Chinese consumers find IKEA, BMW and Nike less relevant to them now. Local brands now constitute the majority of the 2018 China Brand Relevance IndexTM (BRI) by Prophet, a global brand and marketing consultancy.
Prophet conducted a survey measuring “relevance” of brands to consumers by its four BRI principles – pervasive innovation, customer obsession, distinctive inspiration and ruthless pragmatism. The survey included views from over 13,000 Chinese consumers on 249 brands across 30 industries.
The latest BRI reveals, in 2018, the top 10 most relevant brands in China are Alipay, Android, WeChat, Huawei, Microsoft, Taobao, Intel, Meituan, QQ and Tmall. Two years ago, 32 of the Top 50 brands were multinational (MNC) brands. Today, 30 are from China.
The weakest MNC brands fell from the top-notch include IKEA went from the 4th last year to the 37th this year; Nike from the 6th to the 44th, and BMW from the 8th to the 46th.
For the first time, the rise of local brands is fueled by innovation, not basic price/value reassurance. Several local brands beat MNC brands in being ‘‘pervasively innovative’.
The report shows that Chinese consumers have become more strategic in their purchase. They increasingly value meaningful and tangible innovations of home-grown Chinese brands and appreciate enriched lifestyle experience through content.
Meanwhile home-grown Chinese brands have demonstrated a strong ability to create continuous, tangible innovation, often outpacing that of their international competitors.
Leon Zhang, partner at Prophet, co-author of the China Brand Relevance Index said, “Undoubtedly, relevance with consumers is fundamental in building a strong brand. This year, we are glad to see more home-grown brands making striking progress in being pervasively innovative while remaining ruthlessly pragmatic. However, global brands still play a leading role in ‘distinctive inspiration’ and ‘customer obsession’.”
He added that in-depth understanding of customers is still the key that helps decide the focus of brand-building, whether the brand strives to take its advantages to the next level or offset its weaknesses.
Technology and tech-enabled relevant customer experience undoubtedly are the key drivers in building relevance in China. The Top 10 and over half of the Top 50 brands are technology or tech-enabled brands.