How A Local Brand Successfully Competed Against the Multinationals
As ASEAN market integration draws near, many local companies are fearful that giant multinationals from neighboring countries with more sophisticated operations would overwhelm their firms. However, at least one feisty, local firm is not afraid of the challenge and is in fact beating far larger foreign companies.
This amazing company is Carlson Corporation, a leading supplier in the electrical and lighting business with its now very popular Akari brand. A look at almost any hardware in the country would show the strong market acceptance of this relatively new brand. Its rapid growth against well-known brands like Philips and General Electric provides a great case study on how a local firm could effectively compete against multinationals.
The year was 2002 and the lighting industry in the Philippines was witnessing monumental changes in buying habits and market behavior. Energy saving lamps more commonly known as compact fluorescent lamps (CFL) were gaining popularity, replacing the Jurassic incandescent counterparts in incremental growth rates. Whenever and wherever lighting was needed, CFL was the answer.
The big three players Philips, GE and OSRAM—all of Western pedigree but with manufacturing bases in Indonesia— were short of monopolizing the lighting market with intense advertising, promotions and product innovations, but with price tags beyond the reach of the average consumer. The cost of low energy saving consumption was pretty high, and it was time for energy saving lamps to be affordable, reachable and cost wise-reasonable.
Affordable Lighting Solutions
Enter the neophytes into the land of the giants. China, with all its manufacturing might, started flooding its neighbors with lower cost CFLs that made the market leaders look like profiteers. Suddenly the Philippine market had more choice and real savings that do not cost the consumer an arm and a leg.
Such was the scenario when Akari was born. Having been immersed in the electrical and lighting business in the Philippines for the last 35 years, Carlson Corporation was not a newcomer in the industry with its exclusive distribution of Toshiba being well entrenched in many parts of the country. But Japanese brands carry hefty price tags and the consumers were shifting to lower cost alternatives. It was a make or break, do or die decision to launch a new brand so as not to lose the market which was slowly migrating to other brands.
Since its inception, Akari had one objective—provide the largest range of affordable lighting solutions that is low cost but not low quality. Many years after, the lighting landscape in the Philippines continues to be catered by more than 15 brands and Akari has stayed competitive by staying true to its philosophy.
With more than 1,000 different product offerings; more than 1,000 dealers, distributors and retailers; 800 employees; 50 manufacturing sites across multiple locations; and hundreds of patents on product developments; Akari has successfully immersed itself into the lifeblood of the Filipinos.
Widest Product Range For Consumers
How did Akari gain so much ground in such little time? Akari prides itself in having one of the widest ranges of lighting and electrical products encompassing various categories at very affordable and competitive prices. A huge portion of the Akari workforce have tenures of employment coterminous with the Akari brand—they have been with the company through its birth pains, disappointments of developing, and finally the satisfaction and gratification of expanding the brand.
Akari chooses only the most quality-conscious manufacturing facilities with low rejection rates to produce its items. Quality control is done not only at point of production but perfected at point of inspection as well. This indicates a long-term perspective instead of going for short-term gains by passing off cheap but low quality items.
Although Akari had several celebrities as brand ambassadors, from Asi Taulava to Alvin Patrimonio and now Vic Sotto, its real army of endorsers are its satisfied consumers who have received value for their money by investing in an Akari product in their home. Having discovered that durability need not be expensive, more and more people have taken to Akari over other leading brands.
Having achieved so much already, the company is not one to rest its laurels and has in fact started to spread its wings to other countries. Several offices have now been considered abroad, both to improve its sourcing and to tap new markets. In light of such accomplishments, local companies should look at the coming ASEAN integration as a huge opportunity to expand their market. But, as shown by Akari, there must be a stronger focus on both quality and price as today’s consumers are wiser with their money.
*Originally published by the Manila Bulletin. D-6, Sunday, March 9, 2014. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.