Home » Business » Biz Special
Going global a challenge for Chinese brands
Print Edition
New York-based Millward Brown, an arm of the Kantar Group focusing on brands, media and communications, named Travyn Rhall its global chief executive officer of market research three months ago.
Prior to the appointment, Rhall oversaw the company’s businesses in Africa, the Middle East and the Asia-Pacific for seven years.
Shanghai Daily talked to him about the strengths and weaknesses of Chinese brands and how his company assists both foreign and domestic companies in global marketing.
Q: Millward Brown publishes the BrandZ Global Top 100 Most Valuable Brands each year. How are Chinese brands doing and what kind of brand do you think will enjoy better recognition among consumers?
A: To arrive at a brand’s value, we combine the financial valuation of the brand as well as brand equity, which relates to consumers’ impressions and loyalty in major markets.
Hence the key ingredients for brands to be particularly strong include financial success, including share price performance and also strong brand recognition.
In China, we see that private-owned are generally doing better than state-owned companies because they’re more entrepreneurial and usually have visionary founders with innovative business models.
Back in 2006, there was only one Chinese brand in the Top 100 List but last year there were 12 of them. Going global is certainly the major driver for better brand recognition and better financial performance.
However, in terms of brand recognition, the top Chinese brands still enjoy more loyalty among Chinese consumers and are somehow less powerful in other parts of the world, while the top international brands, such as Coca-Cola, have loyal consumers in a lot of regions in the world.
Some of the private-owned high-tech companies such as Baidu and Tencent are expanding aggressively overseas and their brand recognition will get stronger in a more global perspective. That would be a major driver for their future growth.
Xiaomi is also another interesting story with its founder taking the best of different smartphones and creating a new model that’s a lot cheaper. Xiaomi has done a lot better than many overseas smartphone makers due to zero retail cost.
Because of the size of China’s booming e-commerce market, more innovation is likely to be seen here in the future. Companies that are innovative in sales channels, have a deep understanding of the social commerce realm and become part of the e-commerce growth story are bound to prosper.
The stereotype from the outside world is that Chinese manufacturers copy everything from other companies but some of the companies here have added new features to better suit the local market. For example, Weibo is more innovative than Twitter and better suits the Chinese market.
The “China Copycat” stereotype is being broken down and entrepreneurs here are creating exciting things which will also give them a lot of growth potential in the future.
Q: What will be your advice for Chinese companies to make successful overseas expansions? Could you give an example?
A: The most high-profile Chinese company to expand overseas came with Lenovo’s acquisition of IBM’s personal computer business. Now, overseas sales contribute to more than half of its revenue, which is a huge success. It’s probably a role model for Chinese companies acquiring overseas businesses and seeking to make the deals successful.
Apart from a reasonable business model and innovative products and service, diversity of the management team is also very important. It’s very hard to go into developed markets with views from China. The management team has to make sure there is not a disconnect between central management and local operations.
There are also challenges about centralization versus local management in all kinds of organizations and the difference of cultural values also need to be taken into consideration. There are obviously enormous opportunities and many Chinese companies are doing quite well and will continue to do so in the future.
Q: What is the impact of the digital world on your business?
A: First of all, it changes the way we collect information on consumer behavior. Data collection is moving toward mobile, and it will change more rapidly in the future.
Secondly, the rise of e-commerce is also pushing business owners to adopt more sophisticated advertising spending strategies because they want to raise the effectiveness of their advertising dollars. It also raises new questions about how to help them sort out their budgets to better suit the market.
Thirdly, it also gives us access to a lot of information about consumer behavior, including how people browse websites and search for products on their smartphones.
It’s an incredible opportunity for market research companies because we don’t have to rely only on paper and pencil and questionnaires. Everything is electronic now.
Q: What kind of role do you expect your China business would play in the global network?
A: Our China turnover became the third biggest globally compared with the 20th one back in 2006 and maybe it’ll take only a short period time to become the second biggest one. Our acquisition of ACSR also gives us a very strong understanding of the Chinese market, which is a key driver of our success here. Our multinational clients and local clients each make up half of our overall turnover in China.
Multinationals are trying to understand more about the local market and its consumers, while Chinese companies are trying to do more about marketing overseas.
Historically, our China division has been an importer of talent and experience. The challenge now is how China can become an exporter of local knowledge and share things that are happening in this market with other countries.
E-commerce in China, for example, is gaining momentum, and retail infrastructure evolution may take place somewhere else in the world, such as in Brazil, Russia or Indonesia. It’s important for us to help businesses there understand more about China.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
