The rise and rise of Chinese brands

Each year, Brand Finance, the world’s leading brand valuation consultancy, publishes a report that highlights the 500 most valuable brands globally. This interesting and well researched document is a treasure trove of information and insights. What does this year’s report, published recently, tell us?

Top 10 global brands

On some fronts, there are no surprises. Apple is the world’s most valuable brand, and Tata occupies the top spot in India. These brands occupied the numero-uno positions last year as well. Both these brands have carefully preserved and nurtured the core ideas they stand for, even as they have branched out successfully into new streams of business. There is a lesson here for all marketers on how a brand can retain its sharp identity, while being extended into new areas.

Apart from Apple, the top ten brands in the world include Amazon, Google, Microsoft, Walmart, Samsung, Facebook, ICBC of China, Huawei and Verizon. Two clear trends stand out from this list. First, technology brands continue to dominate, and have become even stronger during the pandemic. In fact, the technology industry is now the most valuable sector in the world. Semiconductor brands such as AMD and Nvidia, which are not so commonly talked about in India, are amongst the fastest growing brands globally. This reflects the rapidly growing demand for their products, as an increasing number of categories, from washing machines to cars, integrate semiconductor technology into their wares.

A second revelation is the dominance of brands from the US and China. With the exception of Samsung, every brand in the top 10 list originates from one of these two countries.

Two-thirds of the total brand value of the top 500 brands globally is attributable to these two nations. Surprisingly, if you look at the top 25 most valuable brands in the world, 11 are now of Chinese origin, compared to only nine brands from the US. It is remarkable how quickly Chinese brands have established respectable positions in many categories and countries, apart from dominating a huge consumer market in their own backyard. Their ability to anticipate specific consumer needs and rapidly scale up their offerings has driven this success. The world’s fastest growing brand is also of Chinese origin, and a name that many of us in India are quite familiar with – TikTok.

TikTok crossed the one billion users mark in 2021, and its brand value has grown by a remarkable 215 per cent over the past year, even though it remains banned in the huge Indian market. Clearly, this app has touched a sweet spot amongst customers everywhere – it offers content that is quick to view, entertaining to watch, and, in some cases, informative as well. Simultaneously, it provides a platform for everyone to broadcast their creative content and achieve a few minutes of fame, thus catering to a deep human desire.

Digital and technology

TikTok also symbolises the growth of a sector that is fast becoming very powerful – media that offers streaming services. Digital- native brands such as Netflix and Spotify, as well as conventional brands which have successfully branched out into digital streaming, such as Disney, have all grown their value handsomely. There is no doubt that the media world is fast moving in this direction, leaving behind conventional media brands which are anchored in cinema theatres or television. Clearly, users are in love with digital and technology. Yet another sector which has used technology to gain rapidly is the retail industry. It is now the second most valuable sector in the world in terms of brand value. Before the pandemic, and also during the first few months of the lockdown, there were many questions raised about whether brick-and-mortar retail brands could survive the onslaught of e-commerce. It is therefore amazing to see how so many traditional retailers have adapted smartly and quickly to the new normal, by building their own powerful e-commerce platforms. Today, they offer consumers a seamless omni-channel experience.

Leading this techno-retailer pack is Walmart, which is now the fourth most valuable brand in the world. Many other supermarkets have followed suit. We see this transformation happening in India too, where prominent retailers are using their wide store network, now topped with the power of technology, to provide consumers easy omni-channel shopping, across stores and online.

Covid powers pharma

A final interesting trend I would like to call out from the Brand Finance report is how pharma brands have grown hugely during the pandemic. Pfizer, AstraZeneca and Johnson & Johnson, all of which developed Covid-19 vaccines, have grown their revenues and brand value significantly. The world owes a debt of gratitude to these companies, which have gained significantly in positive perception over the past year. In India, the stupendous growth and popularity of a simple pharma brand, Dolo-650, which is now used as a first line of home treatment for Covid-19, mirrors this trend. There is no doubt that the pandemic has touched virtually every sector. Industries and brands which have been agile and have adapted quickly to new consumer needs during this period have gained handsomely. That is my biggest takeaway from this excellent analysis by Brand Finance.

Harish Bhat is Brand Custodian, Tata Sons. These are his personal views.

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