Loyalty and Incentive Programs:

Winning Building Material

Industry in Asia through
Strategic Partnership
 Table of Contents

Part 1:

UNDERSTANDING THE ASIAN BUILDING MATERIAL MARKET 2-9

Trends and Growth Drivers in the Asian Building Materials Sector 5-6
Building Material Industry Challenges in Asia 7-8
Strategies for Winning the Building Material Market in Asia 9

Part 2:

MANAGING SUPPLY CHAIN COMPLEXITIES IN ASIA FOR BUILDING

MATERIAL INDUSTRY 10-14

Exploring Dynamic Purchasing Channels for Contractors and

Builders 12
Building Material Industry in Indonesia 13-14

Part 3:

THE WINNING FORMULA: STRATEGIC PARTNERSHIPS AND

A COMPREHENSIVE DISTRIBUTION NETWORK FOR MARKET
SUCCESS 16-22

Understanding the Asian Distribution Network Landscape 16

The Power of Incentivization 17
Strategies for Incentivizing Channel Partners in Building
Material Industry 19
Success Stories from The Market: Discovering Industry's Leading
Loyalty and Incentive Programs 20-22

ENDNOTES 23-24
About Tada 24

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Part 1:
Understanding the Asian
Building Materials Market

Loyalty and Incentive Programs

 Part 1: Understanding the Asian Building Materials Market

The building materials industry in Asia has been experiencing significant growth
and transformation in recent years. As the region undergoes rapid urbanization
and economic development, the demand for quality housing, commercial spaces
and infrastructure projects has surged. The building materials industry plays a crucial
role in meeting this demand by supplying a wide range of materials needed for
construction projects.

According to a report by Grand View Research, the market size of the Asian
construction materials industry was valued at USD 1.9 trillion in 2019. The market is
projected to witness a compound annual growth rate (CAGR) of around 6% from 2020
to 2027.

MARKET VALUE OF THE ASIA-PASIFIC

CONSTRUCTION MATERIAL MARKET (2017 - 2021, $ BILLION)

900 862,8
754,4 758,5
708,7
679,2
633,7
600

300

2016 2017 2018 2019 2020 2021

Source: GlobalData

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 Part 1: Understanding the Asian Building Materials Market

The building materials industry in Asia as a whole is characterized by a dynamic and

highly contested landscape. With the region witnessing rapid economic growth and
urbanization, there is a strong drive among both domestic & international companies
to establish their presence and capture a significant market share.

The size of the global construction materials market reached USD 1.3 trillion
in 2022, and it is projected to reach approximately USD 3.52 trillion by 2032.
The market is expected to grow at a compound annual growth rate (CAGR) of
10.97% from 2023 to 2032.

GLOBAL CONSTRUCTION MATERIALS MARKET SIZE,

2023 TO 2032 (USD TRILLION)

3.6 $ 3.52

3.2 $ 3.06

2.8 $ 2.68
$ 2.37
2.4
$ 2.12
$ 1.91
2
$ 1.73
$ 1.47 $ 1.59
1.6 $ 1.38
$ 1.3
1.2

0.8

0.4

0
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Source: www.precedenceresearch.com

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 Part 1: Understanding the Asian Building Materials Market

Trends and Growth Drivers in the Asian

Building Materials Sector

The Asian building materials sector is a dynamic and rapidly evolving market, driven
by a multitude of factors that influence the industry's development and expansion.
Here are some key trends and drivers contributing to the growth of the sector in Asia:

1. Urbanization, Population Growth, and the Rise of

the Middle Class

The rapid pace of urbanization, population growth, and the

emergence of a middle-class population in Asia have fueled the
demand for housing, commercial spaces, and infrastructure.
This unprecedented growth requires a massive supply of
building materials to meet the construction needs.

As more people migrate to urban areas, the demand for affordable

housing & sustainable infrastructure rises, driving the building materials
market. Additionally, the rising middle class seeks improved living
standards, leading to increased investment in residential & commercial
real estate projects.

2. Technological Advancements
The building materials sector in Asia is witnessing technological
advancements that enhance construction efficiency and sustainability.
This includes the adoption of digital technologies, prefabrication,
modular construction techniques, and advanced manufacturing
processes.

These advancements improve construction speed, quality, and

cost-effectiveness, driving the demand for innovative building
materials.

