China to become centre for 'various disruptive changes' in business as its digital, mobile and tech sectors grow, claims WPP's Sir Martin Sorrell
China will be the centre of "various disruptive changes" as the country develops a better understanding of digital, social and mobile trends, WPP CEO Sir Martin Sorrell has stated while discussing the latest BrandZ rankings.
The research, published by WPP and conducted by research firm Millward Brown, reports on China's most valuable brands, this year listing the top 100 for the first time, rather than the regular top 50 brands.
Top of the list was China Mobile at $61.4bn, followed by Industrial & Commercial Bank of China at $39.7bn and then Tencent at $33.9bn.
The combined brand value of the top 10 brands was found to be over $250bn, yet most people in the west have never heard of them, according to Sir Martin, who listed five thoughts on his LinkedIn account.
Those points included the domination of technology, telecoms and banking brands on the list and his belief that the country's tech industry was on a par with the rest of the world, citing its main search engine Baidu as one example of success.
"Given their phenomenal scale and growth, and the convenience of their platforms, these tech players are well placed to disintermediate the traditional banks in much the same way that Amazon has disintermediated traditional retailers," he wrote. "Many believe that physical retail banks will soon become little more than showrooms, with the real business conducted almost entirely on mobile devices."
He went on to highlight the "amazing" growth of mobile within China, citing China Mobile, which topped the list, and its 750 million subscribers as a case in point and WPP director and Venture Capitalist Hugo Shong as a person to watch in the space.
He insisted that Chinese stereotypes were now out of date, especially the "persistent myth that all Chinese companies" stole intellectual property and that the understanding of developing digital sectors was becoming "increasingly innovative" while driven by consumer demand.
"Chinese companies often have a better understanding of trends in digital, social and mobile, for example, than Western counterparts, and are becoming increasingly innovative in their approach," he claimed and cited smartphone business Xiaomi as an innovative business model.
"Xiaomi is forging its own path. Its business model relies not on handset sales but ongoing services to the user, such as accessories and apps, and it has recently launched a TV box. The company also incorporates the views of customers into design and software development, releasing an update every week based on feedback from its core user base. As The Economist has pointed out, a far more democratic approach than that of its US competitors."
He concluded by stating that Xiaomi was one example of a growing trend that was likely to see China become "the origin of various disruptive changes in the current structures of global business – and challenge many a complacent Western assumption in the process".