Global PerspectivesApril 23, 2020

Q&A with APAC Strategist Dave McCaughan: Insights from Bangkok


To better understand our situation at home, RETHINK Retail Editor-in-Chief Julia Raymond spoke with APAC strategist Dave McCaughan about life in Bangkok during the COVID-19 outbreak and his predictions for retail in the West.

 

Julia Raymond:
Can you give us some first-person insights as to what’s going on in your area?

 

Dave McCaughan:
The lockdown here in Thailand, the real lockdown, started about five weeks ago in terms of shutting down all the shops.

 

Dave McCaughan:
[A couple of weeks ago] in Thailand it was what’s called Songkran, which is actually the new year. It’s the biggest single holiday weekend of the year. Three weeks ago, the government declared that, for the first time ever, Songkran basically didn’t exist. They basically said “No, we’re not having Songkran this year.”

 

Dave McCaughan:
Imagine saying to 300 million Americans that Christmas or New Year’s no longer exist. It doesn’t work that way. But one of the things they did do was put a 10-day ban on all alcohol sales across the country.

 

Dave McCaughan:
In my home country of Australia, and I imagine in America and many European countries, the thought of saying “No alcohol sales for 10 days,” would cause a social stir. Here, it’s problematic but maybe not so bad. It’s also indicative of the fact that governments have to deal with a bunch of local issues that, when you look at it from a big global perspective, or maybe from a Western perspective, you’re not really thinking “What does that really mean?”

 

Dave McCaughan:
I was actually on a Zoom call a few days ago with a bunch of senior business people in Bangladesh, and they put together a session where we spoke about what they should do about their brand in this time of crisis.

 

Dave McCaughan:
What was really interesting for me was the way in which one guy expressed the frustration that, the way he put it literally was “All this social listing and distancing and all that sort of stuff, that’s just elitist Western ways of doing things which are impossible,” in what he called the “real world.”

 

Dave McCaughan:
In a place like Dhaka, they estimate there are about six million people that basically have enough money to last three or four days without working. The numbers are huge.

 

Dave McCaughan:
One of the things that this guy was alluding to that is the reality in this part of the world, but maybe we don’t think about from a Western perspective, social distancing is a white-collar privilege. Basically, only the middle class can really do this, and that working people in these big Asian cities and in the countryside can’t sit at home for three weeks.

 

Dave McCaughan:
First of all, they’re living in very, very crowded conditions, much more crowded than my apartment. The other thing is they just don’t have the facilities. Many people around the world stocked up the freezer, stocked up the fridge and cupboard, and bought tons of toilet paper.

 

Dave McCaughan:
But there are literally billions of people on this earth that cannot do that. They literally can’t stock up.

 

Dave McCaughan:
Many parts of Asia are still trying to lock down. Some are locked down pretty efficiently, and some are still trying to lock down as they went through the process of what can be done and what can’t be done. Then you’ve got other places like Japan, which sort of took it seriously, sort of tried to put off the bad stuff because they were trying to figure out about the Olympics, and now they’re trying to lock down again. People are getting very worried again about how it is.

 

Dave McCaughan:
The social structures and the business structures of Japan are sort of unique, which makes it very difficult to work from home.  The infrastructure of the companies doesn’t necessarily make it easy for that.

 

Julia Raymond:
Why is that? What do you think the big drivers are in Japan?

 

Dave McCaughan:
For example, the Western mentality is that you work to live. We go to work so we can afford to live the life we want to live. We could easily say, for those of us that can work from home “Okay, I’ll try working from home.” Maybe it’s a little bit problematic, and maybe it’s not as efficient as we thought it was going to be, but we’re learning to cope with it. You, me, and probably everybody that’s reading this, has in some way adapted. Their company has in some way adapted.

 

Dave McCaughan:
One of the problems in Japan is social obligation. Work is a social obligation. For many office workers in Japan, the obligation to the company is still number one in their eyes. We’ve heard about people work for the same company for their entire lives live. And while this has been reducing, if you take middle management in Japan for most corporations, these are guys are, in a sense, basically married to the company.