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 Part 1: Understanding the Asian Building Materials Market

3. Sustainable and Green Building Practices

As environmental concerns gain prominence, there is a growing emphasis
on sustainable and green building practices in Asia. This includes the use of
eco-friendly materials, energy-efficient designs, and renewable energy
sources. The demand for environmentally responsible building materials,
such as recycled products, sustainable timber, and energy-efficient
systems, is driving innovation and growth in the sector.

The South East Asia and Australia

green building materials market size
was valued at

$16.8 billion in 2021

Projected to reach

$43.3 billion by 2031

Growing at a CAGR of

9.9% from 2022 to 2031

Source: Allied Market Research

4. International Trade and Investment

Asia serves as a global hub for trade & investment, attracting multinational
construction companies & building material manufacturers. The presence
of international players stimulates competition, encourages technology
transfer, and facilitates the exchange of best practices, contributing to the
growth of the sector.

5. Government Initiatives and Investments

Many governments in Asia have recognized the importance of infrastructure
development for economic growth and are actively investing in
large-scale projects.

Government initiatives, such as smart cities, affordable housing

schemes, and infrastructure upgrades, generate substantial
demand for building materials. Supportive policies, incentives, and
regulations also influence the growth of the sector.

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 Part 1: Understanding the Asian Building Materials Market

Building Material Industry Challenges

in Asia
The building material industry in Asia faces a multitude of substantial challenges
that have a profound impact on its growth and overall operations. These challenges
arise from a combination of factors that vary across different countries and regions
within Asia.

1. Market Fragmentation Companies struggle with transpor-

tation, warehousing, and inventory
The building material industry in Asia is
management to ensure timely
characterized by a fragmented market
delivery and optimize costs.
with diverse customer preferences
and regulatory requirements.
4. Price Sensitivity
Companies often struggle to
develop a comprehensive market Price sensitivity is a significant
strategy that addresses the unique challenge in the Asian market, as
needs of each country or region. customers often prioritize afford-
ability over brand loyalty.
2. Intense Competition
Companies face pressure to offer
Asia's building material industry is competitive pricing while main-
highly competitive, with numerous taining quality standards and
local and international players vying profitability.
for market share.

Companies face challenges in 5. Regulatory Compliance

differentiating themselves
competitors and establishing a
strong brand presence.
from
Each country in Asia has its own set
of regulations and standards for
building materials.

3. Supply Chain Complexities Companies find it challenging to

navigate complex regulatory
Managing the supply chain in Asia frameworks, obtain necessary
can be complex, given the vast certifications, & ensure compliance
geographical spread and diverse across different markets.
logistics infrastructure.

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 Part 1: Understanding the Asian Building Materials Market

6. Counterfeit Products
Counterfeit building materials pose a significant challenge in Asia, affecting both
brand reputation and customer safety.

Companies struggle to combat the proliferation of counterfeit products and

establish effective brand protection measures.

Fake Construction Materials Pose Life-Threatening Risks

84% $1 Trillion / year

of counterfeit products affect cost of counterfeit goods
the construction industry in construction

Source: Construction Industry Institute

7. Technological Advancements
Keeping up with technological advancements and integrating digital solutions into
business processes can be a struggle for some building material companies in
Asia.

The adoption of digital tools for marketing, supply chain management, and
customer engagement requires investment and organizational readiness.

8. Sustainability and Environmental Concerns

Increasing environmental regulations and customer demand for sustainable
products pose challenges for building material companies in Asia.

Companies need to develop eco-friendly solutions, adopt sustainable

practices, and manage waste and resource utilization effectively.

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 Part 1: Understanding the Asian Building Materials Market

Strategies for Winning the Building

Material Market in Asia
To achieve success in the highly competitive Asian building material industry,
companies can strategically implement the following key strategies, enabling
them to gain a competitive edge, capture market share, and emerge as leaders
in the industry.

Market Research and Segmentation Strategic Partnerships & Distribution

Conduct comprehensive market research
to understand customer preferences,
market trends, and competitive land-
scape. Segment the market based on
demographics, preferences, & regional
differences to tailor products and
marketing strategies accordingly.
Network
Build strategic partnerships with distributors,
retailers, and contractors to enhance
market reach and distribution capabilities.
Establish a robust and reliable distribution
network that ensures timely availability of
products and excellent customer service.

