Rebalancing

Changing economy creates opportunities for brands big or small

The Chinese economy is exhibiting some new dynamics that are best summarized as rebalancing. These changes will impact brands.

Domestic demand, including investment and consumption, is making a larger contribution to economic growth. Consequently, the contribution rate of net exports is declining. Consumption will gradually play a larger role driving growth, although investment will continue to play an irreplaceable role over the next eight-to-10 years.

In particular, considering the Chinese government's goal of doubling the 2010 per-capita income by 2020, and the continued advance of urbanization, the urban population will make up a huge consumer market in China. Other government initiatives influencing the rebalancing of China’s economy include:

  • Environmental concern: In order to prevent further environmental pollution, China intends to encourage innovation and environmentally friendly manufacturing along with the development of the service sector.
  • Balanced regional growth: China will pay more attention to balancing growth across geographic regions, which means that central and western China will continue to grow at a faster pace than the Eastern part of the country.
  • Adjustment of industries and investment: Domestically, China will endeavor to absorb its excess capacity and promote capacity consolidation in certain industries. Internationally, China will expand its investment overseas and relocate production capacity to other countries.

The impact of rebalancing on brands

The expansion of China's domestic demand, the advance of urbanization and the development of service industries will provide more impetus for big brands and offer new opportunities for novel brands.

The consolidation of industries will facilitate the integration and concentration of brands. The outward investment and capacity relocation will help expand the global reach and influence of brands. The fact that more and more multinational corporations choose to make the Chinese market the center of their operations will also add to the China factor in the shaping of multinational brands.

If we say that the "localization of international brands and the rise of local Chinese brands" was the dominant theme in the last 10-to-20 years, we may also have to consider the "globalization of Chinese brands," the "rise of service brands" and the enhanced brand awareness of government, regional authorities and nonprofit organizations, when forming our vision for the future. Winning the hearts of young consumers in the age of social media will be a technological, conceptual and strategic challenge for all brands.

BrandZ China Top 100 2014

BrandZ China 2014 Report Top 100 Report
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Top 100 Chart
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2014 BrandZ China Top 100 Infographic

BrandZ China 2014 Infographic


Methodology and valuation by Kantar Millward Brown


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