China 2015: MARKET DYNAMICS | Innovation
Technology and retail – categories comprised primarily of market-driven brands – produce the brands that Chinese consumers view as most innovative and creative.
Among the factors driving innovation and creativity are: increasing demand from more sophisticated and better informed Chinese consumers; and increasing market competition, driven in part by liberalized economic policies.
Innovation is especially apparent in the intersection of technology and retail, in ecommerce and in mobile payments, for example, where Chinese brands collaborate to create seamless online and offline experiences and apps that move a lot of daily Rank activity, such as banking, from physical locations to smartphones.
Chinese consumers describe Chinese technology brands and retail ecommerce brands as creative, not a characteristic they normally associate with Chinese brands, which they’re more likely to label wise or straightforward.
Creativity adds a dimension that enables Chinese technology brands to compare favorably in brand value with global brand leaders. Tencent is number five – after Google, Apple, IBM and Microsoft – among the technology category brands ranked in the BrandZTM Top 100 Most Valuable Global Brands 2014. Baidu, the China’s search leader, is number eight, just after Facebook and before Samsung.
During the past few years, the brand value of Tencent has grown at a faster rate than the brand value of Facebook, to which
it’s often compared. Between 2014 and 2011, when Tencent
first appeared in the BrandZTM Global Top 100, its brand value appreciated 254 percent to $53.6 billion. During the same period, Facebook increased 87 percent in brand value to $35.7 billion.
BrandZTM ranks Alibaba and Amazon in the retail category. With its recent IPO (Initial Public Offering), Alibaba is approaching a brand value that took Amazon over a decade to achieve. Alibaba reached a brand value of $59.7 billion in the BrandZTM Top 100 Most Valuable China Brands 2015, compared with Amazon’s $64.3 billion brand value in the BrandZTM Global Top 100 2014.
Alibaba also improved its score in the three BrandZTM components of brand equity: meaningful (meeting functional and emotional needs), different (being seen as unique) and salient (coming easily to mind as a vibrant brand). Brand equity is the inherent power of the brand that predisposes a consumer to choose it.
Most important, Alibaba is seen as meaningfully different from the competition, a competitive edge that Chinese brands often lack. Tencent also scored high on these three BrandZTM components of brand equity.