The Chinese Dream
Contagious attended the launch of BrandZ's latest reports on China: 'The Power and Potential of The Chinese Dream' along with the 2014 BrandZ™ Top 100 Most Valuable Chinese brands. The reports are based on original research by WPP companies, including research agency Millward Brown.
The Rt Hon Michael Fallon MP, Minister of State for Business and Energy, spoke about China’s transition from being an export and investment-led economy to one that is consumer-led and stated how important this is for UK business.
Next up was Martin Sorrell, WPP's CEO. ‘The Chinese economy is not emerging, it’s merged’ said Sorrell. He highlighted Chinese local brands as benefitting from great awareness and distribution, but lacking customer loyalty. By contrast, foreign brands in China suffer from poor awareness and distribution, but retain great loyalty amongst their Chinese consumers. Foreign brands’ price points are too high, while home-grown brands are too cheap. When it comes to local and foreign brands in China, ‘there is a battle taking place’ said Sorrell.
Professor Peter Nolan of Cambridge University then enlightened the audience about how the Chinese see Britain and its history. According to Nolan, the Chinese wonder why they didn’t have their own version of our industrial revolution and why they chose not to colonise and the British did. European history appears to be very violent and war-torn to the Chinese and their bureaucratic military operates differently to the British.
Millward Brown's Doreen Wang followed, presenting key statistics from the BrandZ Top 100 research of the most valuable Chinese brands. The top brands 10 in the study, including Tencent, China Mobile and Baidu achieved almost 100% growth in their stock market performance over past four years, while the top 50 had more than 30% growth. 71% of the brands in the top 100 were launched after the Chinese reform in 1978.
Wang introduced presentations from three of the top 100 companies, including Hisense, China’s no1 TV brand (also a manufacturer of fridges, smartphones, tablets and air conditioners), Mengnui, the leading dairy brand in China, and China's answer to Expedia, Ctrip. Former hotel group founder and Ctrip's chairman Mr Ji Qi belives that his success was down to the immense opportunity offered by the population of China (Ctrip was founded in 1999 and is currently worth $718m).
David Roth, CEO of The Store WPP, FITCH Chairman and CCO Tim Greenhalgh and Doreen Wang then wrapped up, sharing ideas on the 'Chinese dream'. Roth discussed how citizens' dreams and aspirations in China had previously involved the State, whereas the current dream is more focussed on the individual. Wang said that from their research, 70% of Chinese were confident that the dream will be realised. However, 85% showed concern for environmental damage and 83% for food safety. Greenhalgh discussed the country's love of shopping and recommended that brands help consumers ‘indulge in idle fantasy’ because the Chinese want to dream. He also explained that there is a perfect balance in China between online and in store retail: the Chinese don’t see the physical and digital as divided.
Lord Wei of Shoreditch concluded the event. ‘As China slows down is it game over? No, by no means. There is a slower momentum but greater emphasis on quality’. He finished by calling for UK business to reflect: at what point will we start to see Chinese dream as part of our dream? How should we react and how do we work together?