The 1,000% lesson from China
BrandZ Global Strategy Director
A decade ago, there was only one brand from China in the BrandZ Global Top 100 Most Valuable Brands: China Mobile. Today there are 14, and their cumulative value has increased by 1,004 percent to US$432 billion. This growth has been fuelled by technology and telecom brands, which comprise six out of those 14, along with four banks, two insurance companies, and two oil and gas corporations. In fact, these technology and telecom brands account for 95 percent of the value growth of Chinese brands in the Global Top 100 over the past five years, so learning from their success is instructive for Indonesian brands. Tencent, the most valuable Chinese brand, with a brand value of US$76.6 billion, is worth more than the entire Indonesia Top 50 added together (US$64.6 billion).
Clearly, the size of the country makes a difference to the value of brands there. But we see brands such as Tencent, Alibaba, Baidu and Huawei making a concerted effort to export their brands. Indonesia’s top publicly-quoted brands have yet to make this move. But in order to expand to other territories, a brand needs to understand what its proposition is – what makes it meaningfully different – and whether this translates to other markets.
The platforms established by Alibaba, Tencent and Baidu to encompass services that delight and seamlessly connect in order to make consumers’ lives better are exemplary examples of successful brand exports. Adapting to language and regional differences further endears them to users. In a borderless e-commerce world, the ability to connect buyers and sellers in an interesting and relevant way is signalled by the brand and the experience it can deliver. The China technology and telecom brands that were in the rankings five years ago - Baidu, China Mobile, China Telecom and Tencent - have boosted their brand equity scores significantly, which has affected their value increases:
|China Technology / Telecom Brands||2011||2012||Change|
|(Other China brands)||($145.7bn)||($145.8bn)||(0%)|
Another trend that these brands have taken advantage of is the blurring of consumer and business services in an increasingly connected world. Being in the Cloud and available to many constituents is a route to profitability if the brand is clear.
One of the drivers of Difference is a perception of innovation. If the brand is felt to be ‘setting trends’ then consumers believe it is up to date, superior and developing difference that matters for them. The technology and telecoms brands from China score at a high 123 (against an all-brand average of 100) compared to the Indonesia Top 50 with an average score of only 103. But innovation needs to be recognised and comprehended; otherwise it is not an innovation in the minds of consumers and will not drive success. The Alibaba innovation is to combine many services into one ecosystem for the benefit of users: an online market place for consumers, businesses and auctions, a payment and delivery system that is secure and trusted, as well as a photo messaging service and even music streaming. The focus is the consumer experience.
Being meaningful or relevant and empathetic is a vital driver for value growth. And, again, this is where the Indonesian brands could improve, by developing greater ‘love’. The BrandZ Top 100 lesson over 10 years suggests that brands that drive innovation get talked about more, generate trial and ultimately translate these encounters into love. Love then sustains the brand until further innovation. The Indonesia Top 50 only scores 108 on Love, compared to 137 for the China technology and telecom brands. Baidu and China Telecom lead on this measure. Baidu has consistently been language and dialect-friendly which, when combined with exploitation of mobile, has given it a lead in search; it is now exporting this to Brazil with a Portuguese-language version. China Mobile, with its first mover 4G licence, is also capitalizing on an increasing appetite for data usage across multiple platforms, and a move into online payment and other services with youth appeal.
In Indonesia, the four Telecom and TV brands in the Top 50 have strong brand equity (on average: 141 Different, 136 Meaningful and 166 Salient). But they are still behind on love and innovation, relying more on being famous or salient. So can these propositions be strengthened and exported more widely? Can they create a deeper ecosystem?
The Indonesia technology brands that show considerable promise tend to be digital versions and developments of publishing and entertainment – Kompass.com, an online version of the newspaper group which also has a TV content provider, and DetikCom, an online news and article web site. As these are not listed public companies they do not qualify for this valuation ranking, but the BrandZ data we collect shows their brands are Meaningful and Salient, but lack strong love, innovation and differentiation.
The overriding lesson drawn from the growth of China’s technology and telecom brands is that Difference makes the difference. A thousand percent, and more.