Opinion: Do Malaysia and Indonesia have the appetite to create globally competitive brands?

Building a country's soft power is akin to building a consumer brand. A focused strategy and an agenda is needed for countries and their national branding to remain influential worldwide. Malaysia was considered by the general public and specialists to be the the third most influential country in ASEAN, according to Brand Finance’s Global Soft Power Index 2021. Globally, Malaysia was ranked 41st most influential in the eyes of the general public and 44th in the eyes of specialists. Its reputation score was 6.1, placing it second in ASEAN after Singapore and 28th globally.

Indonesia was ranked fourth most influential in ASEAN and is considered by the general public to be 47th most influential globally. In the eyes of specialists, it is 48th most influential. Its reputation score was 5.7, placing it fourth among the eight ASEAN countries surveyed and 46th globally.

Meanwhile, both the general public and specialists consider Singapore to be the most influential country in the ASEAN. Singapore's combined reputation score is also among the highest in ASEAN, improving by one rank. According to Brand Finance, the ASEAN countries in its research have not seen a significant change in their reputation scores compared to last year. This could probably be attributed to a lack of perception of how well the pandemic was handled within the territory.

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How the country brands itself, along with local brands from the country, play an important role in building a nation's soft power.

That said, having a local brand is still not enough, Samir Dixit, managing director of brand finance in Asia Pacific, said. He explained that these local brands must be promoted and recognised globally, only then would it help.

For example, Swiss watches, chocolates, ice creams, cheese and dairy products all promote the soft power of Switzerland in terms of strong and positive recall of the country, its appeal for tourism, demand for country's exports and foreign direct investment, among others. Dixit explained that Malaysia and Indonesia have very different country brand dynamics as they vary in size, geographical access, demographic profile, population mix (despite being predominantly Muslim countries) and the number of brands from the country that are known globally.

While Dixit described Malaysia to be more modern, dynamic, extrovert and more outward looking, he said that Indonesia is still currently a little more traditional, introverted and more inwards focused. Malaysia is also said to be more brand-focused than Indonesia which is more commodities-focused. Nonetheless, in Dixit's view, both countries still lack the "appetite or intent to create globally competitive brands".  

Today, some brands from Malaysia which have garnered global recall include the likes of PETRONAS and AirAsia. PROTON and Lotus were the third but Dixit said they were sold to Geely along with the brand name. "Someone should have guided PROTON not to sell the blanket rights for the brand with the company. Someone should have structured the deal better and not sell the brand with the company," he added.

Meanwhile, Dixit said Top Glove became popular due to the pandemic, rather than any strategic brand building effort by the company's management. "The Top Glove management may not even be aware of the true value of their intangibles and how they contribute to the business's success," he said. Dixit added that Maybank, JobStreet and Sime Darby are all regional brands at best. 

On the other hand, he said Indonesia "hardly has any globally recognised or popular brands". When asked about Indonesia's national airline Garuda, Dixit said it is "hardly global and not globally competitive either". "Having a global network would not make it a globally recognised and popular brand. That requires strategic brand management efforts by the senior management and the board of the company," he added.

"Most corporates in both countries are very business-focused and not so much brand-focused. Ask most of the CEOs of the large businesses if they have any brand KPI at a board level or if they know the value of their brand and how it drives their business success and future growth, and you would likely be greeted with some long pauses and some far into the horizon stares," Dixit said. He added that both countries need to strongly focus on the internationalisation of their brands if they really want their brands to drive their soft power.

Dixit also previously explained that many ASEAN nations ranked below the top 20 due to a lack of a structured brand building agenda by most ASEAN nations for their individual countries as well as lack of agenda to build the ASEAN brand on the whole. To climb the ranks, he added then that "ASEAN countries need to build a country brand first and have at least five brands from the country which are globally recognised and are popular". For Indonesia in particular, language is said to still be a big barrier. 

More brand professionals needed at the board level

Talent and skills no doubt play a key role in helping countries create globally competitive brands. According to Dixit, Malaysia and Indonesia need to have more brand professionals sitting at the board level across the key corporates and these brand professionals must continuously challenge the management for stronger brand building, improve competitiveness and globalisation of local products. Having a strong local brand mark also helps, he said, as this can be effectively used to drive competitiveness for the country's products. 

Currently, SMEs in Malaysia can look to have their products recognised and accepted both locally and internationally with the National Mark of Malaysian Brand. Developed by SME Corporation Malaysia in collaboration with SIRIM QAS International, the National Mark depicts quality, excellence and distinction of products and services by Malaysian companies. According to the Malaysia External Trade Development Corporation, the government seeks to change the perception that SME products are of lower quality, reliability and low packaging standards than the big brand names.

"The brand must be driven as a strategic agenda even at the government level, along with strong KPIs. Vietnam, for example, has the KPI to double its country brand value in five years. The Prime Minister and various other ministries are forging ahead with their brand building efforts," Dixit added. As part of its 2021 to 2025 socio-economic development plan, Vietnam is eyeing an annual GDP growth of 7% to make up for the COVID-19 induced slowdown, The Vietnam Times reported.

At the same time, Dixit said both Malaysia and Indonesia must also track their soft power and country brand regularly and have a strategic recovery plan for struggling brands. "At least compete regionally first before going global. Don't just compete within your own countries and cities. Also, education is crucial when it comes to raising awareness about the importance of a country brand when it comes to soft power," he added.

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(Photo courtesy: 123RF)

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