Customer-Centric Approach Brand Building and Positioning

Prioritize customer satisfaction by providing
exceptional customer service, prompt
support, and product education. Listen to
customer feedback, adapt to their evolving
needs, and continuously improve product
offerings and services based on customer
insights.
Build a strong brand presence by devel-
oping a compelling brand identity and
positioning. Communicate the brand's
unique value proposition, quality, and reli-
ability to target customers through effec-
tive marketing campaigns and consistent
messaging.

Digital Marketing and E-commerce Product Innovation & Differentiation

Embrace digital marketing strategies,
including social media marketing, search
engine optimization, and online advertising,
to reach and engage customers in the
digital age. Leverage e-commerce platforms
to expand market reach and provide
convenient purchasing options.
Invest in research and development to
innovate and differentiate products from
competitors. Develop solutions that meet
specific market needs, offer unique
features, & provide superior performance,
durability, and sustainability.

Continuous Improvement & Adaptability

Foster a culture of continuous improvement and adaptability to respond to changing
market dynamics. Stay updated with industry trends, technological advancements, and
regulatory changes, and be agile in adjusting strategies and operations accordingly.

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Part 2:
Managing Supply Chain
Complexities in Asia for Building
Material Industry

Loyalty and Incentive Programs

 Part 2: Managing Supply Chain Complexities in Asia for Building Material Industry

Building material companies heavily rely on intermediaries within the supply chain to
distribute their products to contractors, builders, and even end customers embarking
on DIY building projects. Despite being one of the oldest & well-established industries
in the region, the building material sector has been traditionally cautious when it
comes to embracing digitization and innovative technologies.

The hesitation within the building and construction industry to fully embrace digital
innovation can be attributed, in part, to a perceived absence of a direct connection
between digitization and tangible improvements in customer experiences or the
acquisition of new customers. This skepticism has created a barrier that raises
important questions about the potential impact and value of pursuing digital
transformation.

But with the generational shift happening, it becomes imperative for building material
companies to acknowledge the importance of developing an online strategy to adapt
to the future landscape. Especially with mobile and smartphone penetration rates
surge, increasing inclination towards online purchasing will be significant in the near
future.

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 Part 2: Managing Supply Chain Complexities in Asia for Building Material Industry

Exploring Dynamic Purchasing Channels

for Contractors and Builders

Asia, with its multitude of countries and numerous mega construction projects,
presents a thriving landscape for diverse building material companies that provide
a wide range of products to support these ambitious ventures.

Among these countries, Indonesia stands out as an emerging market in the

building & material industry. The nation is experiencing a surge in infrastructure
projects initiated by the government, as well as ongoing housing, apartment, and
building projects across the archipelago. Consequently, capturing the Indonesian
market can yield substantial advantages for building material companies
seeking to establish a foothold in this dynamic industry.

The Indonesia Construction Market Size in Number

It is estimated at USD 264.34 billion in 2023,

reflecting substantial growth potential

The market is expected to reach USD 379.41 billion by 2028,

growing at a CAGR of 7.50% during the forecast period

(2023-2028)

Source: Mordor Intelligence

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 Part 2: Managing Supply Chain Complexities in Asia for Building Material Industry

Common purchasing channels for

contractors and builders in Indonesia
By understanding the various channels available for procuring construction
materials in SEA, industry players can navigate the market effectively and
choose the most suitable options for their specific needs and preferences.

Independent hardware stores

01
These small-scale mom-and-pop shops offer a wide range of products, making
them a convenient choice for small homebuilders and individual contractors.
These stores are easily accessible, often provide credit to repeat customers, and
serve as a one-stop-shop for various materials.

Specialist trade suppliers

02
These suppliers focus on specific product categories, such as cement, doors,
windows, electrical, plumbing, or lighting. Specialist contractors prefer these
suppliers due to their deep technical knowledge and specialized product offerings.

Hardware chains

03
Similar to independent hardware stores, hardware chains offer a diverse range of
products but benefit from having multiple locations. They often have a more
advanced distribution system across their stores, providing greater convenience
to customers.

Manufacturer-owned retail outlets

04
Manufacturers operate brick-and-mortar stores that showcase and sell their own
products. These outlets are consumer-oriented and are commonly found in
categories like sanitaryware and kitchens.

