Benson Ho
Nov 27, 2023

How the open internet empowers Chinese brands going global to achieve brand power and incrementality

Chinese enterprises have become increasingly mature — so what is holding them back from achieving sustainable, transformative development?

Benson Ho, senior vice president of North Asia, The Trade Desk
Benson Ho, senior vice president of North Asia, The Trade Desk
Though global uncertainty has posed a tremendous challenge to the world economy in recent years, many industries have weathered market disruptions this year and proved that growth is still possible. Take the Chinese auto industry as an example. According to data from the China Association of Automobile Manufacturers, China hit a record high in auto exports and overtook Japan as the top car exporter around the world for the first time. Notably, the exported new energy vehicles grew significantly by 1.5 times.
By virtue of leading supply chains and product power, China has undoubtedly become a major power in the global auto industry, particularly in the realm of new energy vehicles. However, achieving “major” status doesn’t necessarily equate to being “strong.” In a recent article, Wang Chuanfu, chairman of BYD said, “Establishing a globally recognised world-class auto brand is a critical symbol of automobile powerhouses, which we are still lacking in China at present.” 
In actuality, this is a common challenge for all Chinese enterprises with ambitions of going global. It’s safe to say that Chinese enterprises have become increasingly mature in terms of management, products, technologies, capitals, business models, and marketing. However, what’s the roadmap for them to efficiently transition from being large to strong, and achieve sustainable, transformative development? 
In my opinion, only by forging brand power — with brand equity as a priority — and pushing incrementality, can we sustainably support the development of Chinese enterprises' overseas business.
From product power to brand power
In lack of widely recognised brands, Chinese enterprises are suffering from big communication and cognitive costs during exploration of international business. 
Again, the Chinese auto industry offers valuable insights into why that might be. A KPMG report released at the Carbon Neutrality Expo in Shanghai this year showed that the three most sought-after Chinese BEV brands in Europe are all European brands which were acquired by Chinese enterprises.
By contrast, China’s self-owned brands accounted for less than 2% due to serious homogenization and weak brand personality. Therefore, despite their shorter delivery periods and competitive technology and cost, Chinese automakers have to attract consumers by pricing their cars at a rate of 10% to 15% lower than their rivals. 
Almost all Chinese enterprises encounter these obstacles when expanding into the middle and high-end global markets. Their success still relies on cost-effective product power instead of brand power.
Fortunately, there’s always a solution. According to a survey report released by The Trade Desk (“TTD”) and Kantar, over 70% of overseas consumers keep an open mind towards more than 90% of Chinese brands. Moreover, consumers generally invest twice as much in the brands that have an emotional connection with them and show three times more loyalty. For going-global Chinese enterprises, establishing an emotional connection with consumers and driving incrementality are key to realising their brand power.
Building brand power and achieving incrementality through the open internet
What’s incrementality? Incrementality refers to increasing the mid- to long-term benefits of advertising campaigns, thereby enhancing the conversion performance. In the context of brand advertising, incrementality means accumulating brand equity through advertising to achieve higher sales conversion, driving business growth. 
Faced with a multitude of globally renowned advertising options, how could going-global Chinese enterprises make proper decisions regarding advertising channels and campaign frequency to reach target users and accumulate brand equity? For these brands, the open internet presents huge potential for illuminating their brand philosophy, creating a distinctive brand image, and building relationships with consumers.
Compared to walled garden platforms owned by tech giants, the open internet comprises a multitude of omnichannel resources, such as websites, CTV, video and audio streaming, podcasts, and digital out-of-home (DOOH). With its diversity and openness, the open internet can be a great boon to going-global Chinese enterprises looking to drive brand equity and incrementality.
Firstly, significant incrementality requires a tremendous amount of impressions. Only the top of the marketing funnel is substantial enough to ensure the kind of quality media exposure and traffic that leads to incremental sales conversion. In this case, omnichannel marketing plays a pivotal role, with its diverse and wide-ranging channels enabling brands to better reach their target users and boost incrementality.
Secondly, the open internet allows marketers to leverage a variety of independent and third-party tools to get deep insights on how brand advertisings impact sales conversion, and specifically, how different channels individually contribute to sales. Instead of having to operate within the limited bounds of walled gardens, brands advertising on the open internet can rely on more systematic and sophisticated analysis to confidently optimise budget allocations, and ultimately, elevate their ROAS (return on ad spend).
However, a report from TTD revealed that while consumers spend over 60% of their time online on the open internet, it only receives 40% of ad revenue globally. In contrast, walled gardens account for 40% of consumers’ digital time, but secure 60% of digital advertising revenue. In 2021, China’s expenditure in overseas advertising totaled around RMB120 billion, of which Google and Meta accounted for about 80%. 
To correct this imbalance — and ensure Chinese brands can devise their global go-to-market strategies as effectively as possible — TTD advises the brands going global to look beyond the traffic vortex of walled gardens and embrace omnichannel marketing in the open internet to enhance advertising precision, increase brand influence, and attain business growth. With years of experience supporting Chinese enterprises in overseas markets and a track record of leveraging innovative solutions to deliver measurable results across platforms and channels, TTD looks forward to conveying more Chinese brand narratives on the international stage.
Benson Ho, senior vice president of North Asia, The Trade Desk


Campaign Asia

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