The BrandZ™ Report and What it Means for Chinese Companies
The BrandZ™ Top 30 Chinese Global Brand Builders report, released by Kantar Millward Brown in collaboration with Google, shows that Chinese brands are increasingly gaining acceptance and awareness in the global market and there is no better time than now for these companies to build a global brand.
According to David Roth, CEO of The Store WPP, “This is an opportune time for Chinese brands to reach new audiences by expanding abroad and competing with their global and local country market peers.”
The report ranks 30 Chinese companies based on their brand strength outside of China, and provides insights to building a global brand. The ranking is calculated by the Brand Power – a measurement done by BrandZ™ which identifies a consumer’s predisposition to choose a particular brand- of Chinese brands outside of China across seven countries.
Chinese brands, which were previously known for being cheap and low quality, are today striving to rebrand themselves in order to become more competitive in global markets. This transition of the “Made In China” perception is especially apparent in the technology industry amongst smartphone, home electronic, and drone companies.
Overseas, the strength of these consumer electronics brands are growing, as is indicated by the Top 30 Chinese Global Brand Builders report, which names 3 technology companies in its top 5 list: Lenovo, Huawei, and Xiaomi.
China’s mobile gaming brands have also gained respect in international markets, and are dominating the ranking. According to the report, there are 8 companies with strong global brands.
Although opportunities are growing for Chinese brands, David also indicated that there are still many challenges facing Chinese companies. “Chinese brands are still relatively unknown outside of China, and building awareness, especially in developed markets, requires market insight and communications expertise.”
For instance, as shown in the diagram below, awareness of non-Chinese brands is 60%, and 27% of consumers considered purchasing these brands. Amongst Chinese brands, only 14% of consumers are aware of these brands, and only 8% considered purchasing them.
Positive brand recognition is one of the deciding factors for foreign consumers when deciding to purchase a modern good or service. Some companies struggle to be seen as a quality producer of goods because the market has not yet identified them as such. For global consumers, there is still negative perception around products that can be identified as Chinese. The Chinese brand name needs to be able to communicate to its customer with sincerity and genuineness, but also back up the sincerity with quality and affordability, so that it will resonate with the customers in diverse parts of the world.
For Chinese brands who are interested in expanding internationally, there are many important factors to consider. In fact, in order to successfully ‘go global’, 4 out of the top 5 Chinese global companies and 50% of the brands listed in the report have used CSOFT’s international services. When partnering with these companies, CSOFT uses its cultural and linguistic expertise to overcome the barriers and pre-conceptions that often meet Chinese brands in international markets. By analyzing local markets and implementing a strong, country specific communication strategy, CSOFT is able to assist companies in rebuilding the “Made In China” perception.