Direct procurement from manufacturers

05
Larger construction companies with established contractual relationships prefer
to procure materials directly from manufacturers. This allows for a more stream-
lined and efficient supply chain.

Online platforms

06
Third-party or manufacturer-owned online platforms offer a convenient way to
purchase construction materials. While smaller-scale purchases are common,
larger-scale procurement options are also available. Well-known examples of
third-party hosted platforms include Tokopedia and Shopee.

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 Part 2: Managing Supply Chain Complexities in Asia for Building Material Industry

Preferred channel for purchasing building material products

34%

21% 20%

15%

8%

2%

Independent Hardware Direct from Specialist Manufacturer- Online

hardware stores chains manufacturer trade suppliers owned retail platform
outlets
Source: L.E.K SEA Contractor Survey 2019

Key channel selection criteria score for Indonesian builders

3,4 3,4
3,3 3,3 3,3

2,9 2,9
2,8 2,8
Contractor service and advice
Delivery speed & guarantee

Multiple product categories

Broad product range

Convenient location

Showroom facilities
Immediate delivery

Payment terms
Prices

Source: L.E.K SEA Contractor Survey 2019

Predicted shifts in buying patterns

Online purchases of building material are almost non-existent in Indonesia at the
moment. This can be attributed to both the deep-rooted nature of traditional
business practices and limited availability of trustworthy online alternatives.

While the current buying patterns predominantly favor traditional channels, it

is important to recognize the emerging opportunities presented by the
next-generation workforce and a maturing population.

With a growing digital-savvy demographic, there is significant potential to

explore and pursue digital channels for the procurement of building materials. By
embracing digital transformation and providing trustworthy online platforms, the
industry can tap into this evolving behavior and leverage the advantages offered
by digital commerce.

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13
Part 3:
The Winning Formula: Strategic
Partnerships & a Comprehensive
Distribution Network for
Market Success

Loyalty and Incentive Programs

 Part 3: The Winning Formula: Strategic Partnerships & a Comprehensive Distribution...

Understanding the Asian Distribution

Network Landscape

Asia is a region known for its vast consumer markets and diverse supply chains.
When it comes to distribution networks, it often consists of multiple intermediaries,
such as distributors, retailers, hardware store owners, contractors, builders and
many more.

These intermediaries play a critical role in bridging the gap between manufacturers
and end consumers, ensuring products reach their intended target markets
effectively. However, the complex nature of the Asian distribution network poses
challenges in maintaining brand loyalty and maximizing sales potential.

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 Part 3: The Winning Formula: Strategic Partnerships & a Comprehensive Distribution...

The Power of Incentivization

To overcome the challenges posed by a multi-tier distribution network, businesses
must recognize the importance of incentivizing intermediaries. Incentives act as
powerful motivators, encouraging intermediaries to remain loyal to your brand and
actively promote your products.

By aligning their interests with yours, you can create a win-win situation that drives
sales growth and expands your market share.

Here are some key advantages of offering incentives to channel partners in the
building material industry:

1. Increased Sales
Incentives boost sales performance, motivating partners to actively promote
and sell building materials, resulting in higher sales volumes and revenue.

2. Market Expansion
Incentives drive market presence by encouraging partners to reach new
customer segments and unexplored markets, expanding the customer base
and market share.

3. Brand Loyalty
Incentives foster loyalty by providing exclusive deals, product lines, and
marketing support, ensuring partners prioritize the company's brand for
sustained long-term partnerships.

4. Improved Brand Visibility

Incentives empower partners to actively promote the company's building
materials, generating greater brand exposure, wider audience reach, and
increased brand recognition.

5. Enhanced Product Knowledge

Incentives including training programs improve partners' product knowledge,
enabling effective communication of features, benefits, and value to
customers, leading to better experiences and higher conversions.

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 Part 3: The Winning Formula: Strategic Partnerships & a Comprehensive Distribution...

6. Competitive Advantage
Incentives attract and retain top-performing partners, giving companies a
competitive edge, strengthening the distribution network, and securing a
larger market share.

7. Long-Term Partnerships
Incentivization builds strong partnerships based on trust and mutual benefit,
ensuring stability, consistent sales performance, and a foundation for future
growth.