 

Julia Raymond:
I have heard that. Is that still going on?

 

Dave McCaughan:
Of course. And then the companies themselves are not geared up. You can have what seemed like world-leading companies in many areas, but at the same time, they’re finding it difficult to cope with the whole idea of not being in the room together.

 

Dave McCaughan:
Part of that, too, is consensus building. Japan is probably the leading edge, but in a number of countries, consensus is more important. If you think about the American model of doing business, it’s more top-down. You pretend there’s consensus there but it’s not real. It’s all about top-down management. Let’s face it: To get anywhere, it’s the guy that basically makes the decision, does something, and then shows off to the rest of the company “Hey I came up with that.”

 

Dave McCaughan:
That doesn’t work in Japan. You’re seen as a negative asset if you do that sort of stuff. In a country like Japan, you’ve got to rethink the way you receive consensus. Video conferencing can be problematic.

 

Dave McCaughan:
In some cultures, like in Japan, the background is the most important thing. You judge how you say something and what you say by the background. Literally the way you say things can change depending on backgrounds. The conversation’s the same, the topic’s the same, but the way you say it will be different depending on what’s going on in the background.

 

Dave McCaughan:
So different cultures are having to deal with these things in different ways, just as a work practice, and that creates beyond the obvious technical difficulties.

 

Julia Raymond:
It sounds like the social constructs in Japan make that digital communication a little bit more difficult because of how important the context is of the physical environment.

 

Dave McCaughan:
Yeah, and it’s not just Japan, but Japan might be the leading edge of that, in the same way that Japan is often the leading edge of many things.

 

Dave McCaughan:
Again, because you have different types of governments in Asia, many of the governments are top-down governments. They’re not in the same mode that we might think as an open democracy or whatever. But you also have some of the leading governments in the region like Singapore, which has done a pretty good job at locking the place down.

 

Julia Raymond:
In terms of the Western world and more developed areas across Asia, Europe and North America, do you see retail opening back up within the next six months?

 

Dave McCaughan:
Like everywhere else, I think the big mainstream retail has obviously had to adapt. But online sales for a lot of stuff are not matching what would’ve happened before all this. Some categories are doing really well. Who would have imagined that this is would be an absolute boom period for cosmetics? When you look at online sales of cosmetics in a place like China, in the first month of the lockdown, they went through the roof.


Dave McCaughan:
And you’re thinking, what the heck? These people are locked in, they know they’re going to be locked in for weeks and weeks, and we’re not talking about therapeutic skin products. We’re talking about cosmetics. Makeup. What’s the story with that?


Dave McCaughan:

But the truth is that for many people in China and across Asia, they’re doing a lot of things like vlogging and live streaming. The levels of that were much higher in China than they were in Western markets before all this started, and of course, this has just primed it through the roof.

 

Dave McCaughan:
But at the same time, there are other places and lots of people in the world where this has become “This is how I’m going to present myself.” And as you know, there are tons and tons of new videos on YouTube and stuff about how to present yourself on Zoom. What’s the right lighting to use? Where should you sit? How should you do your makeup? All these sorts of things.

 

Dave McCaughan:
This is where you see some unusual angles in terms of retail, where “How am I going to look” becomes important. But having said that, yes, of course, a lot of the hard retail is shut. The brick-and-mortar stuff is shut. People have moved sales to Amazon or Lazada, which is the big e-commerce site in some parts of southeast Asia in particular.

 

Dave McCaughan:
Those places are booming. Obviously, business is really hectic for lots of companies trying to get on there, move onto there, but very difficult for them to figure out. If you think about it, for a lot of companies that haven’t been really focused on that, it’s very difficult to figure out how to actually do it, and how to market that, for example.

 

Dave McCaughan:
And it’s not like there aren’t already lots of companies that have been used to using Amazon and Lazada and all these e-sites. For a lot of companies, it’s always been something, “We do that, but don’t take it seriously.” Now it’s like “How are we going to take it seriously when these 10 other companies are already taking it seriously—how do I break through?”

 

Dave McCaughan:
But as to retail opening, I’m not holding my breath it’s going to be next week, that’s for sure.

