Chinese Brands Rising in China and Abroad
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. We hope you enjoy this week’s Skinny.
China Moves to Expand, Upgrade Consumption: The Chinese Government has announced measures to boost and upgrade domestic consumption to drive China’s economy. In the first three quarters of 2014, consumption contributed 48.5% of GDP, up from 45.9% in 2013.
China Rich List: Jack Ma leads the Forbes rich list in China, more than doubling his wealth from last year to $19.5 billion. Second and third on the list are also tech billionaires, Robin Li from Baidu, and Ma Huateng from Tencent. Just eight women made the top-100.
Here’s What It’s Like To Go Supermarket Shopping in China: Observations from a trip to a Chinese supermarket by an American visiting China.
Internet, eCommerce & Mobile
7 Key Differences Between Chinese and Western Consumers: 75% of online Chinese consumers post feedback on their purchases at least once a month, versus under 20% in the US.
Smartening Up Their Act: More than 100 million smartphones sold in China in the second quarter of this year – over a third of all phones in the world – and eight of the top-10 brands were Chinese. Now they are taking on the world.
For First Time Ever, Baidu Now Sees Most of Traffic Come From Mobile: Mobile contributed 36% of Baidu’s revenue in Q3, up from 30% three months ago.
China Considers Regulating Smartphone Apps: With ¥1 out of every ¥10 spent in China now being spent online, the Chinese Government is looking at ways to reign in privacy leaks and malware through apps.
Developed Asia Wearies of Tech: Koreans and Singaporeans are likely to believe that « too much technology can make you disconnect from people, » however most Chinese don’t agree according to a Y&R poll. Young Chinese are also much more likely to relate to « I love sharing my life via social media. »
Amazon Will Offer Global Shopping and Ultra-Fast Delivery in China Starting This Singles Day: Amazon is hoping to get its piece of next week’s Single’s Day by offering delivery within 3-days to Chinese consumers who purchase from Amazon’s US, German, Spanish, French, and Italian stores.
Food & Beverage
How Do You Say Sangiovese In Chinese? The Language Of Wine, Translated: It is much more effective describing wine in a way that is meaningful to Chinese consumers – geographically, linguistically, and culturally – such as using taste descriptors that Chinese can relate to.
Growing Seafood Appetite an Opportunity: Chinese average consumption of seafood is picked to reach 37.7kg this year, 57% more than in 2000. The global average is just under 20kg.
China Eases Monopoly on Handling of Credit-Card Payments: Domestic and foreign firms such as Visa and MasterCard can now apply to settle payments between banks and vendors in China, without requiring branding with UnionPay.
Meet Yang Li, a Designer Putting China on Fashion’s Biggest Stage: China is shaking off negative connotations that “Made in China” is poor quality; even brands such as Prada, Michael Kors and Coach have set up production in the Mainland. We’re likely to see more world-class designs come out of China with initiatives such as the Council of Fashion Designers of America establishing an exchange program that has sent New York-based designers to China and brought Chinese designers to New York.
Design Passion Grows Alongside China’s Auto Industry: Although Chinese consumers are yet to warm to local auto brands, some of their designs are being internationally recognised, such as Chery TX’s Shanghai-designed concept SUV, named Concept Car of the Year for 2012 by the UK-based Car Design News.
Chinese Brands to Storm Luxury Market: Just 9% of Chinese consumers only buy Western luxury brands. 51% bought Western brands first, but also considered Chinese brands. Authenticity is the most defining element of a luxury brand according to 61% of luxury consumers, customer service 58%, craftsmanship 56%, quality 53%, sophistication 53%, great design 52% and heritage 48%.
That’s the Skinny for the week! On the to-dos this week, why not contact China Skinny to discuss how we could help with your marketing, online initiatives or research to take advantage of China’s opportunities. Just email us at firstname.lastname@example.org or call us at +86 21 3221 0273 so we can learn more about your objectives and let you know how we can help.
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