8. Feedback and Insights

Incentives encourage open communication, valuable insights, market
feedback, and suggestions for improvement, enabling companies to refine
products, optimize distribution, and adapt to changing market needs.

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 Part 3: The Winning Formula: Strategic Partnerships & a Comprehensive Distribution...

Strategies for Incentivizing Channel Partners

in Building Material Industry
A well-designed incentive program can unlock the full potential of the channel
partners and gain a competitive edge in the market.

Here are some effective approaches to consider:

1. Competitive Margins 4. Training and Support
Offering attractive profit margins Investing in training programs and
to intermediaries ensures they are providing support to intermediaries
adequately compensated for their can enhance their product knowledge
efforts. By providing a margin that and sales capabilities. This empowers
surpasses the competition, you them to effectively communicate the
incentivize intermediaries to prioritize value of your products, leading to
your brand over others. increased customer trust and loyalty.

2. Exclusive Deals & Promotions 5. Recognition and Rewards

Offering exclusive deals, discounts, or
promotional campaigns for intermedi-
aries can generate excitement and
motivate them to push your products
more aggressively. This not only boosts
sales but also strengthens their loyalty
to your brand.
Recognizing the top-performing inter-
mediaries through reward programs
can foster healthy competition and
motivate others to strive for excellence.
Incentives such as performance bo-
nuses, trips, or special recognition can
go a long way in building strong part-
nerships.

3. Collaborative Marketing Efforts

Engaging intermediaries in joint marketing initiatives helps create a sense of shared
responsibility and commitment. By collaborating on marketing campaigns, you can
amplify your brand's reach and visibility, benefiting both parties involved.

IMPORTANT

INFO

Remember, choosing the right program requires careful consideration and a

tailored approach. So, take the time to analyze your needs, consult with industry
experts if needed, and design a channel incentive program that aligns with your
business goals and engages your channel partners effectively.

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 Part 3: The Winning Formula: Strategic Partnerships & a Comprehensive Distribution...

Success Stories from The Market: Discovering

Industry's Leading Loyalty and Incentive Programs

Within the dynamic building material industry of Asia, companies are consistently in
search of avenues to elevate sales and expand their market influence. A powerful
approach that proves effective in this pursuit is the integration of channel incentive
programs, designed to inspire and incentivize their distribution channel partners. By
employing such programs, companies can foster collaborative relationships, driving
mutual growth and prosperity in the industry.

These companies have used Tada's game-changing solutions to understand the

needs and preferences of their channel partners and design a program that drives
performance and achieves desired results.

Let’s take a look at how Tada changed the game for these companies.

Investing in trade loyalty isn’t just about

increasing revenue - it’s also about
creating a meaningful relationship
between you and your trade partners.

By offering incentives and rewards

program, you can create a loyalty
program that will cultivate loyalty
amongst your trade partners.
---
Rebecca Agiestha
Co-founder of Tada,
leading loyalty and rewards platform in SEA

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 Endnotes

Endnotes

Channel incentives can be a game-changer for any business looking to activate and
engage its channel partners. These incentives can drive volume, build market share,
educate partners, and tap into existing customer relationships.

At Tada, we believe that adopting and perfecting your own channel incentive
program is crucial for business success.

Our game-changing solution can help you set up and run your own program quickly
and seamlessly, providing your business with the benefits and features necessary to
sustain growth in today's competitive market. Start activating, nurturing, and reward-
ing your channel partners and sustain your business today!

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 Endnotes

About Tada

Tada is a leading loyalty and rewards platform in Southeast Asia that enables
businesses to efficiently improve channel partner, customer and employee retention,
build loyalty and drive growth. Our unified and game-changing solutions create an
engaging and rewarding ecosystem with a seamless experience for all.

Founded in 2012, recognizing the importance of digital transformation and disruption

in the market. We noticed how businesses began to face challenges in developing
and managing effective loyalty & rewards programs. That's why we built Tada; to help
smart business leaders build more profitable relationships with their channel partners,
customers and employees.

As a home-grown Indonesian Software as a Service (SaaS) company, Tada has a

global footprint, serving over 200 local and global brands with excellence. Our
international recognition and awards demonstrate our commitment to helping smart
business leaders build profitable relationships through loyalty & incentive initiatives.

Trusted by:

Contact us:

usetada.com Tada usetada

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