Asian Crisis Close to Reaching Bottom; India Seen as Lucrative MarketNEW YORK - The Asian economic crisis may be close to bottoming out as direct marketers in the region report slowly rising response rates to new mailings. India has become an especially attractive market.
"Business in Asia is picking up slowly," said James Thornton, the owner of MLA and several other mail-order businesses in the region. "The sense of crisis is gone. People don't think 'crisis' anymore.
"A lot of restructuring is going on. A credit card list that people used in Indonesia did well. You still get good results from good lists. The problem is list deterioration, which happens when list owners don't mail."
Thornton noted that mailers "are getting out and mailing again. They were shell-shocked for a year and then economic necessity kicked in."
Mailers are running into a high rate of undeliverable letters because lists haven't been cleaned and updated much since the crisis began. Response rates are becoming more acceptable, Thornton said, but recovery is uneven. Indonesia is still in the doldrums, but Thailand, where the current crisis began in the summer of 1997 with the devaluation of the baaht, seems to have bottomed out.
The Philippine peso, which also spent many months in a sustained downward spiral, has stabilized.
Japan may be mired in deep recession, but bright patches light the general economic gloom, enough so to attract more foreign investment, including European catalogers.
Many are moving into a void left by departing American mailers, who pulled out in droves in the wake of the economic downturn and a streaking dollar that at one point hit 140 yen before settling in the current 120 range.
A French company, AMP, has offered French catalogers help in penetrating the Japanese market, either through a joint venture or direct off-shore mailing.
In a joint venture, AMP will find a Japanese cataloger as partner that agrees to pay for translation of the French catalog into Japanese and offers the book to its clients. Goods are then shipped directly from France to the buyer.
In the case of a direct mailing, AMP will translate the order form and reach agreement with a large Japanese mail-order house to handle everything else. Initial test results have been encouraging, AMP reported.
But India is the biggest story, Thornton believes, and he is not alone. English-language publishers are doing a bang-up business in the subcontinent.
While the Indian government charges prohibitive duties of 50 to 60 percent on imports of manufactured goods, publications and other educational material can enter the market freely.
Indeed, no currency restrictions apply. Corporations can spend up to $5,000 a year buying magazines, books and other printed matter, while individuals have $100 free.
Time, Newsweek, The Economist and Business Week, to cite just a few, are finding India one of their hottest markets for selling dollar-denominated subscriptions. National Geographic plans a major Indian market entry.
Despite the nationalist BJP government, the detonation of a nuclear device last year, and considerable political instability, the Indian economy seems to be strengthening.
The stock market has shown solid gains in the wake of the new Indian budget, rising by 9 percent. Consumer spending seems to have bottomed out and experts predict growing outlays late this year and next.
The new confidence is reflected in Citibank's rapidly growing rewards program. "It is three time what we had budgeted and planned," said Abhijit Bhandari of Royal Images Direct, which runs the program in India.
While he would not reveal the number of mailings Citibank is dropping as part of the rewards program, he said "we are far ahead of projections and expectations."
The current mailings promote Citibank's Visa and MasterCard programs with rewards expanding from merchandise redeemed for points to free gasoline at the pump, a popular program given India's high gasoline prices.
Bhandari is also trying to build a list business in India based on the names in the Citibank files. But he concedes that getting lists is a problem. List owners are leery about letting them out of house, let alone renting them, fearing theft and other misuse.