The CDP Institute—which researches the customer data platform (CDP) industry—has published its first State of the CDP Industry report for Asia-Pacific (APAC) in 2022, emphasizing the strong pace of growth in what is a uniquely structured market compared to the rest of the world.
The report, commissioned by Treasure Data, delves into the state of APAC’s rapidly growing CDP industry and identifies 25 APAC-based CDP vendors across eight countries at the end of 2021. The region consists primarily of delivery CDPs which account for almost half (48%) of total vendors – much higher than in other regions, where campaign CDPs rule supreme.
The January 2022 Industry Update Report can be downloaded from the CDP Institute website. A free CDP Institute membership is required to download the PDF report, but we’ve summarized some of the report’s most interesting findings below.
CDP Industry Primed for Growth
The last 18 months have provided enormous opportunities for CDP category growth in APAC. At the heart of this is the upheaval in consumer behavior witnessed globally, as consumers pivoted from visiting stores in person to making almost all purchases digitally. As a result spending across retail, entertainment and information products has seen a dramatic increase in online channels – making alignment between the offline and online customer experience more important than ever.
Avadhoot Revankar, Chief of Growth at Netcore, includes his thoughts within the report, and comments, “One of the biggest impacts of COVID has been on the big offline retailers who have been pushed into building an online shop. Now that things are opening up, the customer is demanding an omnichannel experience where things work seamlessly between the offline and online store.”
Demand for Personalization Rising
Across the board, major CDP vendors are experiencing significant growth in interest. For many organizations, it is becoming clear that increased online activity has raised a new set of challenges, leading businesses to question how equipped they are to meet these demands.
Nick Dennis, Solutions Consulting APJ at Tealium, comments that for organizations,“cracks in their ability to serve personalized, real-time customer experiences have led to them exploring how a CDP can resolve these challenges and enable them to meet rising customer demand”.
This is a gap CDPs are primed to fill, and the industry has seen both legitimate interest and curiosity rising as enterprise businesses discover this problem in their midst. With a rise in data and privacy regulations, many companies recognise the value in working with a CDP to ensure they are adequately equipped to leverage customer data effectively once tighter data privacy regulations are implemented.
But CDP Literacy Preventing Widespread Adoption
At its simplest, the definition of a CDP is still muddled and there are varying levels of understanding among organizations in APAC, the report reveals. Businesses report confusion around whether they already have a CDP, as there is a common misconception that other marketing platforms can cover all of a CDPs vital functions.
Even for those aware of what a CDP is, many are often not clear on the different types of CDP on the market and their varying functionality, impacting the effectiveness of buying decisions.
An Organizational Dilemma: Build or Buy
Some organizations have opted to attempt to build their own CDPs as opposed to enlist the help of one. They have collected data from a range of sources and applied data science principles in order to gather insights and procure suggestions. One struggle they are facing is how to then embed these insights within their current applications and processes, alongside making these insights readily available to their business users.
While early adopters of CDPs are now making way for mainstream users who are more demanding of a CDPs core capabilities. Aditya Bhamidipaty, Founder and CEO of FirstHive, agrees, “BI teams are now being involved in the entire CDP purchase decision-making process. As a result, there are more evolved use cases in multiple sectors.”
The Road Ahead for the CDP Industry
Since 2016 the number of new entrants has increased by 700 per cent – for MarTech buyers, this means an abundance of vendor choice. This is before you account for the increase in hybrid solutions now on the market which combine CDP services with others in the MarTech stack, muddying the water around which CDP vendor is fit for purpose for brands.
If CDPs are to successfully enter into a mainstream adoption phase, it’s crucial that vendors ensure clarity around functions for buyers, alongside providing transparency and control for consumers. As the uniquely structured market in APAC continues to grow at pace, marketers are waking up to the benefits of a CDP in not just meeting rising consumer demand for seamlessly integrated services, but also evolving regulatory needs.