BEIJING — Chinese brands have made substantial headway in winning over the hearts and minds of the country’s shoppers, as indicated by a Brand Relevance Index from Prophet, the global brand and marketing consultancy.
The survey, which has been conducted annually since 2016, saw the company reach out to more than 13,000 Chinese consumers regarding 249 brands across 30 industries.
“This year, we are glad to see more homegrown brands making striking progress in being pervasively innovative while remaining ruthlessly pragmatic. Global brands still play a leading role in ‘distinctive inspiration’ and ‘customer obsession,'” said Leon Zhang, partner at Prophet and coauthor of the report.
Alipay, the online payment platform from Alibaba Group, topped the ranking, followed by Android, which has more than 70 percent of smartphone market share in China, while Tencent’s super-app, WeChat, came in third place.
For the first time, local brands now constitute the majority of the BRI’s top 50 brands. Two years ago, 32 of the top 50 brands were multinational, or MNC, brands, whereas in this year’s ranking, 30 are from mainland China. In addition, “innovation — not basic price/value reassurance — is propelling the momentum of local brands,” the company said.
A year ago, overall measures of Chinese brands’ “pervasive innovation” rested largely on two brands — Alipay and WeChat — and when those two power brands were excluded, MNCs took the lead.
“In 2018, that lead evaporates,” the Prophet report said. “It is important to note the local brands still score lower on ‘distinctive inspiration,’ indicating the lack of long-term brand purpose, the lynchpin of loyalty and price premiums.”
The highest ranking retail platform was Taobao (sixth), followed by sister-platform, Tmall (10th). JD.com slotted in at 35th.
In terms of fashion and beauty brands, Adidas was the highest in 14th place, while Estée Lauder was in 22nd — each the only brands in their respective categories of sportswear and cosmetics to be mentioned.
In the case of Adidas, Prophet highlighted its work with China’s education ministry in providing training for Chinese sports teachers, who will then teach soccer skills in schools, as a significant leverage point, in addition to tapping stars like Lu Han and Jackson Yee as faces.
For Estée Lauder, which witnessed a 40 percent year-over-year increase in sales in China in the fourth quarter of 2017, Prophet said the company was perceived as a dependable and trustworthy brand by consumers.
It added that Chinese consumers remain fundamentally practical. The report stated: “Of the four BRI principles — pervasive innovation, customer obsession, distinctive inspiration and ruthless pragmatism — the last pulls the most weight (7 percent more than average). This reflects a basic cultural truth: Chinese want brands that will help them advance in life, products that are means to an end.”
Prophet’s China Brand Relevance Index Top 25
- NetEase Cloud Music
- W Hotels
- China Mobile
- Estée Lauder