China’s quantum economic leap to become the world’s factory in just 30 years has been remarkable, but its homegrown businesses are still lagging behind foreign competitors when it comes to finding that elusive branding magic overseas.
Two Chinese firms have become truly global brands (defined as ones that derive more than half of their revenue from overseas). Lenovo leads the way, with 62 per cent of its revenue derived from international business, while ZTE is close behind with 53 per cent.
With increasing digitisation combined with a focus on customer experience, these two brands now have a shot at winning a place among the pantheon of globally-iconic brands. In turn, they will be instrumental in giving other Chinese brands a framework to globalise and move perceptions of the nation away from ‘Made in China’ to ‘Created in China’.
Here is a list of five principles that Chinese business leaders need to know about branding, both domestically and internationally.
1. Significant, sharable differentiation
Branding is about attracting consumer interest by standing out from the competition, and brands that have differentiation become market leaders. It is more than just getting high volumes of pageviews and reposts in the shortest possible time. Brands must create compelling narratives that speak to target audiences and encourage sharing on multiple levels.
Millward Brown’s BrandZ research shows that Chinese brands like Alibaba are closing the gap with multinationals in terms of “brand value”. Alibaba, hot on the heels of its international competitor Amazon, is currently valued at $64.3 billion by Millward Brown. This is driven in part by Alibaba’s difference as perceived by consumers. Thanks in large part to its founder, Jack Ma, Alibaba is a differentiated brand that speaks to the Chinese consumers' aim of achieving the ‘Chinese Dream’.
2. Big ideas over big data
The utilisation of big data in marketing and brand communications has undoubtedly been a great boost to the world of commerce. However, it can also be a double-edged sword, with data sometimes being used harmfully against companies as well.
For example, Sony’s stock value tumbled more than 10 per cent in the wake of its hacking scandal last year. The lesson is this: big data, groundbreaking as it may be, is still only a technological tool. It is the big idea–the interpretation of that data—that has a truly meaningful impact.
In today’s consumer-driven environment, big ideas are the ones that harness technology to enhance people’s daily lives. A recent, and highly successful, example is Didi Dache’s red envelope (hong bao) app which connects the traditional Chinese custom of gifting with the practical purpose of taking taxis.
3. Appealing to the heart
While products must provide a certain level of quality, brands that want to command loyalty must appeal to consumers on an emotional level—be aspirational, provide a sense of familiarity and encourage deep-rooted brand associations.
A huge part of the appeal of Harley Davidson motorbikes, for example, is the branding behind the bike and what the bike represents. The actual performance of the bike itself, while still important, is often secondary. Increasingly, Chinese brands realise that this is an avenue they need to pursue.
My colleague at CKGSB, Dr Teng Bingsheng, recently observed that Xiaomi’s mobile fans are so dedicated to the brand that its conferences are “closer in nature to a religious gathering than a company forum”. This is an example of great Chinese branding in action.
4. Empowering and engaging the younger generation
Millennials as a consumer group are the most likely to pose challenging questions about a brand. Their inquisitive nature and tendency not to take things at face value—due to having grown up in an information-rich age—mean that they are not easily convinced by a brand and will often question its motives.
Brands need to have convincing purpose that stands up to robust questioning about corporate responsibility and ethics. In an era of information overload, purpose is a guiding light for both brands and consumers.
5. Bringing change to society as a whole
When breaking into overseas markets, good localisation techniques only provide a base for success. What is more important is that people and society are never missing from the branding equation.
Nike’s promotion of public health through its development of services encouraging sporting activities and camaraderie between sports enthusiasts is one such salient example. Another is how Poly Real Estate developed its social responsibility by building healthcare facilities for the elderly, further enhancing its brand image as one focused on welfare and harmony.
Ira Zaka is global marketing and communications manager at Cheung Kong Graduate School of Business.