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China 2016: INTRODUCTION | Implications for Brands

With all these changes, China remains a singular opportunity for brand growth – but a more complicated and competitive opportunity. Growth is slower and the greatest potential is deeper in the country and harder to reach. Using the Internet, particularly mobile, brands are engaging with consumers in smaller cities, towns and villages, and strengthening relationships with customers in the coastal cities. These dynamics a ect all brands regardless of ownership.

For multinational brands, being foreign is no longer an adequate di erentiator because local Chinese brands have caught up in Brand Power, the BrandZTM measurement of brand equity. And Chinese brands, both state-owed and market-driven, have invested heavily to build Salience and be easily recalled when a consumer is in a purchasing mind frame. But Salience alone is insu cient without being Di erent in a Meaningful way. Chinese brands need to build Diference.

At the same time, communicating and engaging with consumers has become more challenging because of changing media habits. Over half of all media investment will be spent on digital in 2016, GroupM predicts. And reaching consumers can be tricky.

They prefer to watch video ads on TV. But they spend more than half of their screen- watching time on mobile devices, primarily smartphones.

Finally, the geography of Chinese brand competition is changing. An encounter with a Chinese brand can happen anywhere in the world. Ten years ago, only one Chinese brand, China Mobile, ranked in the BrandZTM Top 100 Most Valuable Global Brands. Today, 14 Chinese brands are included in the Global ranking, and that number is expected to rise as Chinese brands build global presence.
For example, Haier, the home appliances brand, is expected to firmly establish in the US with the acquisition of General Electric’s appliance division.

Brand success in China requires high awareness, meaningful di erentiation, compelling creative work and an integrated media plan, with traditional and mobile components, to reach Chinese consumers at the right time with the appropriate message in the most e ective medium. More than ever, brand builders need the combination of strategic thinking and e ective execution of a chess champion or, even better, a master of XiangQi, the Chinese board game invented during the Han Dynasty.