Maks Mukundan: The company has grown the amount of Indochina business accounted for by Thailand to about 5 per cent. It hopes to increase this to almost 10 per cent by 2010.

The company's "Indochina" territory covers not only Laos and Cambodia, but also distant Mongolia, wedged between China and Russia. The countries are new emerging markets for Unilever with lots of business potential, according to Unilever Thai Trading's managing director for Indochina business, Maks Mukundan.

He said Unilever launched its Indochina trade in 1995, when it was handled directly by Unilever UK. Unilever Singapore then took over the business in about 1997 when the company introduced marketing activities. The Indochina business was finally handed to Unilever Thailand in 2000.

"We've been able to increase the ratio of Indochina business from 3 per cent of Unilever's business in Thailand in 2000 to about 5 per cent today. We want to grow the business to almost 10 per cent by 2010," said Mukundan who, before moving to Bangkok, was the company's general manager for new business development based in Singapore.

Unilever Thai Trading achieved total sales of more than Bt38 billion in 2006.

Mukundan said Thailand was also a Unilever centre for product development and technology, such as creating new fragrances as well as manufacturing.

"With strong experience in developing such products, we [Unilever Thailand] have been promoted as a regional centre for brand building, advertising and consumer relations related to haircare, skincare and some detergent products," Mukundan said.

Indonesia is a regional centre for toothpaste and the Philippines for deodorant. Singapore is the location of the company's Asian head office, looking after administrative and policy-making matters.

"We have applied marketing principles formulated in Thailand to the Indochina markets. However, there is a need for modification to meet cultural characteristics and local limitations," he said.

Mukundan said insightful understanding of the markets and correct strategies were key to building successful brands in the emerging markets of Indochina. He gave the example of Laos, which is one of the company's highly successful markets, with big business potential.

"Our products, from detergent to shampoo, personal care and food categories, are well established and have become top-of-the-mind brands in Laos. Our success is credited to our ability to understand the dynamics of the local market and successfully build the product categories," he said.

Unilever needed to overcome many challenges in Laos, including the limitations of the local media, regulations, over-reliance on promotions, and consumer apathy.

"We regard Laos as a potential, emerging market," he said. "The country has a total population of 5.7 million, or about 959,595 households. There were about two million tourists to Laos last year. The country also enjoyed GDP growth of about 8 per cent last year."

About 39 per cent of the Lao population is aged under 15, while 57 per cent are aged from 16 to 65. Only 4 per cent are aged 65 and over, he said, while only 27 per cent of the population live in urban areas and 73 per cent in the countryside.

All of Unilever's major products are marketed in Laos, including Breeze, Omo and Viso laundry detergents, Sunsilk, Clinic and Dove haircare products, Close-Up toothpaste, Lux bar and liquid soap, Pond's facial care products, Wall's ice cream and Knorr seasoning products.

The company currently has 12 local distributors for its consumer products covering almost 50 per cent of total mom-and-pop stores throughout the country. It expects to increase its retail coverage up to 60 per cent within the next two years.

Mukundan mentioned Unilever's launch of Axe deodorant in Laos as an example of overcoming major local challenges.

"Axe has been available in Laos for years, but few male teenagers were really engaged with the brand, due to its western execution, which is quite different from Laotian cultural preferences," he said. The company had to sell its Axe product to Laotian teenagers by riding on the success of one of the most popular songs in Laos - a song called "Mr Hinsom" by the Overdance Band.

Unilever had a new song composed as a kind of sequel to the first. It was performed by the same band and broadcast by radio and music TV channels.

As a result, Axe is now one of the most successful deodorant brands in Laos, enjoying a market share of more than 50 per cent.

Kwanchai Rungfapaisarn

The Nation

Luang Prabang, laos