China’s New Brand Leaders
By Leslie Butterfield
The speed of change in China today is truly incredible: Incomes are rising, prices are stable and, as a result, optimism and conspicuous consumption still abound. But as things that were once the stuff of dreams are now within the reach of many Chinese people, the consumer culture is becoming more discerning and a new generation is increasingly seeking quality and authenticity over pure display and status.
At the same time, Chinese brands are becoming more self-confident. Many are looking to not only expand and grow regionally, but also compete directly with the Western brands that currently dominate the global landscape. To play at the global level, however, Chinese brands will need to foster more of a brand-building culture. Brands should keep several thoughts in mind as they develop strategies to lead and succeed globally.
Leaders lead, they don’t follow
China is moving from imitation to innovation. Rather than simply looking at what other brands are producing and figuring out how to make the same for less, more Chinese brands are putting effort into producing a better version of those brands. Chinese brands with global aspirations can take important cues from others, but to truly succeed, they must find their own way forward through innovation and sound brand strategy.
China is getting better at listening
to consumers, and digital research is growing. Companies like K-Matrix are doing what Sysomos (a social media listening firm) has done for North America. As conversations online increasingly influence consumer perceptions, using tools that track and measure what people are saying about your organization in the social media landscape is essential. Tomorrow’s leading brands will
be those that listen closely and actively manage impressions across all channels of communication.
Leaders are responsive
Once brand leaders and marketing teams really understand how their brand is perceived, they can influence the way the market views their organization. Responding to social feedback, both positive and negative, is a great way to set the record straight or steer the conversation. Western brands have a head start in this regard, but Chinese brands are beginning to catch up. For all brands, understanding the opportunities that result from website or product improvements and getting a handle on how consumers are reacting to online storytelling or overall brand messaging is critical to making changes that will keep a brand relevant and differentiated.
Great brands start from within
While the discipline of internal brand engagement is still in its infancy in China, Chinese companies that put effort into getting employees on brand and on message are creating a stronger internal corporate culture and building closer relationships with customers. Home electronics giant, Haier, is one such example. Despite slow growth in the home appliance industry, Haier’s 2012 performance surpassed the whole market. Its secret? Haier actively promotes a spirit
of innovation and entrepreneurship among employees. The brand shifted its mindset from selling products to selling services and encouraged employees to face the market directly. In doing so, it fulfilled its consumers’ needs for customization and personal attention. Leaders like Haier realize employees are among the most significant assets of a corporate brand, as they are the ones who interact with customers and really bring the service-profit chain to life.
Great brands combine scale and intimacy
“Bigger is better” is still a common mindset in China, but volume and
scale can only get a brand so far. As customers become more discerning and expectations increase, Chinese brands need to focus more on creating intimacy—recognizing and responding to emotional needs. Ping An, now one of the best-known financial services brands in China, owes much of its success to this factor. Recognizing that consumers are struggling with complex financial products, the Ping An brand promises to make managing finances easier. The company’s ability to clarify its brand promise and speaking to real human needs is the reason Ping An continues to thrive, even when the rest of the insurance industry is struggling.
Digital must be front and center
Since e-commerce, mobile, and social media are growing rapidly in China, any brand strategy that doesn’t embrace digital is not a smart strategy. Digital is redefining and reshaping absolutely everything: consumer choices and behaviors, customer experience, and how brands react to and relate to customers. As online activities become integrated into every aspect of Chinese life, from photo sharing and mobile payments to flight and hotel reservations, the brands that best respond to evolving user needs and behaviors will be the ones that succeed.
Sustainability is a must
While China is making efforts to adopt renewable sources and improve energy efficiency, the country, according to the International Energy Agency (IEA), is still the biggest emitter of CO2 emissions in the world. Many reports have drawn attention to the country’s deteriorating environment and the problems this causes, from air pollution in major cities to natural disasters perhaps exacerbated by climate change. As such, responsible green business practices will increasingly be a pre-condition for China’s domestic stability, its moral mandate as an emerging super-power, and a path to a more sustainable economy.
Despite significant challenges, the rise of a new generation of aspiring business and management professionals bodes well for China. This country will soon have the best business-trained workforce in the world. Defined by a spirit
of inventiveness and an appreciation
for authenticity, these progressive and digitally-savvy young executives will surely accelerate the modernization of China’s corporate culture. From embracing brand-building and imbuing brands with a human touch to advancing sustainable business, Chinese companies that harness the power of their brands will survive the tests of adversity and increasingly make their mark on the world as the 21st century unfolds.
— Leslie Butterfield (email@example.com) is Global Chief Strategy Officer, Interbrand