Jenny Chan 陳詠欣
Apr 1, 2019

BrandZ says Huawei is strongest Chinese brand outside China, but why?

Telecom and smartphone maker ranks No. 1 in brand power despite its struggles.

BrandZ says Huawei is strongest Chinese brand outside China, but why?

Huawei has landed on top of the BrandZ Top 50 Chinese Global Brand Builders study, which ranks the strength of Chinese brands overseas.

This year, the overall international "brand power" of the 50 brands rose 15% year-on-year—compared with 5% growth last year. Huawei, which was No. 2 for the prior two years that the report has existed, displaced last year's top-ranked brand, Lenovo.

So, how can a brand that has run into so much trouble overseas rank at the top?

The answer is that despite lots of documented geopolitical issues, the year was still very good for Huawei in terms of branding, driven by focus on 5G and R&D leading to chip-level AI capabilities, foldable phones and other innovations, said Doreen Wang, global head of BrandZ at Kantar.

Huawei's carrier business posted a rare decline in revenue last week, suggesting a hit from US allegations that its gear could be used by Beijing for spying. While under global security scrutiny, telecom equipment is not the company's only business unit. In August 2018, Huawei overtook Apple to become the most highly shipped smartphone brand, according to Canalys. "In terms of brand-building on the consumer-facing front, Huawei has done so much and should be recognised for that. Politics is not involved in this," added Wang.

While Huawei is under intense pressure from the US government, elsewhere Japanese, French and Spanish consumers are increasingly positive about Chinese brands in general, according to BrandZ.

In Japan, mobile gaming, consumer electronics, appliances, banks and payment networks from Chinese companies are in most demand. A mobile game from NetEase called Knives Out (荒野行动) has been thriving, pointed out Wang, overthrowing general perceptions that Tencent is the number one gaming brand. "It's not surprising that Tencent is not in the BrandZ top 10. It has little brand equity outside China since its games are mainly focused on the mainland," explained Wang. How about Tencent's hero product WeChat? Daily usage is low among overseas users.

For France and Spain, Chinese brand equity was mainly contributed by fashion e-commerce labels like Shein and Zaful, challengers to fast-fashion giants H&M and Forever 21. This is also congruent with the economic situations of these countries, considered test markets for Europe, said Wang. "The unemployment rate is high in these countries, so the affordability of Shein and Zaful is attractive. Young consumers in France and Spain are quite patient to wait for 15 days for their product to be shipped from China." 

Consumer electronics and mobile gaming account for almost half the brand power of the full Top 50 ranking (34% and 14% of total brand power respectively), with home appliances and e-commerce the next biggest contributors, contributing 11% and 10%. 

For the report, BrandZ ranks Chinese brands across 12 product categories based on their ‘brand power’ scores in seven developed markets, including France, Germany, Spain, the UK, the US, Australia, and Japan. Three ingredients comprise this score: 'meaningful' (meeting functional and emotional needs in relevant ways), 'different' (being distinctive or trend-setting) and 'salient' (coming easily to mind in a buying situation). The 'meaningful' and 'different' scores of each brand were computed based on Google Survey answers. Each brand’s 'salient' score was computed based on the survey answers and the brand’s search index in Google and YouTube.

Source:
Campaign China
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