Elevating Engagement: The Loyalty Landscape in Asia Pacific

August 2023

Asia Pacific is a region characterised by diverse economies, cultures and demographics. In such an environment, loyalty programmes need to be crafted to meet local consumers’ preferences. Asia Pacific is facing a turning point where it can no longer rely on volume-based growth. Added value and building brand advocates is becoming more important than ever. It is expected that reforming loyalty programmes will support retention in a region facing an economic slowdown.

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This report comes in PPT.

Key findings

APAC – a highly digitalised region

Leading markets in APAC are increasingly digitalised, with so-called “superapps” being deeply embedded. This connected environment offers both opportunities and challenges for loyalty programmes, as it offers more ways to communicate and engage with consumers, while at the same time increasing competition, with consumers having access to new brands, offers and initiatives.

Loyalty programmes must continue to embrace existing communication channels

Consumers in APAC have historically valued word-of-mouth, relying on recommendations from friends and families, and this remains influential in terms of shopping information sources. With the digitalised environment, social media and KOLs are also impacting purchase decisions, especially for younger consumers. With various communication channels already existing, loyalty programmes should utilise these channels to ensure maximum impact.

Getting loyalty unstuck

Transactional loyalty is well-established in APAC, thanks to loyalty ecosystems; however, consumers often join more than one transactional loyalty programme, and unredeemed points and rewards are costly for businesses. Creating emotional loyalty can help in getting loyalty unstuck through more authentic one-to-one relationships with customers.

Find the right balance and blend of standardised and local features

Asia is a diverse region, and one size typically does not fit all. While standardised loyalty programmes are efficient and have consistency , it is also important to introduce a local touch, where loyalty programmes offer unique features depending on local market needs. Finding the right balance could lead to a winning position in the region.

Key findings
APAC is a diverse region in terms of economics and demographics
Economic slowdown require companies to restrategise customer engagement
Digitalisation in APAC is accelerating, with superapps embedded in consumers’ lives
Enhanced digital connectivity does not guarantee deeper consumer engagement
Retailing landscape impacts consumers’ engagement levels with a brand
Earning points and being “loyal” have different meanings for consumers in APAC
Embracing diverse communication channels to drive efficient loyalty programmes
Measuring the impact of loyalty: Sizing loyalty contribution within a market
Loyalty contribution level differs by industry and by market
Understanding the loyalty contribution
Transactional rewards are a prerequisite given the economic headwinds
Strong foundation of transactional rewards: Introducing loyalty ecosystems
Examples of loyalty ecosystems in APAC
Shinsegae Universe: expands its loyalty scheme to reach new customers
V Point: Japan's latest loyalty rewards alliance to be launched in early 2024
Point liability challenges return on investment for a pure transactional loyalty programme
Rakuten Point: Transactional loyalty ecosystem that embraces emotional loyalty strategies
Emotional loyalty is the whitespace in APAC customer loyalty
China’s Betterwood: Repositioning interaction through emphasis on brand experience
China’s Haidilao: Building emotional loyalty with the help of experiential rewards
Capitalise on social media apps to build emotional loyalty
China: Mobile-led loyalty facilitated by social media and superapps
Standardisation vs localisation: Current state
Challenges behind standardising a loyalty programme across markets
Inter IKEA Systems BV: Blending standardised features with diverse local specifics
DFS Group: DFS Circle offers unique global loyalty programme
7-11 and Lawson: Successful collaboration drives cross-border loyalty
The winning loyalty formula depends on the business objectives
Key summary

Consumer Finance

This is the aggregation of ATM, charge, credit, debit, e-purse and retail cards. Note that smart cards are not included in financial cards.

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