As big-name advertisers look to extend household favorites outside of the U.S., a recent study by AlixPartners revealed that in China, consumers actually prefer domestic brands to foreign brands.
Four of the "most trusted" brands in AlixPartners'
China Brand Power Index were mainland-made. They are Haier (consumer durables), Hearttex (home goods), Tsingtao (alcoholic beverages) and Master Kong (nonalcoholic beverages). This trumps the longtime belief that the Chinese have traditionally looked to overseas goods for their foreign appeal.
Olay, Nike, Safeguard and Sony—all foreign brands—rounded out the list.
AlixPartners conducted the study by asking 5,000 consumers to evaluate each sector based on five marketing preferences: product, price, service, store/ in-store access and shopping experience. In five of the eight categories, product was most important, followed by service. In home products and technology and consumer durables, service was most important.
A similar study conducted by AlixPartners in the U.S., however, showed that consumers were more concerned with price over service. For marketers, this means growing their brands overseas requires more than replicating an at-home model.
"[The findings show] that what is important to a brand or consumers in the U.S. is different from what is important to consumers in Asia," said Matt Katz, managing director of the firm's New York office.
"Just as the financial crisis has likely reshaped the financial world globally, China's power with respect to its ties to domestic brands will likely reshape the global view on brands," Katz added.
Other regional differences also were apparent in the study. While Chinese consumers trust brands over retailers, in North America, the reverse is true. And while marketers in the U.S. have recently started embracing the viral capabilities of social media like Facebook and Twitter, in China, television and word-of-mouth still carry the most weight.
Mary Bergstrom, founder and owner of
The Bergstrom Report, which analyzes Chinese consumer trends, said nationalism is fueling the rise of domestic brands.
"What we are finding, in a post-Olympics China, is a new wave of trends that make doing business with China more competitive while at the same time making the consumer more appealing," said Bergstrom. And Chinese marketers of late have become savvier at marketing, designing and promoting their own brands, she said.
Andy Wilson, who heads up planning at ad agency BBDO's Singapore office, said ultimately it all comes down to quality and not nationalism, as well as the longevity and reputation of a brand. He said, "As with any market, brands that have been around and have invested for many years, generate more familiarity and trust, and this is coming through in the specific brand choices."