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China 2016: INTRODUCTION | CHINESE VS. MNC BRANDS

Chinese brands now equal multinationals in Brand Power

Chinese brands have achieved parity with multinational brands in Brand Power, the BrandZTM measurement of brand equity. Over the past six years, Chinese brands strengthened in Brand Power, while the multinationals weakened.


Brand Power correlates with market share. Chinese brands gained market share an average of 10 percent in 18 of 26 FMCG categories studied in a Chinese shopper report by Kantar Worldpanel. Multinationals grew share in only eight categories, averaging gains of 3 percent.
Brand Power parity means that Chinese and multinationals are in many ways equally competitive. And the trend favors Chinese brands. In 2010, multinationals scored 115 in Brand Power and Chinese brands scored 89. Today both score 100, which is the average score.
The Brand Power score is derived from three components: Meaningful, consumers feel an a nity for the brand or think it meets their needs; Di erent, consumers view a brand as unique in some way, even trendsetting; and Salient, consumers think of the brand quickly when a purchase opportunity arises.
 

Examining these components reveals that Chinese and multinationals score the same in Brand Power for di erent reasons. Chinese brands now exceed multinational brands in Salience, but lag multinationals in Di erence. Chinese and multinational brands are about equal in Meaningful. (Please see Six Critical Observations for Building Brand Value.)
Chinese brands made this competitive progress in part because of the increased knowledge and sophistication of Chinese consumers who increasingly select brands for their value. Chinese brands overall have improved products and services and have e ectively communicated in a way that builds awareness.
They have been less e ective communicating their distinctiveness, however. In BrandZTM research, Chinese consumers described Chinese and multinational brands according to 20 personality characteristics. They described multinational brands as sexy, desirable and di erent, and the Chinese brands as friendly, caring and kind.
And when those 20 characteristics are combined into BrandZTM brand archetypes, Chinese brands become the Friend or the innocent Maiden, for example, while multinationals become the Rebel or the Seductress. The less aggressive character of the Chinese brands makes being perceived as Diferent more dificult.

Implications for Brands

Chinese brands have momentum in building Brand Power. They have grown in Salience and now surpass multinational brands, which are weakening in Salience. Chinese brands need to build on their Salience and communicate how they are Different.
Multinationals need to halt the slip in the Brand Power. Like Chinese brands, multinationals will need to communicate with consumers more e ectively. They need to rebuild Salience with marketing communication that catches the attention of Chinese consumers.
For multinationals, however, it may be time to stress not how they are Different, but rather how they are the same as Chinese brands in the sense that they understand the Chinese consumer, and will help consumers build better lives for themselves and their families.