Information can be easily found everywhere nowadays. However, as the common saying goes, don’t believe everything you read. Peter Snell, CEO of Ipsos Business Consulting who has been in the market research industry for over 30 years, reveals the past, present and future of working with the right information for market intelligence customized for business decision-making
By Leon Lee
biz.hk: How did you get started in the market research industry? What was the market like then? Snell: I actually started out in the marketing of precious metals in London in the 1970s. I was a precious metals dealer for four years but there wasn’t much marketing involved, and I really wanted to get into marketing. So I went to work for AGB in the UK, which was probably the first truly global research player. My whole career developed in market research after that. After having worked for them in London for six years, I transferred to Hong Kong where I used to run the TV audience measurement system for ATV and TVB.
When I came out to Hong Kong, it was like a transfer of skills from the UK, and there was really a limited amount of research here. The market research industry was very embryonic here while it was highly developed in Europe. Initially, our work was primarily focused on Hong Kong but expanded to cover the region as businesses started to grow in Asia.
biz.hk: How has the industry evolved over the last 30 years?
Snell: You have to remember there was no Internet and there were no fax machines in the very early days. When I moved to Thailand, we got a fax machine and it was amazing because you could send questionnaires almost in real time from one hub to another. Before that, you would have to depend on a courier for an overnight delivery. Since the advent of the Internet, more specifically e-mail, it sped up all the transfers of information.
The digitalization of data collection has transformed the industry as well. You can collect information digitally, send it back to the central server, and have it processed in real-time. So the whole cycle has been compressed. Before the rise of the Internet, you would also have to go to libraries and industry bodies, and scan through publications and back issues of newspapers. Nowadays you just sit there and Google search, and there are subscriptions to all sorts of things making secondary research much quicker and the range of information much broader.
biz.hk: With the amount data out there, how do you separate good information from the bad?
Snell: It’s screening. It’s actually knowing what you need and then screening out the stuff you need from the stuff you don’t need. That’s a critical issue and a reason for analysts and researchers to understand the objectives, go out to find the information and then process that information to give clients a good recommendation about what they should do to enhance their business. You’re really trying to give them good quality information and direction in their decision-making to enable them to progress ahead of their competitors.
At Ipsos, for example, we have a system called the full circle analysis. Unlike consumer research, you don’t go out and interview 300 businessmen to get the answers. Instead, you get the client to share all their data as a background, then go out and do a whole load of secondary research before doing a load of expert interviewing. If you want to find out about a specific industry or a specific element of an industry, you don’t just interview from one angle but a number of different angles. For example, when I ask somebody in the business about the size of the market and who the major players are, I’ll get a set of answers; when I repeat the same questions with a distributor or a competitor, I’ll get a series of answers. I can then look at the distribution of answers along the different vectors and where the answers intersect. By the time I get to five or six different points of view about the industry, I pretty much know where the truth lies, and the truth is where all the lines intersect. It’s how we validate our information.
biz.hk: What sets you apart from your competitors?
Snell: Over the past five years, we’ve refined our offering to clients quite considerably by looking at what we’ve done historically and then codifying it into a suite of products that will answer their questions.
Also, we rely not on models or a partner coming in from America saying this is what you should do. The underpinning for our offering is fact-based consulting for the fact that markets can be very different from one to another location. We actually go into the marketplace and find out what the latest conditions and situations are. And when we come to make recommendations for our clients, we can be very specific about what they need to do.
biz.hk: Can you elaborate more on how that works?
Snell: This is the difference between us and the research side. They will say, “In order to answer this question, we will do a survey of 100 or 1,000 individuals.” Ours is not based on the same criteria because ours is a combination of data provided by the clients, secondary research that we get from a load of sources and then expert interviews. We tend not to operate on sample sizes because it depends how much information you get from a given person.
Let’s say if I go to see a person who’s responsible for a trade body and he gives me a huge amount of data that’s been collected from their members on production figures, we’ll have a huge data trove and we probably won’t need to do too many more interviews to verify the information before we can get a very clear picture of the market. In cases where data is really hard to find, we have to interview a lot of people. There is no minimum sample size; it’s however many people you have to interview in order to get to the truth.
biz.hk: Has Hong Kong or Asian businesses grasped the effectiveness of business information to their operations?
Snell: They are getting more and more accustomed to data-driven decision making. In the old days, particularly amongst smaller, medium-sized enterprises, people would make decisions based on their assessment of the market without any reference to an independent view of things.
In the big companies, decision-making has increasingly been fact-based. In small and medium enterprises, more and more people are looking for guidance in their decision-making to make sure they’re making the right choice. As you have a generation of executives educated in business schools, they’ll often go, “How do we know this is the truth? How do we know this is really where the market is? We really need to get some more information.” They’ve grown up in an information age.
Competitive insight or intelligence is an area that will grow. More people want to know what their competitors are doing. It’s not just observation but getting a bit more details and understanding their strategy and how it is being implemented. It is about understanding their strengths and what you can do to counter them.
biz.hk: You have a focus on six main sectors – Agribusiness, Automotive, Construction, Energy, Healthcare and Industrial. Which do you see will have the biggest impact in Asia in the next five to 10 years?
Snell: You can forget energy at the moment. The market for energy is [just not there]. Three years ago the market was flooded with solar panels, and prices collapsed. That’s good if you want to make green energy or get power to an island or rural areas. But it’s not so good if you’re in the business of manufacturing and selling solar panels. With the current prices of oil, there’s not much to do in energy at the moment.
The one where we do the most business right now is healthcare, not least because the population in Asia is aging rapidly. Although Indonesia, India, Vietnam, and the Philippines have very young populations, Japan has one of the oldest populations in the world while those in China, Hong Kong and Singapore are getting older. The combination of an aging population and a high level of affluence will lead to better healthcare. Infrastructure and construction is another and is driven by a number of factors. Most of the countries have had relatively poor infrastructure and will need to build on that. The infrastructure in China has gone ahead dramatically since 1996 but that’s not the case in the Philippines or Indonesia. In Thailand, it’s better but still not great, especially outside of the big cities. Another major driver is urbanization. Most of these places still have a high degree of rural populations, and these people are going to migrate into the urban areas where demand for infrastructure will continue to rise.
biz.hk: What are your thoughts on the future of the market research industry?
Snell: The research industry is going to face a very hard time because information is becoming readily available. You’re going to be able to collect data passively without having to ask questions in a survey so much anymore. You’ll be able to collect a lot of data, and it’ll come down to computing power. The tools to collect and process data are becoming ever more sophisticated.
There will still be a space for customized survey work where you have to go out and ask people specific questions, but I think the industry is going to consolidate more. If you look at the turnovers of all the major research companies over the last five years, it’s been either static or in decline.
For us in the B2B sphere, I think the future is still pretty bright because other than the top-tier companies, we haven’t penetrated down into the smaller medium-sized enterprises. I’m still very optimistic. I’ve been running this business for about 10 years and we’ve had continuous growth. We have a pretty comprehensive coverage in Asia with 14 of our 20 global offices. We’re entering the market in Sub-Saharan Africa at the moment as we see it to be the next Asia.
In Sub-Saharan Africa, it’s an emerging market with very low levels of sophistication in the industries there, both the ones our clients are in and the one we’re in. We’ve got three offices now in Sub-Saharan Africa and we’ve got an office in the Middle East. The other place where I think we could do a lot of business in the next few years is Iran – big country, 80 million people, relatively sophisticated, biggest oil reserves on Earth, wealthy, sanctions coming off because they want to be engaged with the rest of the world.