Some insights that can be taken from the BrandZ Top 100 Chinese brands study (discussed in this post) can tell us about the Chinese market and how consumers are interacting with brands.

Looking at the top Chinese companies, they are among the biggest in the world, with a combined brand value of more than $250 billion, but most in the West know little or nothing about them (yet).

Here are five things that we can take form the report to draw a larger view of the Chinese market:

1. Technology, telecoms and banking brands dominate

Seven of the top ten brands are financial institutions, tech companies or telecoms providers. Looking at the top 100, the banks have a collective brand value of $114 billion, telcos $74 billion and tech businesses $60 billion.

Each of these three dominant sectors is developing rapidly, as China’s industrial revolution drives financial, social and behavioural change on a massive scale. The web is bringing them into ever-closer proximity – and convergence happens pretty fast in a country with an online population approaching 600 million.

2. China’s tech businesses already stand toe-to-toe with the global giants

Baidu, which operates almost exclusively in China, processes more than five billion search queries every day. This is on a par with Google’s global figure.

Tencent’s WeChat messaging service, launched only two years ago, is now used by around 400 million people – and continues to grow exponentially. Tencent’s revenues and profits are greater than Facebook’s.

And in China, where more than half the population is yet to go online, the digital explosion is only just beginning. And most of it is happening on local platforms– which is where foreign brands also need to be.

3. Chinese tech companies want to be banks, too

Baidu isn’t just China’s Google. It’s Google plus Amazon, and now it’s moving squarely into the territory of the banks as well, as the latest tech player to offer users financial services. Deposits to new wealth management service, Baidu Wallet, reached their limit of one billion yuan within five hours of the service launching a few weeks ago.

Transaction platforms are increasingly important to the tech companies, which already have online payment systems and even offer loans. According to Reuters Breaking Views, Alibaba is the biggest threat to the banks: by July this year it had made short-term loans totalling more than $16 billion to businesses selling merchandise on its sites. Both it and Tencent are reported to have applied for banking licences in the last few months.

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.

With this in mind, brands must integrate their consumer experience in these platforms.

4. The scale of mobile is incredible

A banal observation perhaps, because in every respect China is a land of very big numbers, but the scale of mobile usage is worth reflecting on for a moment.

China Mobile, which tops the BrandZ list with a value of $61 billion, has 750 million subscribers, making it the largest mobile provider on the planet.

Significantly, mobile has already overtaken the desktop as the primary means of accessing the web. Official estimates suggest that three quarters of China’s 591 million internet users access the web via mobile devices. In 2012 the Chinese bought 213 million smartphones, a figure that is expected to rise to 360 million this year.

For marketers, this means China (the world’s largest smartphone market) is the place to watch: a penetration of 400 million smartphones could be the tipping point when mobile advertising comes into its own.

5. Chinese business stereotypes are out of date

There’s a persistent myth that all Chinese companies are all copycats. This is a lazy stereotype and well past its sell-by date.

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. This innovation is driven by huge demand from consumers – as demonstrated by the presence of so many fast-growing tech and telecom companies in the BrandZ rankings.

 

To add a notable example not on the list: smartphone business Xiaomi (a private company and therefore not eligible). Its CEO Lei Jun is often referred to as the Steve Jobs of China (a moniker he dislikes), the company has been accused of copying Apple, and it has an Android-based operating system.

In truth, though, 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.

Xiaomi launched its first Mi smartphone in October 2011. At $10 billion, after only three years, the company is worth more than Nokia’s handset business and has recently overtaken Apple’s market share in China.

Xiaomi is just one example of a growing trend, a trend that will 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.

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