Local brands are gaining relevance among Chinese consumers, according to a new report from RTG Consulting Group. 2017 RTG Brand Relevance Report revealed a trend toward Easternization in China as Chinese brands across several industries resonate with consumers, notes Angelito Tan Jr., CEO of RTG.
“The rising influence and relevance these brands have on Chinese consumers cannot be overlooked. This may have a significant impact on the overall brand market landscape in the near future,” Tan says.
The report is based on a survey of 5,000 consumers in Shanghai, Beijing, Guangzhou, and Chengdu, as well as qualitative interviews with 45 China industry experts and select consumers. It covers nine industries, finding the most relevant brand in each industry:
The rising influence and relevance these brands have on Chinese consumers cannot be overlooked. This may have a significant impact on the overall brand market landscape.—Tan
1. Fashion I ADIDAS
2. Food & Beverage I YILI
3. Beauty I ESTEE LAUDER
4. Personal Care I REJOICE
5. Mobile App I WECHAT
6. Hospitality I FOUR SEASONS
7. Automobile I VOLKSWAGEN
8. Electronics & Tech I HUAWEI
9. Luxury I CHANEL
“This is an interesting time for brands,” says Marc-Oliver Arnold, Chief Strategy Officer at RTG. “Brands are expanding and targeting up-and-coming niche trend markets, capitalizing on emerging trends to quickly head that sector. Brands like adidas, WeChat, and Huawei are key examples of the effectiveness of this strategy. To succeed, brands need to move at the speed of modern China’s cultures and subcultures.”
- In the Fashion sector, global sportswear brands maintained their dominance, with adidas and Nike winning the top spot for Generations Z and Y, respectively. adidas performed especially well among brands of all categories and respondents of all generations, earning top marks in key metrics like passion, leadership and consistency. The brand has accomplished this by setting up large-scale distribution in lower tier cities while pursuing inventive marketing strategies that endear it to different subcultures, especially among Chinese Millennials (Gen-Z).
- While international fashion brands enjoyed strong growth, up-and-coming local brand HLA saw a meteoric rise to number four in the overall fashion rankings, topping the rankings for most relevant fashion brand among China’s Generation X.
- In the Mobile App sector, WeChat continues to dominate. Only one international mobile app, Amazon, made it in to the top 20. The biggest surprise, however, comes from the fall of Apple in the Electronics & Tech sector. After scoring most relevant in Electronics & Tech in 2016, the brand fell to the sixth spot for 2017, while local brand Huawei tops the ranking thanks to strong momentum with Chinese Millennials (Generations Y and Z).
- In the Food & Beverage sector, the biggest winner is local brand YiLi, who scored high in authenticity, passion, dynamism, trustworthiness, leadership, and social responsibility. YiLi is making an increasingly significant impact both domestically and overseas, which is especially impressive given the melamine scandal of 2008.
- The only sector where local brands did not experience significant growth is Luxury. Of the top 20 most relevant brands, none are local Chinese. Chanel ranked highest for China’s Generations X and Y, and second for Generation Z, who ranked Dior as their favorite for Luxury.