Part 2 | Thought Leadership TOP 100 Most Valuable Chinese Brands <strong>2015</strong> THOUGHT LEADERSHIP | Chinese Dream CHINESE BRAND BUILDING CHARACTERISTICS In this contemporary context, <strong>China</strong> is open for building valuable brands. And brand building in <strong>China</strong> is influenced both by western practices and the characteristics of Chinese business operations and management. (See the WPP book, The Thoughts of Chairmen Now, www. thethoughtsofchairmennow.com) Managing on the run Chinese companies adapt rapidly and take risks. Their flexibility may be shaped in part by a worldview. The western conception of time is linear. The world begins with creation. In eastern thought time moves circularly without beginning or end. Chinese companies look at year-on-year growth with an underlying sense of pragmatism, a willingness to take risks to find approaches that work. Brand extensions and other market adaptation can happen swiftly. Entrepreneurial and collaborative In the conventional wisdom, Chinese companies are labyrinths of holding companies and subsidiaries where complication and bureaucracy impede action. The important counterpoint to this perception is that <strong>China</strong> is fundamentally entrepreneurial, a nation of family businesses. The collaboration necessary for brand building happens more organically in <strong>China</strong> than in the hierarchical and siloed organizational structures that have characterized western businesses. Connecting with consumers Chinese brands often originate and develop in lower tier markets before expanding to major cities. In contrast, multinational brands typically first establish in Beijing, Shanghai or Guangzhou before venturing more deeply into <strong>China</strong>. Therefore, Chinese brands are more likely to spend their formative years serving customers who are more concerned with product efficacy than image. Chinese brands understand how to meet the aspirations of this large group of consumers. At the same time, Chinese brands remain less adept at building emotional connections with customers. BRANDS AND SOCIETY Even more fundamental than the brand building practices of Chinese brands, the definition of brand success differs somewhat in <strong>China</strong>. Like western brands, Chinese brands aim to make a profit and reward shareholders. But success in <strong>China</strong> also has a communal aspect. A successful Chinese brand wants to be seen by consumers as helping the Chinese people and contributing to the welfare of nation. This notion is similar to CSR (Corporate Social Responsibility) but different and deeper. In the West, even brands where CSR is most evolved, so that it’s connected to a brand’s essence and not simply a marketing tactic, the object of the social responsibility varies. A brand might affiliate with a particular charity or cause, for example. In <strong>China</strong>, the brand commitment is more likely to be about in some way making <strong>China</strong> better. As Chinese consumers gain more experience with brands, attitudes are changing. With more brands to choose from, choosing is not only about status. Brand is also a marker of quality or safety. Younger people look to brands as an aspect of identity, which involves inward reflection, not just outward display. Brand has become a symbol of lifestyle as well, especially in tier one markets. Similar to the West, there’s a desire to realize personal aspirations quickly, and not postpone gratification. Government policies in a rebalancing <strong>China</strong> encourage these aspirations, but attempt to shape them in ways that are consistent with the values of Chinese culture derived from Confucius and other Chinese philosophers. Honestly gained wealth is fine. Corruption is not. This approach aims for both sustained economic growth and social stability. THE CHINESE DREAM AND BRAND CHINA The unique characteristics of the Chinese market helped drive the growth of brand value leaders such as Baidu, Alibaba and Tencent. The incubation period these brands enjoyed without exposure to western competitors – Google, Amazon, Facebook and Twitter – provided undeniable advantage. But it doesn’t completely explain their extraordinary development. Other factors were at work. Reasons that help explain the success of these Chinese brands include native talent, vision, and operational skill. Even in the 1980s, Chinese individuals studied abroad to become IT experts and to develop their entrepreneurial instincts. And the Chinese technology leaders bring vision, speed and the ability to create collaborative work environments. In addition, sociological factors and ironies drove faster adoption of the Internet. Chinese youth, like young people everywhere, For more about the Chinese Dream and Brand <strong>China</strong>, refer to these WPP publications: The Thoughts of Chairmen Now Written by David Roth, WPP and Jon Geldart, Grant Thornton International Book available on Amazon www.thethoughtsofchairmennow.com App for iOS and Android The Power and Potential of the Chinese Dream Available at www.brandz.com/china search for identity. But in the family-centered culture of <strong>China</strong>, most conducted a search without the benefit of siblings, because of the country’s one-child policy. Brands in a country with limits on self-expression built the world’s largest networks of interpersonal communications. The government enabled this Internet expansion to happen with the speed and coordination possible in state-directed economy. This interdependence of what’s good for the individual with what also serves the welfare of the country is consistent with the Chinese Dream. The dreams of the Chinese people, like the dreams of people everywhere, are about health and prosperity for self and family. The national dream includes some of these aspirations but also other goals. While personal and national priorities are not always aligned, they are achieved collaboratively. (See the <strong>BrandZ</strong> report, The Power and Potential of the Chinese Dream, www.brandz.com) The fulfillment of the Chinese Dream influences the evolution of Brand <strong>China</strong>, the public perception of Chinese products and services. And the strengthening of Brand <strong>China</strong> will help accelerate fulfillment of the Chinese Dream. Brands like Gree and Haier, well-known home appliance manufacturers in <strong>China</strong>, enjoy worldwide presence as suppliers to western brand marketers and are marketing more aggressively abroad under their own brands. Still, the most famous Chinese brand outside of <strong>China</strong>, Alibaba, is best known to international consumers more for its record IPO than its products and services. As that changes, Alibaba, and brands that follow its example, will help fulfill the Chinese Dream and lift the perception of Brand <strong>China</strong>. 92 93
MANUFACTURERS ARE SEGM<strong>EN</strong>TING FOR AFFLU<strong>EN</strong>T CONSUMERS WHO DESIRE PREMIUMIZATION AND ARE WILLING TO PAY FOR IT.
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