13 February 2015
The growing importance of brands in China
We are all well aware of the rise of China on the world stage, its key role in the global economy and the importance of its manufacturing base. But less is said about Chinese brands and their value.
A new report has just been published entitled “BrandZ Top 100 Most Valuable Chinese Brands” which looks at this in detail. It is interesting to see that creativity and innovation are flourishing within these top rated companies. This firmly redresses the notion that Chinese firms are synonymous with copying Western designs and solutions and offer very little by way of new ideas and game-changing developments. Another development is that Chinese companies are becoming more vocal and are no longer content with manufacturing products for others, who then stamp on their own logo. Chinese firms are eager to develop their own brands in their own right. We are also not talking solely about state-owned enterprises here. The brand growth is coming from private enterprises.
How companies make an impact in China
This takes us to the question of how to build valuable brands in China. It is important to look at the drivers here, which will help our companies make their mark on the vast Chinese market. In short, this comes down to several key elements:
- Be aware of purchasing behavior. This links in with capturing emotions as well as offering facts and figures.
- Quality is increasingly more of a concern for Chinese consumers, particularly following recent high-profile scandals.
- More and more of the population is online, so it is essential to develop - and continually adapt - your digital presence in order to build your brand.
- With the pervasive jump to mobile, it is essential to engage and tell good stories to attract attention in a crowded marketplace. This need is amplified by the reality of small screens and the short attention spans of consumers.
- Policy changes will drive consumption, and lead to more empowered consumers. Brands need to be prepared for this, and consistent messaging and story across channels is key.
Expansion into European markets
By the same token, Chinese companies continue to look for new markets and Europe presents a multitude of opportunities. As we see the growth in Chinese brands, particularly in the technology, food & beverage and transport & energy sectors, cultivating their brands will be crucial to winning customers and market share across Europe. Chinese companies will need to be aware of local characteristics, while navigating local regulation and policy developments. Mapping key influencers, understanding the audience and telling a convincing, consistent story are all key to developing a brand which will cut through locally.
One thing for sure is that branding, and the importance of brands, will continue to grow for Chinese and foreign brands alike. As the Chinese proverb goes: “a bird does not sing because it has an answer. It sings because it has a song.” Having an answer - and a song – will be crucial for companies to succeed on the Chinese market today and well into the future.