Chinese brands need to take a long-term view of their place in the global marketplace. They are very good at disrupting from the affordable end of a category due to their value proposition. They come in at a low price and often knock out the competition. 

However, for them to improve their profit margins in the longer term, and to extend the offering to services, which are always more profitable, the next big question for global Chinese brands is to see how they could charge their global consumers a premium by moving up the value chain. This is very challenging, especially since the big global players as well as other local champions usually have better local insights and are therefore perceived as having higher relevance to the local market.

Chinese brands, quite naturally, are primarily focused on building scale. There’s nothing wrong with building a business—that’s where your profit margins are—but to go global successfully, they need to be investing in brand building too. The risk is that when there is a gap between innovations, while the next big thing is in development, customers will simply go somewhere else if their only connection is with a business, rather than a more meaningful link with a brand.  

Brand, and the love of brand, is the important thing that holds the customers close to the business and keeps people coming back. And only a brand can enable a business to charge premium. At some point, they need to turn to purpose expressed though brand. What do they stand for and how do they make a difference to your life, as opposed to ‘it’s got great battery life’.

Great and small  

The Chinese brands proving most adept internationally are those that use communications to project the image of a global brand, rather than a Chinese brand going abroad. They strike a globally resonant tone and use globally relevant media channels to deliver an emotion-based rather than product-based message.  

Specifically to Alibaba’s “The Greatness of Small” brand campaign to mark its sponsorship of the Olympics, which draws parallels between individuals’ sporting achievements and the power of small businesses when given the right support.  DJI also stands out for its clever use of Instagram, not just to showcase its own videos and photos, but also to encourage users of its drones to hashtag their own footage–free marketing for the brand as well as creating a community. 

The new generation of Chinese businesspeople is increasingly wise to the long-term value of building a brand alongside building a business. Young entrepreneurial people… they understand brand is the name of the game.

This article was first published in the BrandZ Top 100 Most Valuable Global Brands Report 2019. 

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