BUSINESS12
VICTOR J. BLUE/BLOOMBERGBWTalks DirkVandePut
MondelēzInternationalCEOVandePut
runsa snacksempirethatrangesfrom
OreoandChipsAhoy!cookiestoCadbury
andTobleronechocolates.That’snota
badplacetobeduringa stay-at-home
pandemic.—CarolMassarandJasonKelly○Tostreamlinemanufacturing,Mondelēzisreducingitsnumberof
productsizesorflavorsby25%○Ithasbeverageexposurethrough
stakesincoffeemakerJDEPeet’sandKeurigDr.Pepper○Mondelēz
haspatentedanewprocesstomakechocolate,cuttingsugarby50%○ Interviewsareeditedforclarityandlength.ListentoBloombergBusinessweekWith
CarolMassarandJasonKelly, weekdaysfrom2 p.m.to6 p.m.ETonBloombergRadio.Thepandemichasleftmanypeople
stuckathome.How’sthatforbusiness?Weseeanincreasein
in-homesnacking.There’sa
pronouncedchangeofthe
consumereatinga lotmore
in theirhomesandlessin
restaurants,lessonthego.
Butgumorcandybought
in conveniencestoresis a
negativevs.previousyears.
Consumersalsowanta little
bitmorenormalcy—theywant
tofeelgood,safe.Sothey
snackmoreandgoa littlebit
moretocomfortfood.They
alsogobacktobrandsthey
knowandlove.Sowesee
thateffect,thatourmarket
sharein ourbigbrandsis
growingquitea bit.Withthepotentialofa secondwave,do
youstartstockpilingsomeingredients?Yes,we’repreparedfor
stockpilingingredients
becauseoursupplierscould
haveproblems,too.We
starttolookfortemporary
workersorincreaseour
workforcetomakesure
thatwecankeepoursupply
chaingoingandoursalesforce going. We reinforced all
the measures that we have in
our plants and in our offices,
but we also spend a lot of
time with our people talking
about how to behave outside
of our facilities to make sure
they stay safe and healthy.The conversation at many companies
has shifted toward diversity. How
important is that?If you have a diverse table
with different opinions,
different viewpoints, and
you’re really open to listen to
that, in the end you’re better
informed and you will make
better decisions. I think
the issue is more that you
tend to recruit or surround
yourself with people who
are the same as you. It feels
more comfortable, and it’s
not necessarily conscious
that that happens. So you
need to make sure that
you’re consciously making
decisions to get that
diversity. You need to be
more proactive, and I think
setting quotas or setting
targets is one of the ways
you drive that change. price—and regional know-how—would win them
customers while Netflix struggled.
In the years that followed, as Netflix sought to
expand in Southeast Asia, it ran into many of the
problems that the IFlix co-founders anticipated.
Netflix was considered too expensive for many
potential customers in the region, didn’t offer sub-
titles in many of the local languages, and wasn’t
producing a lot of original programs for the area.
Even so, IFlix failed to get much traction. In a
region where traditional pay-TV services cost next
to nothing and YouTube is ubiquitous, persuad-
ing people to pay for a streaming video service is
a challenge, even at a low price. IFlix’s acquisition
by Tencent “is not really a deal,” says Couto. “It’s a
distressed-asset sale.”
There are signs the market for streaming ser-
vices may be improving. Viu, owned by Hong Kong
telecom giant PCCW Ltd., has had success with a
hybrid model, offering some free programming on
an advertising-supported service but charging cus-
tomers who want a full range of shows and no ads.
Viu first gained a following by licensing shows
from South Korea, which are popular across all of
Asia. Subscriptions are growing 50% to 60% a year in
most of its markets and account for half the compa-
ny’s sales, according to Janice Lee, Viu’s chief execu-
tive officer. In Indonesia, people are spending more
time watching Viu than Netflix or IFlix.
Recently, Netflix has started to attract more
customers by selling cheaper, mobile-only plans
and by producing a greater amount of local con-
tent. It now has about 800,000 subscribers in the
Philippines, where it’s the clear market leader, and
close to 600,000 customers in Thailand, where it’s
second to Line TV, a local service. “Netflix has gone
to the races, particularly in the last six months,”
Couto says. “Consumption of Netflix in a lot of
these markets is through the roof.”
Chinese technology is already part of everyday
life in many Southeast Asian countries. Chinese
manufacturers dominate the smartphone market,
while TikTok, the short-form video app owned
by the Chinese company ByteDance Ltd., is ubiq-
uitous. But unlike TikTok, which relies solely on
user-generated programming, IQiyi and Tencent
Video offer catalogs of TV shows and movies. To
challenge Netflix and Disney, which provide huge
amounts of content from the U.S. and Europe, the
Chinese companies will likely need to invest heavily
in local programming and license top shows from
KoreaandChina.—LucasShawTHE BOTTOM LINE Streaming companies are expanding into
Southeast Asia. But most people in the region have an average
income of less than $10,000 a year, so pricing profitably is tough.