 

Dave McCaughan:
I think generally, in terms of general merchandise and stuff, we’re way off in most marketplaces from them opening again, and I’m not going to say it’s going to be six months. It’s certainly, in most places, months off before we will see shopping malls opening back up.

 

Julia Raymond:
Do you think business will fundamentally change for the long term? Will people be used to a certain level of not only service but also sanitation?

 

Dave McCaughan:
I always go back, I actually lived in Hong Kong during SARS. Of course, there was a period for about eight to 10 days where literally Hong Kong shut down. We all worked from home, full social distancing, no one was allowed to go to the offices, and everything was closed.

 

Dave McCaughan:
About two, three months after SARS it was all back to normal. The sales of cleaning products had gone back to normal. Every elevator for about a month after SARS, had hand pumps or sanitizer right next to the elevator, and that all disappeared after a couple of months.

 

Julia Raymond:
That’s really interesting.

 

Dave McCaughan:
But this is different.

 

Julia Raymond:
Why do you think this is different?

 

Dave McCaughan:
Time. There, it was a really inconvenient anomaly, and we had a period that dragged on for months when it first seemed to be over, but there were only a couple of really hard weeks. Maybe two weeks it was getting worse and worse and people were getting more and more worried, and then the week when the city shut down. After a month, things were pretty much back to normal.

 

Julia Raymond:
So it was just three weeks of craziness?

 

Dave McCaughan:
Yeah, but a lot of things were different. A lot of people in Hong Kong were able to cope. A compact environment, but able to cope with it. The compactness made it dangerous, but it also meant that the government and everything could make things happen. By the way, you also didn’t have as much of the civil unrest that’s going on that you do now.

 

Dave McCaughan:
It was terrible at the time, it was very nervous time, but it all passed. And if you’d asked me six months ago, I’d say “SARS? It was a pretty interesting time.”

 

Dave McCaughan:
But this is very different. This is the whole world in lockdown. This is weeks and weeks of this. This is not your kids missing a week of school, but your kids missing whole terms of school.

 

Dave McCaughan:
But now, depending on the country, the system is geared to education, and rejigging the education environment to be able to cope with this a bit better. Work practices. We work from home, but working from home in 2002 meant a lot of phone calls, and a bit more email, but we couldn’t do Zoom and all this sort of stuff.

 

Dave McCaughan:
Now we have a whole bunch of companies in all sorts of industries that are trying to make things work. Maybe it’s reduced staff and reduced time, but we’re learning a whole bunch of new things about how to work from home, so we will see that jump that we’ve probably been predicting for a hundred years of working from home more.

 

Dave McCaughan:
The adoption of using technologies like we’re using right now to interface is obviously gone through the roof. If you think about things like the conference industry, the business travel industry, will they fully recover? No.

 

Julia Raymond:
Do you think that’s a short-term trend where it will be the next three years people are more cautious, we stay back, or it will become part of the norm to do more virtual conferencing?

 

Dave McCaughan:
I think most of the trends that we’re going to see change are longer-term trends, they’re just going to be sped up and magnified.

 

Julia Raymond:
So, it was a trend that was already there, this accelerates it, is what you’re saying.

 

Dave McCaughan:
Yes, in the same way that e-retailing had been going up, now it’s been magnified and will become much more normal for many people. The idea of doing your weekly or your daily grocery shopping online had never really caught on, but now it’s become pretty easy for many people in many places.

Dave McCaughan:
People will still go back to the shops, but maybe not as much, not as frequently. Maybe they’ll buy a bigger portion of stuff. And a lot of those sort of things, the lifestyle issues and stuff, while we’ve looked at long-term changes and long-term predictions, will now come into the fore and get sped up in the way in which we do things.♦

 

 

Dave is Founder and Storyteller at Bibliosexual, a brand story consultancy, as well as the Chief Strategy Officer for Ai.agency, a virtual network of specialists in using AI-driven market research tools to understand brand narratives. Prior to his current roles, Dave was a strategist at McCann, where he managed region-wide accounts across Asia for several decades.