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Chinese companies jump above European rivals on FutureBrand Index 2016 but still lag on trust

Source: FutureBrand

Source: FutureBrand Index 2016

Chinese brands have risen aggressively on the FutureBrand Index of the world’s most powerful brands this year, but are still hampered by a lack of trust among consumers who are less willing to buy or work for companies from China than their Western rivals.

The strength of the 10 Chinese brands that feature in the annual perception index of the world’s biggest companies by market capitalisation rose by 8% year on year – higher than the global average of a 2% rise – while the perception strength of European and non-Chinese Asian firms such as Samsung and Toyota dropped (see table, above).

“A few years ago, people were talking about the opportunity in china, and the scale of that opportunity. The discussion has shifted towards the success that Chinese brands are having,” commented Richard Curtis, the CEO of FutureBrand Southeast Asia and Australasia, using Alibaba as an example of a Chinese global brand now spoken of in the same terms as those from the West.

But while the general perception strength of Chinese brands has jumped above that of European rivals, it is lower than the global average, and Chinese brands are generally less well trusted than brands from anywhere else, according to FutureBrand’s data.

China’s brands have a trust rating of 25%, below the global average of 28%, 29% for American brands and 27% for European brands. Also, the level of trust people have in Chinese brands slipped by 3% year on year, a break in the overall trend of rising trust in Chinese brands that has grown by 39% between 2014 and 2016.

Asian brands performed best on the measure of which companies consumers would consider working for, but both Chinese and Asian brands are, on average, regions people are least likely to buy products from.

Source: FutureBrand

Source: FutureBrand Index 2016

Ping An is China's top ranked brand; Source: FutureBrand

Ping An is China’s top ranked FutreBrand Index 2016 company

The perception of all the Chinese brands in the FutureBrand Index rose year on year with the exception of Bank of China and Tencent, which both fell fractionally.

The biggest risers were China Life, China Construction Bank and Sinopec. The top ranked Chinese brand was insurer Ping An, which is positioned in 17th place.

Reflecting on the Ping An’s performance, Johnson Gu, FutureBrand Greater China’s ECD, commented that the company’s growth has been “fuelled by their determination to make traditional financial services ‘simple, fun and easy’, delivered through an integrated experience”.

On Tencent, Gu said WeChat, the company’s star brand with more than 600m users, should take credit for much of Tencent’s growth in brand perception over the past few years, but future growth “will likely rely on its ability to identify its next growth point, beyond WeChat”.

The key global trends to emerge from the FutureBrand Index this year are the shift from brand purpose to customer experience among the world’s biggest companies, and a shift in focus from technology to consumer services.

Source: FutureBrand India

Nike LVMH L'OrealFutureBrand’s Curtis pointed to the likes Nike, LVMH and L’Oreal as examples of mature consumer goods companies that have flourished after undergoing digital transformation. Technology companies such as Facebook and IBM, meanwhile, have risen up the FutureBrand Index, but not as sharply.

“The technology pioneers appear to be yielding ground, relatively speaking, to the likes of Nike, LVMH and L’Oreal – strong brands from mature organisations that have invested strategically in technology to support growth through seamless brand experiences for the a connected future,” he said.

“Behind this shift is a trend away from ‘purpose’ towards the more tangible attributes that comprise ‘experience’ – specifically, consistency, resource management and seamlessness.”

FutureBrand Index

“That’s not to say that purpose is not powerful, quite the contrary,” Curtis added. “It’s no accident that those successful consumer brands highlighted have very powerful statements of organisational purpose that they are now converting into connected brand experiences for their customers”.

At a sector level, financial services firms have bounced back in the Index, after a bruising period that followed the financial crisis, while healthcare brands have weakened.

On the healthcare sector, Curtis commented: “There’s a good deal to be learned from service-based organisations about how to design and deliver better connected healthcare brand experiences. This is a sector with massive commercial opportunity, but few have succeeded in tapping their full potential, something I expect to see change dramatically in the near future across the world, not simply the region.”

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