Brands, love and trust in new markets
There's a good short piece in by Ratan Malli in this month's Admap (subscription required). Called 'Passive Chinese', the gist of it is that 'Chinese consumers are brand-loyal because they are reluctant to try something new, not because they actively love the incumbents'.
The article runs through some of the reasons for this, most of which boil down to reassurance. China is the land of dodgy brands. For years this has been a bit of a badge of pride: there's even a fake brand mall in Nanjing, apparently. But Chinese shoppers are starting to get nervous about the downside of the laissez-faire approach to product safety, what with the melamine-contaminated baby milk deaths and the Sprite mercury poisoning affair. So big, established brands represent a lower risk of you turning green and keeling over.
I have two slight queries about the article. The first is that it implies a sort of Chinese exceptionalism, comparing China to Taiwan, Korea and Japan. For the region, I think it's right, but the explosive growth of consumerism happening in China is better compared with what's happening in Africa right now, not with China's better-developed neighbours. The analysis rings true for a lot of African countries, where freewheeling consumerism and the relative novelty of packaged goods is also leading to worries about safety. Big brands benefit because they represent marks of trustworthiness, but that means they have to work hard to make sure their products are consistently high-quality and to combat the booming market for fake branded goods. If you're a brand trading in the South African mass market, for example, the anti-illicit drive is not just about protecting intellectual property, it's about stopping fake products from killing people in your name.
The other slight query is with the assumption that the natural driver of brand loyalty is love. ('Chinese consumers are brand-loyal because they are reluctant to try something new, not because they actively love the incumbents.') I'm a bit sceptical about this implication in an otherwise great piece. Brand love, let's be honest, is a slightly unnatural state compared to brand trust. The kind of lifestyle identification (etc.) that forms the basis of 'love' for brands only really means anything when your potential customers are safe and secure enough that they can devote time to wondering which brand of bathroom cleaner says most about them as a person. For markets where most consumers are a fair way down Maslow's hierarchy, the idea of actively loving a brand can seem a bit far-fetched.
# Alex Steer (16/09/2010)