Brand Purpose rises in importance for Chinese brands
Helping improve society links with national goals
As described in these brand building observations, Chinese consumers today are wealthier, more optimistic, and willing to pay a premium for innovative, differentiated brands. And they are less concerned about whether a brand is state-owned, market-driven, or multinational. They do care about Brand Purpose, however.
Brand Purpose is fundamental to brand success worldwide. But in China, it manifests as Brand Purpose with Chinese characteristics. At the 19th Party Congress, President Xi Jinping declared that the country has moved beyond the pursuit of growth at all costs of an era of responsible growth with a goal of creating a more prosperous and equitable society. Brands compound their chances for increasing brand value when they align their Brand Purpose the larger national purpose.
Analysis of the BrandZ™ China Top 100 found that between 2015 and 2018, the number of China Top 100 brands scoring high in Brand Purpose increased from 28 percent to 38 percent. In 2015, brands with high Brand Purpose scores generated 60 percent of the BrandZ™ China Top 100 value; and in 2018, the high Brand Purpose brands generated 81 percent of value.
Still, the BrandZ™ China Top 100 lag the BrandZ™ Global Top 100 in the Brand Purpose. The Chinese brands average a score of 107 compared with 110 for global brands. (100 is average) And 38 percent of Chinese brands score high in Brand Purpose compared with 40 percent of Global brands. They key takeaway is not that Chinese brands are behind, however, it is that they are not far behind.
The game is changing for brands that want to compete successfully in China. Chinese brands were never as engaged in Corporate Social Responsibility (CSR) as brands in other parts of the world. The larger agenda for Chinese brands—beyond making money—generally has been to advance the welfare of the nation. State Owned Enterprises (SOEs) engaged most explicitly. And like brands everywhere, the primary purpose of a Chinese brand is to bring something useful into the world that benefits customers and produces a financial return for stakeholders. Many brands in other country markets choose to articulate a higher purpose that pertains to improving the world in a brand-relevant way. In China, having a higher purpose is less of an elective for brands since the 19th Congress refined national priorities. Chinese leadership expects brands to pursue a particular higher purpose: to improve the lives of Chinese people, to help drive greater economic equality, and to strengthen the nation.