Study names top brands in China
Updated: 2013-08-09 12:15
By Zhang Yuwei (China Daily)
For many foreign brands, China is not only a place to be. It's also a market that can provide success for their business. In other words, every global company wants a China story - and a successful one.
In exclusive research done for the British Broadcasting Corporation, global research firm Millward Brown has identified the 20 most powerful foreign brands in China.
The research presents findings from a survey based on nearly 60,000 interviews - either face-to-face or online - conducted in 10 Chinese cities between 2011 and 2013.
Millward Brown put forward criteria such as how "meaningful", "different" or "salient" these foreign brands were and how easily they connected to Chinese consumers.
Thirteen of the 20 brands are from the US and eight companies on the top 10 list are American. Apart from only one Asian brand - South Korea's Samsung - all the rest are European.
Winners on the top five list are all US brands: KFC (Yum Brands), Pampers (P&G), Colgate (Colgate Palmolive), Olay (P&G) and Crest (P&G).
Oscar Yuan, vice-president of Millward Brown Optimor in New York, said international brands in general present "many things" to Chinese consumers, with "trust" being an important factor.
"In the last three years the brand trust for Chinese brands has eroded as scandals and quality issues have impacted some Chinese products," said Yuan.
"International brands are a symbol of prestige and good taste, appealing to the rapidly growing middle class in China," he added.
International brands often bring unique points of view to specific categories, the way that, for example, Apple - which ranks No 6 on among the top 20 - has brought design and beauty to electronics, noted Yuan.
The BBC interviewed about half of the companies presenting the 20 brands - including Coca-Cola, KFC, Nike, L'Oreal, Apple, and Samsung - about their secrets for success in the Chinese market and received some insightful tips.
Answers are simple and straightforward. "Get in early; understand your market, be bold, set a strategy and build your team."
However wise, these strategies aren't possible without the growing middle class that has been the target consumer group of many well-established multinationals - including those that came to China even before the 2000s - and newcomers.
China's middle class is expected to triple to 630 million by 2022, an increase from 230 million in 2012, according to a recent study by the China-United States Exchange Foundation.
"For the Chinese consumer, the desire for quality and experience results in an environment ripe for international brands to make inroads with the 1.3 billion Chinese consumers," said Yuan.
China's affluent shoppers have average annual earnings of between $19,500 and $90,000 and are expected to be the driver for the future growth of luxury markets, according to Exane BNP Paribas, an equity research firm.
"A strong middle-class is one of the most important elements to make an economy prosperous, a country safe and also people happier," said David Sadigh, founder and CEO of Digital Luxury Group, a luxury industry market intelligence firm in New York.
"China's booming middle class will become not only important for China's economy, but also will have a direct impact on many countries and industries," said Sadigh.
On innovation and building a team, many foreign companies are eyeing the rich talent pool in the world's second-largest economy. Hiring local talent and expanding local teams have been natural moves for many brands in China nowadays.
"It is a large, well-educated population, so it is not surprising that companies are looking for talent in the Chinese market," Yuan said.
"It also ensures that global companies develop a work force that reflects the consumers they are trying to reach and service. A diverse workforce can be very effective and efficient when building both global and local strategies - be it operations, marketing, innovation and so on," Yuan added.
Successful China stories of foreign brands are built through time and knowledge in this huge, competitive market. Of course, they don't come easy.
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(China Daily USA 08/09/2013 page10)