During the 2011 Summer Davos Annual Meeting, Interbrand, the world's largest brand consulting company, announced the 2011 Best Chinese Brand Value Ranking. China Mobile, China Merchants Bank (600036, stocks), Yunnan Baiyao (000538, stocks), Great Wall Motor (601,633, stocks) and other 50 Chinese companies were selected.
According to Interbrand, the publisher of the list, the transformation of Chinese corporate brands from large to strong has begun to highlight the profound impact of brand strategy on companies. The brand has become a new growth engine for Chinese companies. In this regard, the "China Business News (blog, microblogging)" reporter interviewed Interbrand China executive director Chen Wei.
“China Businessâ€: Why do brands have become the new growth engine for Chinese companies? What does the brand strategy mean for Chinese companies?
Chen Hao: You may have noticed that the theme of the Davos Forum this summer is "quality growth." For companies, there are three characteristics in our view of quality growth. One is to go beyond sweatshops, not to win customers with low prices, and we can provide more added value under the same quality conditions. The second is that quality growth must stand up to the test, and when it comes out of market protection conditions, the company can survive. There is also an important performance that can consolidate a group of loyal consumers, so that consumers become fans of this brand, then companies will have long-term competitiveness.
China has been talking about industrial upgrading and enterprise transformation in these years. However, there are many different discussions and attempts to upgrade. We can find that in the field of OEM, future profits will become lower and lower, and the international market will shrink. The wages and raw materials of Chinese workers will continue to rise. What should I do at this time? One of the good ways is to create and manage your own brand. From the perspective of the industry's smile curve theory, the most profitable is the top end, doing R&D, owning patents, and being the lowest brand. These two ends are the most profitable in this industry chain, and the pure profits of the manufacturing sector in the middle may be squeezed a lot. China's industrial upgrading is to go to both ends, and now Chinese companies are upgrading. The thinking for all industries is that I either go up or down, and there is not much in the middle. In this case, the real significance of the brand strategy for the company is highlighted. A good brand has a powerful force and spread. The force is to make the consumer willing to spend 90 yuan to buy this brand when producing 100 yuan consumption, and only 10 yuan is to purchase the product itself. And the brand can win the full trust of consumers.
Therefore, in the process of transformation and upgrading of Chinese enterprises and expansion into foreign countries, the brand strategy has actually become the engine for sustainable and high-quality growth in the future.
“China Businessâ€: In this field, are Chinese companies successful in achieving enterprise transformation through brand strategy?
Chen Hao: At present, there are more and more such examples. But in the future, especially for companies that directly face consumers and want to enter overseas markets, it will become a development direction. For example, in the field of traditional clothing, whether there is a brand effect or not, the difference is very large. The Chinese clothing (000902, stocks) companies to do OEM, a pair of jeans also earned 6 US dollars, and other profits were taken away by upstream foreign brand manufacturers. In the past, Chinese apparel companies invested much more in brands than we thought. For example, like Metersbonwe first to invest in "Transformers", why should we do this? In fact, Metersbonwe already knows that the brand has huge assets. They want to turn themselves into a brand company, and production is outsourced.
This concept is similar to Coca-Cola and ZARA. It owns design and brand, and production is let downstream. This is the real business brand.
China Business Daily: In the past 30 years, an external manifestation of the rapid growth of China's economy has been the rapid growth of Chinese companies. However, from a brand strategy perspective, has Chinese companies reached the stage of a general awareness of brand awareness?
Chen Hao: Different industries have different degrees of awakening. Even within the same industry, they will have different levels of awareness of brand awareness based on their own circumstances. As far as the entire environment is concerned, the less government controls the industry or companies, the less awareness of brand awareness will be achieved with fewer resources. Because there is no dependence, the competitive environment is forcing companies to start thinking seriously about the brand's value in competition. For example, the same banking industry, but many smaller joint-stock commercial banks will awaken and react more quickly than the Big Four in brand awareness.
In our opinion, in terms of the degree of awakening, the first batch of awakening corporate brands should be these brands that are now ready to go overseas. Their awakening is the fastest. There is another group that is directly domestic consumer-oriented brands, such as food, the Internet and so on. They are all direct consumer-oriented and do not have much government background.
"China Business": Prior to Interbrand's annual list of the top 100 global brands, there has been a lack of Chinese companies. In all industries in China, in what areas will the most likely companies in the future be born?
Chen Hao: Comprehensive analysis, the Internet is the most likely. If we see the global brand value rankings, newcomers to the rankings are in emerging industries. Chinese companies may find it difficult to establish first-mover advantage in other areas. However, there is one thing that is good. First, the control and monopolization of Internet applications is much less than that of traditional industries, which can provide opportunities for the latecomers. Second, China has the world's largest population of Internet users and network applications. Therefore, Chinese Internet companies in this field are more likely than other fields to make a huge breakthrough in the creation of global brands. Based on the strong interest of the world in the Chinese market, Internet application companies can fully utilize the characteristics of the web application without boundary to expand the market to the world.
This can also be seen from the domestic list this year. Including Tencent, Alibaba, and Ctrip, the Internet companies' brand valuations increased from 70% to 119% between 2010 and 2011. The performance is very significant and far exceeds those of other industries.
"China Business News": What are the opportunities for Chinese companies to become bigger and stronger in brand strategy?
Chen Hao: The Chinese government has proposed to change the mode of economic growth during the “12th Five-Year Plan†period, emphasizing the overall improvement of the quality of economic growth. Chinese companies will experience a transition from “manufacturing†to “creating,†and the creation of a brand strategy is an important part of “creating in Chinaâ€.
