Chinese brands continue to gain global recognition, building strong brands that deliver sustainable profitability

In the face of continued global disruption, 50 top Chinese brands have grown their collective overseas Brand Power by 6% in the last year, which measures the ability to drive current market share. This confirms that there is still a strong appetite for Chinese companies to grow globally and they are proving that they have what it takes to build strong, resilient global brands that are valued by overseas consumers. These insights were revealed at the launch of the sixth annual Top 50 Kantar BrandZ Chinese Global Brand Builders 2022 ranking by Google and Kantar. The ranking measures how Chinese brands are perceived and valued by consumers in 11 international markets.

As more and more Chinese brands pursue a global business strategy, many of them offer world-class products and services with market-leading features and outstanding design. By providing more perceived value, Chinese brands can premiumise and become more profitable. Chinese brands typically invest heavily in new product development and innovation, but often fail to spend enough time and energy on clearly understanding local consumers’ motivations for buying. Or, they understand motivations, but miss the mark with their communications. For success in other markets, they need to convince people to love it, love it, love it instead of just buy it, buy it, buy it.

The pandemic intensified consumers’ desire to spend their money on the right things, but also dialled up the need for brands to “feel” like the right fit for someone’s life, as well as providing emotional healing, excitement and fulfilment. Therefore, in the face of inflation, creating Meaningful Difference, that is, creating a brand's "perceived value", is a top priority for brands. The value of being Meaningful and Different has increased in the past two years and accounts for around 86% of a brand’s Power. At the same time, a brand’s Salience (how easily a brand comes to mind for consumers) contributes just 14% of its Power.

By focusing on delivering higher functional and emotional value of their brands and showcasing their unique difference, as some of the new generation brands are doing, Chinese brands can find success in brand-building and increase perceived value.

Newcomers to the ranking this year, FlexiSpot (No.49) and realme (No.50) are masters of demonstrating their value to consumers. FlexiSpot’s range of ergonomic working solutions, with their clever designs, such as a sit-stand reminder and exercise desk bike, tap into an emotional need for a functional and healthy lifestyle when people are working from home. Emerging mobile phone brand realme combines a bold brand slogan, ‘Dare to Leap,’ with fashionable design and innovative technology that appeals to younger generations in both developed and emerging markets.

Top 20 Rising Stars

Further evidence of an increased focus on brand and perceived value is even clearer in the 20 Rising Stars that this year’s report has uncovered for the first time. The Chinese Global Brand Builders report this year shone a light on a new generation of Chinese global brands.

With a fresh focus, these entrepreneurial brands are less focused on price and function aimed at the mass market and are building lasting bonds with a more defined target audience. They are mastering the importance of creating distinctive brand stories to attract consumer interest and shape perceptions through digital interaction. With this strategy, despite lower awareness, the average consideration rate of the 20 Rising Stars among consumers who are aware of the brand is on par with those in the Top 50 Chinese Global Brand Builders ranking.

Many of the 20 Rising Stars are fashion, home and smart living brands, such as cosmetic brand Florasis. Billed by industry-watchers as having “reinvented make-up with Chinese style and culture”2 , Florasis uses distinctly Chinese styling and cultural heritage fused with modernity in all its communications.

Commenting on the results, Annabel Lin, Managing Director of Greater China Solution Specialists and APAC International Growth, Google, said, “The watchword right now for Chinese global brand builders – both new and old – is diversity. To fulfil diverse consumer needs in global markets, brands are encouraged to find their own way to approach every aspect of value uplifting, from market strategy to product development and brand communication.”

Over the years, we have seen that Chinese companies who have invested in building their brands, are able to achieve sustainable, quality growth and find resilience during financially stressed times. During this challenging year, those brands have managed to stay the course, and increased their trust and relevance with consumers around the globe.

Building Brand Power

As we enter a new stage of development for Chinese brands, there will be much to be gained by building Brand Power with consumers and establishing the brand to be a longer-term value giver. The report identified three actions for Chinese brands looking to expand their footprint and grow over the next year:

• Be curious – Identify the value your brand can provide. By observing and understanding consumer’s motivations, you can adapt as their preferences evolve and identify fresh opportunities. You will need to shift your mindset from meeting people’s current needs to anticipating or even shaping their wants and desires.
• Be agile – Being able to move quickly in response to changing circumstances and the emergence of new opportunities that you have discovered will be key. Remember to play to your brand’s unique strengths and amplify these in ways that ensure they stand out from the competition.
• Be bold – While it is important to focus on getting the basics right with excellent product quality, reliable services and experiences that are memorable for all the right reasons, don’t let this focus stop your brand from seeing what the future could hold. Sustainable growth comes from going beyond doing what you do well; your brand must be motivated by issues and values that consumers care about.