Back in 2011, most of the cool kids in China were sporting foreign-branded Apple, Samsung and Nokia phones, with the three brands accounting for 57% of all smartphone sales. By June this year, eight of the top-10 selling brands were Chinese. Local darling Xiaomi, which released its first smartphone just three years ago, now outsells every other brand – foreign and local – in the Mainland.
Similarly, 2012 research from the World Luxury Foundation found that 86% of Chinese consumers wouldn’t go near luxury goods labelled ‘Made in China,’ due to the country’s reputation for cheap goods. Research just released by Added Value, discovered that only 9% of luxury consumers now say they’d exclusively buy Western brands.
The rapid swing represents both Chinese brands upping their game and a growing acceptance from Chinese consumers for local goods.
Even outside of the Mainland, Chinese culture and preferences are becoming more a part of consumers’ lives; from the bubble tea sold at Western shopping malls, to big screen smartphones, to Chinese Zodiac symbols on products, to Chinese actors and backdrops increasingly starring in Hollywood blockbusters. This is being driven by brands hoping to appeal in China’s booming domestic market, cashed up tourists and migrants, but also a growing curiosity from Western consumers.
Yet most of the China-fication seen in the West is being steered by Western companies. Research last year found that just 6% of American consumers could name one Chinese brand. Things won’t stay that way for long.
Chinese brands are already making a big impact abroad. Xiaomi is rolling out its phones in Latin America, Russia, Turkey and much of South and Southeast Asia, as has just been named as the 35th most innovative brand in the world and the top up-and-comer by BCG. WeChat is popular in many Asian markets, and eCommerce companies in India, Africa and much of the developing world are looking to follow Alibaba’s business model – not eBay or Amazons’. Lenovo is the world’s largest PC vendor by units sold and Huawei is the biggest communications equipment maker in the world. Some of the world’s leading fashion houses now have production in China. Chinese cars, although not yet popular at home, are being recognised internationally for design, with manufacturers such as Hawtai selling more than three quarters of their cars outside of China.
Increasing confidence and growing revenue in the Mainland will undoubtedly lead to more Chinese companies expanding overseas, both organically and through acquisition. We will see also growing numbers moving from developing countries to take on Western brands in their own markets. So whether we’re targeting Chinese consumers or consumers anywhere, China should be on the radar.
One of the categories where imported brands will reign supreme for some time is premium food and beverage, due to a lack of trust in the local fare. For our readers in Shanghai, China Skinny will be presenting about Feeding the Masses: Trends in Food and Beverage Consumption in China next Thursday, November 13 – it will be worth the early morning. Go to Page 2 to see this week’s China news and highlights.