If you think ‘Made in China’ is always associated with cheap and low quality goods, think again. DJI—the first choice for any drone fan—is headquartered in Shenzhen and dominates 70% of the consumer drone market globally; Huawei, the telecommunication company that developed its first branded smartphone only five years ago, has already become the third largest player in the sector with a 9.4% market share worldwide, behind Samsung and Apple. In this interview, Doreen Wang, author of the BrandZ Top 30 Chinese Global Brand Builders report, makes sense of China’s “glocalized” brands and the bumpy roads they may face in the future.
These days, corporate value is based not only on what you sell, but who you are: in a 2016 global study by Edelman, 48% of consumers said they won’t buy from a company they distrust but 37% said they will pay more for a product from a company they do trust. Unfortunately, becoming one of these admired companies is not easy. A great reputation doesn’t just appear by magic simply by behaving honorably and doing good work. So what facets are needed to build a respected corporate identity?
Between rapid technological change and global competition, it’s becoming harder for anyone selling a product or service to maintain a competitive edge–especially when that product is more or less the same as everyone else’s. But companies with products caught in this trap have more options than they realize. Even if you can’t win by being the cheapest or the best, you don’t need to simply resign yourself to commodity status. Creating a consumer brand for the industrial commodity, branding the product in a way that makes it familiar to the users, and sometime even raising price can be a positive differentiator.
In recent years, globalization has lifted billions of people out of poverty and created vast wealth, but has also spawned hyper-competitive markets that make a secure niche ever more difficult to find. Everyone from cabbies to multinational businesses find it’s harder and harder to maintain an edge. Meanwhile, in the world’s younger economies, particularly China, companies face another challenge: unlike Westerners who grew up loyal to particular brands, Chinese consumers did not have that; and as markets consolidate, consumers are selecting a few favorites. So how should companies deal with these new trends?
Greater China is now Apple’s number two market after North America, comprising 24% of its business. In October, Apple CEO Tim Cook told investors he expects Greater China will eventually become the company’s top global market. To be sure, Apple faces challenges in Greater China. Sales in the region rose 14% in the company’s first fiscal quarter ended December 26 to $18.4 billion, compared to 70% in the same period a year ago. In a January earnings call, Cook said Apple is starting to see “signs of economic softness” in Greater China. Does the tech giant have staying power in what is now its number two market?
Japanese clothing retailer Uniqlo has quickly found huge popularity in China based on an ethos of high quality at affordable prices. It has been steadily building its presence in China over the last decade, and now has ambitious plans to accelerate its growth, most notably through a bold expansion in its number of shops. That might seem sensible given its growing popularity—revenue soared by 21% between August 2014 and 2015 across Uniqlo globally, largely driven by an increase in Greater China revenues of 46% and operating profit of 66%. But is it now at risk of over-reaching itself, particularly given the slowing Chinese economy?
Miko Wormuth, CEO of TWICE Fashion Accessories, on what it takes to build a business from scratch in China and the challenges of operating on e-commerce platforms like Taobao and Tmall.
Social media can be a great tool for marketing in the moment. Also the worst.
Chinese fast fashion brand Handuyishe is beating well-established rivals by focusing exclusively on e-commerce. Why is that a good strategy?
An increasing number of brands are finding it lucrative to woo the growing legions of Chinese tourists—both outside China and within.