Chinese brands may be based miles and miles away, but they could be close to becoming household names in the west.
The Futurebrand Index reorders PwC’s Global Top 100 based on a brand’s ‘futureproof factor.’ It reads almost as a crystal ball of company success, and if you peer into this year’s clairvoyant ranking, it shows a world where Chinese brands can hold a strong global footing.
In 2016, only two Chinese brands ranked in the top 25 of the index; this year’s features six, five of which fall into the financial sector. The one exception is a newcomer: spirits giant Kweichow Moutai vaulted straight into the second spot.
Futurebrand defines a successfully futureproofed brand as one that combines a clear sense of purpose with the ability to deliver a complete brand experience. Jon Tipple, Futurebrand’s worldwide chief strategy officer, explained that Chinese brands – like American brands – benefit from having a large domestic market.
Chinese brands may not replace today’s household names, but they can certainly offer viable alternatives.
“Chinese brands are all built on a distinctive value system that prioritizes the long-term over the short, constant and relentless evolution, respect, harmony and wellbeing,” Tipple said. “They are innately human. While it would be unrealistic to simply transfer these values to the west, a greater consideration for long-term brand strength over short-term performance measures such as sales and cost cutting would hugely benefit western brands.
“Short-termism makes brands banal. Banality kills brands.”
American brands are still leading the index. Thirteen US brands are listed in the top 25, with the Walt Disney Company ranked as the number one brand.
One major hurdle for Chinese companies looking to succeed in the westis the American consumer's strong brand loyalty. Futurebrand president of North America, Simon Hill, explained there is huge latent brand loyalty for national brands. However, the rise of Chinese brands may inspire consumers to be more demanding of the experiences their country’s brands are delivering.
Hill noted that, in general, Chinese brands are taking a patient approach to winning over western consumers.
“We’re definitely seeing positive momentum,” said Hill. “Does that mean they will replace familiar household names outside of China? Probably not on a notable scale anytime soon – most of these brands are not consumer facing and have limited operations in the US.
"But what’s interesting is we’re seeing the patient and intentional approach these brands have used to build favorable perceptions begin to bear fruit in the US.”
Being futureproof is independent of size or global stature. Tipple believes that for brands to thrive they “need positive momentum from the experiences they create or risk falling back,” and consumers will adopt these brands regardless of the country.
“It’s not a question of origin. If a brand is clear about why it exists and delivers on that in clear, transparent – even enjoyable – ways then people will want to buy from, work for and recommend that brand,” he said.
Chinese brands are showing the potential to resonate with people worldwide. With the advancement of globalization and digital interconnectivity, western consumers may be more and more inclined to adopt them across the next decade.
The top 20 futureproofed companies, according to the Futurebrand Index 2018
- The Walt Disney Company
- Kweichow Moutai
- Gilead Sciences
- Abbvie, Inc.
- Nike, Inc.
- Ping An Insurance
- China Life Insurance Company
- American Institute of Architects
- Taiwan Semiconductor Manufacturing Company
- The Boeing Company