The ‘Real China Revealed’ survey, which canvassed consumer opinions in 22 cities across the top three tiers, included interviews in almost 3,500 homes, 300 retail outlets and 530 exit polls. It looked at consumer behaviour, their relationship with brands, the media and the retail environment. Tier two and three cities covered included, among others, Lanzhou, Nanning and Yichang, and Xian-yang, Linxi and Jiangsu respectively.
The study found that although local brands had a natural advantage because of distribution and staffing, foreign brands like Nokia and Motorola have already made significant headway in the mobile phone category in tier-two and three cities through their emerging markets strategies, while Korea-based Hyundai is beginning to make impressive progress in the automotive sector compared with local brand Qirui (Cherry).
Where motorcycles — the transport mode of choice in tier three cities — are concerned, Japanese brand Honda is well ahead of other contenders, and in the digital camera market, Japanese and Korean brands Sony and Samsung are the most popular compared with other locally-produced brands.
According to Ogilvy & Mather Greater China director of Discovery Kunal Sinha, international brands are leading local brands in those markets and categories because of perceived superior workmanship and after-sales service. These aspects are communicated more through brand positioning rather than price-focused advertising, suggesting local brands needed to develop more comprehensive communications strategies.
“Local companies need to be aware of the threat posed by international brands in the future, but to be fair, some of the larger local brands are moving away from price- and product-centred campaigns,” explained Sinha.
