We’ve stopped what we are doing and creating your personalized BrandZ™ report, which will appear in your inbox soon.

Brands in established categories dominate in Brand Power

Internet brands have potential for Brand Power growth

Although the BrandZ™ China Top 30 Export Brands ranking divides evenly in number of brands (half from established categories and half from Internet-driven categories), the division by Brand Power is not balanced.

 

Rather, brands in established categories dominate, accounting for 57 percent of the Top 30 total Brand Power, which is the BrandZ™ measurement of brand equity. Achieving High Brand Power is important for exporting brands because it indicates the inclination of consumers to select a particular brand.

 

Brands in the established categories dominate the top of the ranking, while the Internet-driven brands are more present toward the bottom of the ranking. This division reflects the transition of China’s economy from a production-driven past to a consumer-driven future. In general, the brands in established categories drove economic growth and built Brand Power over time. The newer Internet-driven brands indicate the potential for economic growth and rising Brand Power.

We ranked the Top 30 exporting brands by totaling their Brand Power scores in the seven countries studied. Seven of the Top 10 brands are from established categories. The Top 10 scored an average of 839 in Brand Power, more than double the average 401 score of brands 11 to 20, and more three times the average score of 236 for brands ranked 21 to 30.

The Number 1 ranked brand, Lenovo, an established consumer electronics leader, derives around two-thirds of its exports overseas, and scored 1,682 in Brand Power. The consumer electronics brand Huawei, ranked Number 2, derives almost 60 percent of revenue from overseas and scored 1,256 in Brand Power.

 

In contrast, the Internet-driven brands appear lower in the ranking with closer scores. Four mobile gaming brands, for example, are clustered toward the bottom third of the Top 30, at ranks 19 to 22. The brands and their Brand Power scores, are: Tap4Fun (346), IGG (332), Youzu (309), and Our Palm (264).

Brand Implications

Established brands have emerged as global players over time, sometimes growing through acquisition and benefiting from state support. The Internet-driven brands more typically have grown organically. But both acquisition and organic growth strategies can work and result in category leadership. Selecting the right option depends on the category involved and the competitive circumstances.

 

Lenovo, for example, gained knowledge and market share with its acquisitions of IBM’s PC division and Motorola Mobility. The acquisitions helped form a platform for innovation in both consumer and enterprise businesses. Lenovo’s IBM acquisition benefited from excellent timing and a strong transition plan. The acquisition happened during a period of consumer interest in PCs and drew a wave of publicity. The transition period continued an ongoing and mutually beneficial relationship between Lenovo and IBM.

 

In contrast, Haier’s acquisition of the GE’s appliance division accelerated Haier’s market share growth in the US. But appliances is a relatively low interest category, and Haier chose to retain the GE name rather that convert the business to the Haier brand. Similarly, when Ninebot, a Chinese maker of self-balancing vehicles, acquired US-based Segway, the industry leader, it retained the Segway name, which enjoys high brand awareness across many country markets.

 

Of Chinese brands that have chosen the organic growth option, Huawei is perhaps the best example. Having built a strong brand in China, the company elected to establish the Huawei brand worldwide as a global leader in quality and innovation. The company’s success selling millions of Huawei-branded smart phones worldwide, illustrates the importance of brand. In the early phases of exporting, when Chinese brands typically expand to neighboring markets, it may be possible to rely on the strength of a particular product. But dependence on product alone only goes so far; and not far enough for extensive overseas expansion. At that point, a brand adds marketing efficiency and effectiveness. Brand serves as a global identity, like a passport. It can signal a high level of innovation, product diversity and quality, and trustworthiness.