For companies with brand awareness, it is a good opportunity. Regardless of whether it is in the service industry or the production sector, in the “Twelfth Five-Year Plan†period, under the impetus of the government’s promotion and the spontaneous competition of enterprises, Chinese companies’ brand awareness will be greatly enhanced. In the next two or three years, we will soon see this change.
According to Interbrand, the publisher of the list, the transformation of Chinese corporate brands from large to strong has begun to highlight the profound impact of brand strategy on companies. The brand has become a new growth engine for Chinese companies. In this regard, the "China Business News (blog, microblogging)" reporter interviewed Interbrand China executive director Chen Wei.
“China Businessâ€: Why do brands have become the new growth engine for Chinese companies? What does the brand strategy mean for Chinese companies?
Chen Hao: You may have noticed that the theme of the Davos Forum this summer is "quality growth." For companies, there are three characteristics in our view of quality growth. One is to go beyond sweatshops, not to win customers with low prices, and we can provide more added value under the same quality conditions. The second is that quality growth must stand up to the test, and when it comes out of market protection conditions, the company can survive. There is also an important performance that can consolidate a group of loyal consumers, so that consumers become fans of this brand, then companies will have long-term competitiveness.
China has been talking about industrial upgrading and enterprise transformation in these years. However, there are many different discussions and attempts to upgrade. We can find that in the field of OEM, future profits will become lower and lower, and the international market will shrink. The wages and raw materials of Chinese workers will continue to rise. What should I do at this time? One of the good ways is to create and manage your own brand. From the perspective of the industry's smile curve theory, the most profitable is the top end, doing R&D, owning patents, and being the lowest brand. These two ends are the most profitable in this industry chain, and the pure profits of the manufacturing sector in the middle may be squeezed a lot. China's industrial upgrading is to go to both ends, and now Chinese companies are upgrading. The thinking for all industries is that I either go up or down, and there is not much in the middle. In this case, the real significance of the brand strategy for the company is highlighted. A good brand has a powerful force and spread. The force is to make the consumer willing to spend 90 yuan to buy this brand when producing 100 yuan consumption, and only 10 yuan is to purchase the product itself. And the brand can win the full trust of consumers.
Therefore, in the process of transformation and upgrading of Chinese enterprises and expansion into foreign countries, the brand strategy has actually become the engine for sustainable and high-quality growth in the future.
“China Businessâ€: In this field, are Chinese companies successful in achieving enterprise transformation through brand strategy?
Chen Hao: At present, there are more and more such examples. But in the future, especially for companies that directly face consumers and want to enter overseas markets, it will become a development direction. For example, in the field of traditional clothing, whether there is a brand effect or not, the difference is very large. The Chinese clothing (000902, stocks) companies to do OEM, a pair of jeans also earned 6 US dollars, and other profits were taken away by upstream foreign brand manufacturers. In the past, Chinese apparel companies invested much more in brands than we thought. For example, like Metersbonwe first to invest in "Transformers", why should we do this? In fact, Metersbonwe already knows that the brand has huge assets. They want to turn themselves into a brand company, and production is outsourced.
This concept is similar to Coca-Cola and ZARA. It owns design and brand, and production is let downstream. This is the real business brand.
China Business Daily: In the past 30 years, an external manifestation of the rapid growth of China's economy has been the rapid growth of Chinese companies. However, from a brand strategy perspective, has Chinese companies reached the stage of a general awareness of brand awareness?
Chen Hao: Different industries have different degrees of awakening. Even within the same industry, they will have different levels of awareness of brand awareness based on their own circumstances. As far as the entire environment is concerned, the less government controls the industry or companies, the less awareness of brand awareness will be achieved with fewer resources. Because there is no dependence, the competitive environment is forcing companies to start thinking seriously about the brand's value in competition. For example, the same banking industry, but many smaller joint-stock commercial banks will awaken and react more quickly than the Big Four in brand awareness.
In our opinion, in terms of the degree of awakening, the first batch of awakening corporate brands should be these brands that are now ready to go overseas. Their awakening is the fastest. There is another group that is directly domestic consumer-oriented brands, such as food, the Internet and so on. They are all direct consumer-oriented and do not have much government background.
"China Business": Prior to Interbrand's annual list of the top 100 global brands, there has been a lack of Chinese companies. In all industries in China, in what areas will the most likely companies in the future be born?
Chen Hao: Comprehensive analysis, the Internet is the most likely. If we see the global brand value rankings, newcomers to the rankings are in emerging industries. Chinese companies may find it difficult to establish first-mover advantage in other areas. However, there is one thing that is good. First, the control and monopolization of Internet applications is much less than that of traditional industries, which can provide opportunities for the latecomers. Second, China has the world's largest population of Internet users and network applications. Therefore, Chinese Internet companies in this field are more likely than other fields to make a huge breakthrough in the creation of global brands. Based on the strong interest of the world in the Chinese market, Internet application companies can fully utilize the characteristics of the web application without boundary to expand the market to the world.
This can also be seen from the domestic list this year. Including Tencent, Alibaba, and Ctrip, the Internet companies' brand valuations increased from 70% to 119% between 2010 and 2011. The performance is very significant and far exceeds those of other industries.
"China Business News": What are the opportunities for Chinese companies to become bigger and stronger in brand strategy?
Chen Hao: The Chinese government has proposed to change the mode of economic growth during the “12th Five-Year Plan†period, emphasizing the overall improvement of the quality of economic growth. Chinese companies will experience a transition from “manufacturing†to “creating,†and the creation of a brand strategy is an important part of “creating in Chinaâ€.
For companies with brand awareness, it is a good opportunity. Regardless of whether it is in the service industry or the production sector, in the “Twelfth Five-Year Plan†period, under the impetus of the government’s promotion and the spontaneous competition of enterprises, Chinese companies’ brand awareness will be greatly enhanced. In the next two or three years, we will soon see this change.
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