Chinese brands are using a focus on innovation and brand building to improve consumer perceptions in the West and build global brands.
A report by Kantar Millward Brown, WPP and Google finds that Lenovo is the best Chinese brand at building global brand awareness. The analysis gives Lenovo a ‘brand power’ score of 1,697, ahead of Huawei on 1,530 and Alibaba on 1,101.
The research differs to the BrandZ brand value rankings because it judges the strength of a brand from the perspective of overseas consumers in markets including France, Germany, Spain, the UK, the US, Australia and Japan. It uses BrandZ data, as well as Google search volumes and Google Surveys, to determine brand equity.
The methodology means that just because a brand scores well in BrandZ’s annual rankings, does not mean it scores as well in terms of global brand building. Tencent, for example, is the top Chinese brand in BrandZ’s brand value list but comes just 31st out of 50 in terms of brand power with a score of 219.
Consumer electronics is by far the best performing category, with the brand power ranking dominated by brands including Lenovo and Huawei, as well as Xiaomi and Anker. Overall, there are 10 consumer electronics brands in the top 50 and they contribute 34% of the total brand power score. If all the tech industries, including ecommerce and mobile gaming, are taken together they account for 61% of the brands that make up the top 50.
Speaking to Marketing Week Elspeth Cheung, global BrandZ valuation director at Kantar Millward Brown, points to China’s tech manufacturing history as a key reason for this.
“Before it used to be that consumer electronics were ‘made in China’ and China was seen as the world factory, full of suppliers and manufacturers. But now China is showing it has the knowhow to build global brands as well,” she explains.
Chinese brands perform particularly well in terms of being ‘meaningful’, according to Cheung, by meeting functional and emotional needs in relevant ways. The majority are well adept at satisfying functional needs in particular through tech innovation.
However, she says they fall down in terms of salience – coming easily to mind in a buying situation.
“In terms of communication, Chinese brands need to invest to build awareness among global consumers,” she explains.
Some brands are starting down this route. Alibaba, for example, has just launched its first global marketing campaign as part of its Olympics sponsorship talking to both the emotional and functional aspects of its brand strategy to connect small merchants with buyers.
However, the report shows Chinese brands need to invest more in brand building, driving up awareness and improving perceptions of quality and therefore trust.
“There is still work to do if they want to be perceived as truly global,” she concludes.