIMB. Chairman of CIMB
Group YBhg Dato' Sri Nazir Razak
(right) and Director, Southeast Asia
of The Economist Intelligence Unit
Justin Wood showcasing the
special report Re-drawing the
ASEAN Map: How companies are
crafting new strategies in
Southeast Asia. 

CIMB has launched Re-drawing the ASEAN Map: How companies are crafting new strategies in Southeast Asia in collaboration with the Economist Intelligence Unit (EIU). The report, an independent management brief co-sponsored by CIMB and Baker McKenzie, is aimed at preparing companies for the pending unveiling of the ASEAN Economic Community (AEC) on 31 December 2015.

Justin Wood, Chief Economist and Director for South-East Asia at the Economist Corporate Network, part of the EIU, said, “We surveyed 170 business leaders running companies in ASEAN for this report. Of those companies, 76% now have a strategy in the region that is specifically oriented around the ASEAN bloc. Most companies in our survey are clearly taking steps to organise themselves around the unfolding economic liberalisation and integration in South-east Asia. 

"Interestingly, though, non-ASEAN companies are much more likely to have an ASEAN-oriented strategy (81%) than local companies (only 55%). The big global multinationals are further along in recognising the significance of the ASEAN story and are positioning themselves to benefit from ideas like achieving scale in the region, consolidating operations and manufacturing, and exploring how product and service strategies, as well as sales and marketing strategies can be harmonised and regionalised.”

Dato' Sri Nazir Razak, Chairman of CIMB Group said, "The independent findings of the report further reinforces the importance of ASEAN as an economic region, and validates our decision as a bank to fully-embed ourselves in and across ASEAN. Foreign multinationals are very much aware of the potential that the region represents and local companies really need to step up their game. Generally speaking, local companies in ASEAN countries have an incumbent advantage but need to clearly define their strategy to both realise the opportunities and face the challenges of ASEAN liberalisation and the increased competition that this brings to the table.”

“CIMB has prepared for ASEAN. We have more research analysts on-the-ground in every country, a diverse staff force of over 41,000 individuals in every market across the region and the most extensive network of branches and ATMs. I would say that in terms of advisory, investment banking, trade finance, treasury and markets capabilities, we are best placed to advise any company located in an ASEAN country on how best to strategically leverage the potential of the region."

EIU identifies six areas of growth for Asia

The Economist Intelligence Unit's (EIU's) "industry dynamism" barometer, commissioned by InvestKL, Greater Kuala Lumpur's investment promotion agency, has seen a bright future for six industry sectors across Asia: engineering services, environmental technology, food processing, healthcare, oil & gas, and wholesale & retail. 

The findings indicate that continued corporate investment in Asia will support longer-term opportunities. Speaking at the launch of six reports under the barometer umbrella, Zainal Amanshah, CEO of InvestKL, said that the findings "reinforce the importance of Asian cities as drivers of the region's growth." 

The six sectors are:

Engineering Services 

Rapid economic growth has translated into engineering opportunities for US$8 to US$9 trillion of new infrastructure needed between 2010 and 2020. Asia's engineering companies are growing at breakneck speed as they capitalise on these opportunities. Between 2005 and 2011, the approximately 120 engineering companies listed on the region's stock exchanges grew top-line revenues by an average of 20% every year. 

"Remarkable rates of economic growth make Asia the part of the world for engineering services firms, with this region accounting for 36.6% of global GDP in 2013, up from 26.8% in 2001," said Amanshah of the findings in this sector, which is also a key economic area identified by the Malaysian government.

Environmental Technology  

Policy support for renewable energy in Europe may have fallen, but is strong in Asia. Asia is experiencing record levels of cleantech investment – across the six years of this study, value of fixed assets per company increased by an average of 9% every year. The combined revenues of Asia's cleantech firms more than doubled from 2005 to 2011, while growth rates were at nearly 13% a year for the same period.

"The huge wave of urbanisation sweeping Asia requires a lot more investment in ensuring our urban environments and infrastructure are more efficient," Amanshah noted. "The opportunities for companies that can provide sustainable solutions limiting the environmental impact of our rising population are significant - to put them into context, this region already emits more carbon dioxide than the US, EU and Russian Federation combined."

Food Processing 

Rapid urbanisation is changing food consumption patterns, and creating opportunities for more efficient distribution, including upstream into rural supply chains. Asia's food companies are thriving as they leverage these opportunities. Between 2005 and 2011, the 400 or so food companies listed on the region's stock exchanges grew top-line revenues by an average of 23% every year.

However, companies will need to invest in innovation in order to tailor their products to the diverse local taste preferences across the region – global brands will have to localise their products, while Asia will be a source of new home-grown food ideas (such as the halal-certified food market). 

