The opportunity is now ripe for Chinese brands to become household names if they increase their investment in brand building, according to a report from independent consultancy R3. 

Sabrina Lee, managing director, China, at R3 noted that an understanding of how to work in a digital-first environment puts Chinese brands at an advantage. “These companies come from a culture already fully immersed in innovation,” she said.

Despite the growth of Chinese brands internationally, there has been a decline in awareness of Chinese brands over the past three years. A report by BrandZ revealed Millennial consumers (aged 18-34) were 26% less likely to recognize a Chinese brand, where the decrease was measured at 6% for people aged 35 and older.

R3 noted this is due to a competitive global market where approximately 30,000 products are launched every year. Brands already well known like Alibaba and Xiaomi remain unaffected by the increasing volume of choice, but companies that have not invested in strong, exportable brand strategies risk getting lost.

Many Chinese brands still go to market with no brand purpose, preferring to focus on sales goals. This limited emphasis on brand building, favours a fail fast, fix fast approach in new overseas markets but foreign consumers are not as forgiving of such short-term strategy.

To weather international competition, R3 stated that Chinese companies need to view the overall brand as the main vehicle for export instead of focusing on product (commodity).

“Investing in brand building also engages younger consumers whose perceptions of 'Made in China' are more positive than older generations’ impressions. Generation Z are more open to products that are innovative and affordable and place less regard on country of origin,” the report said.

Lee pointed out that the current visibility of Chinese brands including TikTok, WeChat, Lenovo and DJI is the result of brand building not traditionally seen in Chinese companies. “When you can match great marketing with affordable and innovative products, global consumers will respond,” said Lee.

The report China Brands Go Global explores the forces moving Chinese brands overseas and the role that culture, strategy and infrastructure play in extending their influence across the globe. [For more, WARC subscribers can read the full report here]

Sourced from R3 via WARC