Brands, Retail, Technology (and more) by David Roth
Have had many requests for a copy of the just published BrandZ Top 100 Most Valuable Chinese Brands 2015. So just click here or on the image above and you can download the entire report. Hope you find it insightful and enjoy the great pictures by Cecilie Østergren.
Here are the highlights of the BrandZ Top 100 Most Valuable Chinese Brands data in this innovative infographic designed by Kay Blewett. Thanks Kay…
The value of the BrandZ Top 100 Most Valuable Chinese Brands increases 22% year on year. A new No.1 brand and a new No.2 brand..Take a look at the video countdown to see all 100 brands.
Christmas and Boxing Day are fast merging. Just look at the above from London’s Oxford Street. It’s a retail trend that is cutting across all holiday events. Getting in early… the art of the retail pre-emptive strike.
One of my predictions for retail in 2015 is the growing importance of O2O (online to offline) across the world for retail especially in China – now the world’s largest eCommerce market. We will be seeing more use of digital and physical retail assets being interrelated and at holiday times getting ahead and locking in consumer spending.
Todays press ads from John Lewis and Currys- PC World in the UK (below) are an example of how getting in early and O2O are manifesting themselves. The Boxing Day sales starting virtually on line even before the Christmas turkey has even been defrosted let alone put anywhere near the oven and then moving later into physical spaces. We will be seeing a lot more of this in 2015.
Thank you for reading my blog during the year and for all your comments and feedback, it is much appreciated.
Happy Holidays to you all.
David
Well it’s almost 2015 and in January we will be launching the BrandZ Top 100 Most Valuable Chinese Brands 2015…
To Deliver Data Insight data is of course one of the most important and also complex keys to the retail castle. There are massive amounts available from ‘likes’ and ‘wants’ to shopping patterns and the Chinese consumer is constantly inputting data to social discussions, chats and review sites. However, for some time the burning question has been how to extract relevant and usable data for a brand. In the Year of the Horse, we foresee gaming will become a major part of the plan. Consumers in China love the novelty of gaming and we know they will provide information if asked. The ability to ‘gamify’ users’ experience with a brand to get the best quality consumer feedback has proved to be one of the most powerful forms of information gathering, and we expect to see this gain real traction and begin to drive brand behaviour. Social media has given us some insight into the users’ experience but none has engaged, connected or interacted with consumers in the way gamification has proved itself able to. There is no doubt that eliciting meaningful data is of the utmost importance in driving growth for brands and that gaming will play a key part in the process for smart brand owners and retailers.
Luxury has been a common theme in china’s recent retail history. From the Chinese going abroad to buy, Hong Kong as a luxury goods market and every global luxury and premium brand finding a home in the ‘high streets’ and top class malls of China, luxury is seen as more than a status symbol; it is the evaluation of the elite and the definition of the ladder of success. The hunger for luxury is, indisputably, one of the most defining features of the rising middle class and new Chinese generation. It was only a matter of time before we saw the emergence of home grown luxury brands and we envisage them gaining traction in the Year of the Horse – the ability to mix national pride, artisan skills and high-end luxury is an unbeatable formula in China. In our opinion, this segment will take time to build as the mindset of ‘foreign = better’ is still entrenched but we nonetheless believe it will continue to grow and result in the formation of some very strong, innovative Chinese luxury brands. We expect to see these starting to assert their place in Chinese decadence and also emerging as global players within the luxury market. Having watched the creation of Chinese brands in the toughest of conditions locally, we have no doubt that if they can establish their presence overseas, they will significantly strengthen their position within the minds of local Chinese. This is a long road and the Year of the Horse will be an important staging post in the journey.
As success outside ‘traditional’ bricks and mortar retailers continues, we anticipate increased pressure on manufacturers to conjure up growth. This is most likely to be achieved through a combination of basic marketing principles and decreasing costs in the system which, in turn, will demand greater sophistication in retail execution and sales forces across China. However, this kind of expertise and culture is not developed overnight, and it’s reasonable to speculate that specialists in this area will start taking over from the distributors that typically undertake this function. This does not bode well for these distribution companies that, until now, have had significant power – handling everything from the book, to the movement of physical stock, to in-store dealings. All this has been done with very little visibility for the brand owner, but as growth was so good, everyone was happy. Now, with the slowing in retail sales, we predict that a laser-sharp focus will be on delivering growth at lower cost. What will this mean? More science in field sales operation, better technology to drive execution, and complete visibility for the brand owner in terms of what it is paying for. All of these demands present a very real problem for distributors that are currently not geared for this level of in-store implementation. Don’t be surprised if there’s a sudden growth of outsourced sales force specialists, and an increase in the standard of in-store execution as a consequence.
You can safely assume that local retailers will continue on their path of extraordinary evolution to becoming world class. Undoubtedly, they will become more sophisticated in their deployment of systems, stricter in their management and begin to deliver better value than the international retailers currently fighting for market share inside China. Local retailers, either national or region-specific, are already starting to outstrip their international counterparts and in the Year of the Horse you can expect this to accelerate, with geographic expansion and increased output through existing sites. Local retailers already have the ability, through multiple means, to extract more profit from their locations, with the added advantage of ‘neighbourhood’ knowledge and connectivity. As they absorb elements of global retailing best practice, we forecast an ever-improving performance.
As e-commerce continues to develop fast, so too will the ability of Chinese consumers to bank via mobile platforms. we’re already seeing this happening in multiple ways, from street vendors processing credit cards via their android tablets, to e-commerce companies like Alibaba offering their consumers small savings accounts, to phone-to-phone SMS transfers. Tencent (China’s largest internet portal) has started offering customers a banking platform and with its 400million+ users, it’s destined to have a big impact. In the Year of the Horse we’ll witness consumers being able to use, share and spend money faster and more easily, leading to more transactions in more locations. This is good news for small businesses that have previously been constrained by payment issues, and might well regenerate the steadily shrinking small, informal trader. Just imagine how the ability to transfer a relatively small sum of money with a simple cellphone connection will enable transactions that were simply impossible in smaller rural areas. We expect to see points of purchase springing up virtually anywhere – not just in markets, but even on the most remote street corner. Such is the growing power of digital and peer-to-peer banking.