"We already account for more than half of the world's population. By 2040, we will add another 800 million people to our count – all of whom are rapidly getting richer," said the CEO of InvestKL. "Asia's spending on food is forecast to double between 2007 and 2050 in real terms – representing three quarters of the global increase over the same period."
 
Healthcare

In the hospital sector, Asia will need an additional 180 million new hospital beds in the next decade. In pharmaceuticals, Asia's market will grow more than 13% annually – from US$214.2 billion in 2010 to US$386bn by 2016.
 
In 2007, Asia and Oceania together accounted for 18.1% of global biomedical research. By 2012, that share had grown to 23.8%. Between 2005 and 2011, revenues at Asia's listed healthcare fims rose by almost 23% a year. Profits rose even more swiftly, by 31% a year.
 
Challenges on the horizon include competition that is intensifying as the number of firms entering the sector grows. Costs, especially labour-related, are rising rapidly. And regulations are getting much more stringent as a growing middle class demands greater safety, security and consumer protection. 

With populations and incomes rising, Amanshah noted that "health spending is growing even faster – Asia's share of world health spending is expected to rise from 21% in 2012 to 24% by 2017. Although parts of our region's population are still in need of basic healthcare services, more and more are beginning to require treatment for 'diseases of the affluent'." 

Oil & Gas

"ExxonMobil expects a significant rise in Asia's share of global energy consumption, from 38% in 2010 to 45% by 2040," said Amanshah. "Meeting this rising demand for oil and gas in this region will be challenging, even though some countries are net energy exporters (such as Malaysia and Brunei)."
 
Growth in the demand for gas will outstrip all other fuels, given its cleaner environmental characteristics and superior flexibility.
 
Most countries import more than they produce. BP calculates that Asia produced 8.3 million barrels of oil a day in 2012, or 9.6% of global production, but consumed 29.8 million barrels of oil a day, 33.5% of global consumption. 

Despite being a net energy importer, the Asia Pacific region still has plenty of potential for upstream development. The biggest opportunities exist in new gas fields, such as in Myanmar and Papua New Guinea. In order to extract gas from Asia's more complicated fields, regional oil and gas companies are investing more heavily in new technologies. In 2011, Asia's 50 listed oil & gas firms spent US$2.13 billion on R&D, up from US$368 million in 2004.

Given the landscape of opportunity in Asia, the region's listed oil and gas companies are reporting strong revenue growth. In 2004, revenue per company in the sector stood at US$2.9 billion. By 2011 that had grown to US$10.2 billion, an average annual growth rate of 20%.
 
But while growth is rapid, the industry also faces challenges in the form of increased competition and costs, and talent shortages. These issues contributed to the return on capital employed for Asia's listed oil and gas sector falling from 19% in 2004 to 8.3% in 2011.

Wholesale and Retail

"The population of Asia is predicted to be 4.6 billion by 2040, with average consumer wealth rising in tandem," said Amanshah. "To put the impact of this population increase in perspective, in 2001 Asia accounted for 26.8% of global GDP measured using purchasing power parity – by 2013, our share had risen to 36.6%. Significant urbanisation and penetration of modern retail formats are driving sales."
 
Asia's homegrown retail companies are growing. Between 2005 and 2011, revenues at Asia's listed retail and wholesale firms rose by an average of 21% every year. Most of this growth was organic in character. Between 2013 and 2018, the EIU forecasts that retail sales in Asia Pacific will grow by 10.2% every year, whereas globally retail sales will grow by only 6.9% a year. In 2013, Asia had 80m square meters of modern retail space, but this will rise to 135m square meters by 2018. 


Retail opportunities are highly varied, from mass market grocery chains and fast-food outlets to high-end fashion stores and luxury boutiques. The opportunities for online retail look especially good, with growth rates of close to 17% a year.  

While topline growth is exciting, a number of structural issues are making profits growth harder to achieve. Human capital with retail skills is in short supply, forcing companies to invest heavily in training. Wages are rising, with staff costs up from 3.5% of operating revenues in 2005 to 5% by 2011.

Further reinforcing the eastward shift of power is a study by McKinsey & Co quoted by the EIU in the reports, which notes that 420 cities in emerging markets (more than half of which are in Asia) are expected to contribute 45% of global GDP growth between 2010 and 2015. The report further notes that Southeast Asia will have many significant economic engines of its own, with urban population growth and productivity improvements rising faster than in rural areas, driving incomes up at a much faster pace. This combination of faster population growth and faster income growth led the EIU to conclude that it "makes cities the dynamos of the future".

The six papers, covering engineering services, environmental technology, food processing, healthcare, oil & gas, and wholesale & retail sectors, can be found here.