There’s nothing quite like a global pandemic to test the value of a brand. Some brands have increased in value by virtue of their category; others have become more valuable by adapting swiftly to changing consumption priorities, differing usage occasions, and shifting customer journeys. Yet in this untravelled COVID-19-influenced world, the underlying trust and connection that consumers have in brands has never been more important.
That is why this year’s BrandZ 100 index of the world’s most valuable brands is even more interesting than usual. Much of the research and analysis was undertaken at the crux of the outbreak, when the depth and strength of brands were really being stress-tested.
This year, Chinese brands accounted for 17 of the world’s most valuable brands, two more than last year. Of the five new brands entering the global list, two were Chinese. China also accounted for a quarter of the top-20 fastest rising brands. This reflects the importance of the China market globally in rankings, the rising calibre of Chinese brands, and how Chinese brands have embraced digital across their business structure – a common trait in many of the top-ranking brands. More than half of China’s top brands were tech companies and many of the others have a digitally-focused constitution.
Brand values that come out of China are likely to change faster over the next 12-months than they ever have. The extra time at home has given many consumers a chance to reflect on what is important to them. At China Skinny, we have seen consumers increasingly considering their own purpose, and the purpose of the brands they engage with. Many of these drivers are unique to China. One beneficiary will be principled beauty brands who are expected to have an avenue for general trade in China by January 2021 that does not involve testing on animals.
Across the BrandZ index, brands with a high reputation for sustainability grew their brand value faster than those without. Although sustainability branding is less developed in China than Western markets, it has also advanced as a result of COVID-19. Whilst the sustainability movement globally has recently had less airtime due to the immediate coronavirus crisis, we’ve seen many Chinese consumers increasingly embrace it. This has been a result of the personal reflection above, but also due to the associations between environmentally-friendly and healthy products – which have been a key focus since Covid. Some consumers even consider the outbreak to be Mother Nature fighting back, which is swaying some opinions.
Brand values globally have been impacted by the shift to buying local. This was already trending over the past six-or-so years in China, but has hastened as a result of the pandemic and the resulting geopolitical challenges. BrandZ found that 87% of Chinese interviewed were slightly/far more in favour of buying goods and services from their own country – higher than any other country in the study. Some categories are impacted more than others, but it is worth every marketer taking note.
Few brands illustrate the polarising home-grown preference better than Huawei. Chinese consumers trust in Huawei smartphones overtook Apple in 2017 and is now at 138 for Huawei versus 112 for Apple (average=100). Whereas outside of China, Poland and Norway’s trust of Huawei is the highest at just 105, whereas in Australia and Japan it is 93, South Korea is 90 and the US is 89.
With 17 Chinese brands now in the top-100, and more Greater China companies making the Fortune Global 500 list than the US, global expansion is on the cards for China’s increasingly confident and assertive brands. Yet as Huawei has found, negative Chinese sentiment from both Governments and consumers overseas is hurting sales. More recently, the ban of nearly 60 Chinese apps including TikTok and WeChat in India, add to the challenge for Chinese companies expanding abroad. Playing fields in markets across the world are becoming more nuanced, which only reinforces the importance of a strong brand.
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