Balancing regional and local demands: Kimberly-Clark Asia-Pacific chief

Achal Agarwal, president of Kimberly-Clark Asia-Pacific, sums up his approach in six short words: “We go where the babies are.”

As simple as it seems, the plan appears to be working. Around 37 percent of Kimberly-Clark’s total sales comes from regions outside of North America and Europe, including APAC and Latin America, Middle East and Africa.

Diaper demand
According to a 2012 report, the global market for baby diapers will be worth US$52.2 billion by 2017, of which Asia-Pacific makes up 30 percent. Given the personal-care company’s marquee product – Huggies diapers, the abundance of babies in Asia-Pacific represents a huge opportunity.

“We may not see explosive growth in developed markets in our categories,” Agarwal says. “But in the emerging markets – ASEAN, China, India – we certainly see a lot of growth in the future. That’s our strategy.”

Opportunity and risk
But with bold growth projections comes challenges. In a diverse region such as Asia-Pacific, companies can succeed or fail based on how they respond to market specificities. Agarwal discusses Vietnam, where Kimberly-Clark’s manufacturing facility recently underwent expansion, as a country that represents both opportunity and risk.

“It’s a good example of a market that’s got its challenges in terms of capability and its stage of economic development, but we also see a huge amount of potential from it in the future – not only from a sales point of view, but from a manufacturing point of view.”

Empowering local leaders
The key to succeeding in Vietnam and other emerging markets, Agarwal believes, is Kimberly-Clark’s empowered local leadership model that gives country general managers more autonomy.

“We give the country MDs a lot of empowerment, and they run the entire P&L. Some companies flex more towards global; some more towards the region. Our model flexes more towards the country level.”

He sees the region’s role as adding value and offering insights rather than running the local businesses. In fact, Agarwal’s definition of success as a regional leader is “to come close to eliminating my job […] because it means I have a team that’s so capable that it doesn’t require me”.

But finding and retaining the talent required to create these capable local teams is a key issue for multinationals like Kimberly-Clark. A 2012 report by PricewaterhouseCoopers revealed the resignation rate in Asia-Pacific is more than double that of the United States.

According Agarwal, the local empowerment model works because it helps to attract and hold on to the right kind of people.

“I think it’s very attractive – not just for the leadership teams, but for the people who work in the country because they know they can do the things they need to do.”

Focus on digital
He also points to the growth of digital media and e-commerce as an important trend in the region – one that Kimberly-Clark is working hard to respond to. It means consumers interact with the company’s brands in different places, which is why the company is taking an omni-channel approach to marketing.

Omni-channel marketing is about providing a seamless experience for customers. Whether it is touching the brand online, in-store or through mobile, each piece of the experience is complementary rather than siloed.

Agarwal warns though, that a generic approach across Asia-Pacific doesn’t work.

“You can’t simply say in developed markets there is a lot of online buying and in emerging markets there isn’t.”

Agarwal cites Australia as a developed market where customers engage with the Huggies brand online but are more likely to buy offline, while Korea is a developed market where a lot of diaper purchases are made online.

Consumer-centricity
“It all contributes to an overarching strategy of responding to the needs of consumers in different markets”, says Agarwal. And this, he believes, compels Kimberly-Clark to be innovative when it comes to product development.

“In one country, mothers may be changing diapers frequently; in another country, less frequently. So we take that into account when we think about absorbency.

“Consumer-centricity is basic to our strategy, and in each country we have differences in terms of what the needs are. They may be big differences. They may be small differences. But we have found that it’s not one size fits all.”

Edited by Claire Slattery and Stanley Tang

This article first appeared on edb.gov.sg on 11 December 2014.

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