EMERGING BRANDS
and ambience, but a story. “We have to excel at conveying how Juan Valdez coffee has an environmental and social meaning linked to its origin.” Taiwanese-owned Tingyi Holdings is
a huge seller on mainland China – it has 51% share of the Chinese instant noodle market and 43% of ready-to-drink tea sales. Its ambition now is to overtake Coca-Cola as the world’s biggest beverage maker within five years. We might also keep an eye out for
85% of
the world’s population lives in the developing world; not one of the top brands call it their home
Beard Papa cream puffs from Japan, O’Mango frozen yoghurt from Korea, and ArArAt brandy from Armenia. “Our long-term ambition is to carve a niche for the ArArAt brand and our whole category of Armenian brandies in the drinks market internationally, competing primarily against French brands,” says Sergey Ivanov, brand director, ArArAt, at Pernod Ricard Rouss. Starting with
Russians and East Europeans in their home
countries, the brand draws on its Armenian heritage with an online film campaign,
commissioned by Amsterdam Worldwide. Since its launch in January it has had 1.5 million hits, mostly by Russians, “but the campaign has resonated strongly with audiences in Germany and the US,” says Ivanov.
INTERNATIONAL CALLS Electronics and telecom brands are also heading west. Following its launch of mini fridges aimed at American students and extra-large washing machines in Pakistan, Chinese appliance maker Haier now has foreign sales of $3.3bn a year, outweighing domestic revenues. Appliance maker Gree, meanwhile, has a presence in more than 100 countries and makes a third of its money outside of China. South African telecommunications
group MTN has been expanding across Africa and the Middle East with more than 40 million subscribers across 21 countries. India’s Bharti Airtel is going in the same direction. China’s Huawei has expanded throughout Asia, the Middle East, Africa and Latin America and is now focusing its energies on growth in the US and Europe. Rival
www.mandmglobal.com
mobile handset maker ZTE now generates just under half of all revenue from overseas. Chinese search engine Baidu, which
utterly dominates at home, has begun a service in Japan and has growing brand recognition worldwide. Its eCommerce cousin,
Alibaba.com, has already opened an office in the UK.
I THINK I’LL STAY HOME What’s almost as intriguing as the number of emerging brands is the fact that so few have even tried to go global. Leonie Ki runs a private equity fund in Hong Kong and is former chairman of the Association of Accredited Advertising Agencies in China. “The government would like to see Chinese brands go worldwide… but with the domestic market of 1.3 billion consumers most enterprises are saying the Chinese market is good enough.” Succeeding with a brand launch
abroad takes huge investment in marketing. LG, for instance, wants to increase its marketshare in LCD televisions to 15% this year and become the world’s second-biggest mobile handset maker within two years. The company has injected $113.5m
extra into its European marketing budget and spent big on sponsorship with a five-year deal with Formula One and the naming rights to the Birmingham, now LG, Arena in the UK. Senior manager of LG’s insight marketing team, Hyun Kyung Yoo, says non-Western brands may have 50 years’ experience, but in Western eyes they’re still earning their credentials. “Emerging brands start getting in by being cheaper,” says futurologist Ian Pearson. “If you’re buying a hard disk drive you may as well buy an unknown brand because it’s cheaper. But you’re not going to buy a car based on an ad and a few good reviews.” ○
M&M VIEWPOINT
As Western brands hunt for the ‘next billion’ consumers, their attention inevitably turns to the densely populated BRIC and Next 11 markets. But rest assured, these markets are not necessarily easy wins. The Google China example, which dominated much of Q1
2010, demonstrates that there are plenty of cultural issues to overcome. Of even more importance is the strength of local brands that could pose real challenges. The global brandscape is changing. Both brand values and consumer acceptance will determine at what speed.
M&M Q2 2010 47 Forbes’ billionaires
The changing shape of Forbes’ Top 10 Billionaires reflects the shifting balances of economic power
1 Carlos Slim Helu, Mexico Net worth $53.5bn Source of wealth: Telecoms 2 Bill Gates, US Net worth $53bn Source of wealth: Microsoft 3 Warren Buffett, US Net worth $47bn Source of wealth: Berkshire Hathaway 4 Mukesh Ambani, India Net worth $29bn Source of wealth: Reliance Industries (petrochemicals) 5 Lakshmi Mittal, India Net worth $28.7bn Source of wealth: ArcelorMittal (steel) 6 Lawrence Ellison, US Net worth $28bn Source of wealth: Oracle 7 Bernard Arnault, France Net worth $27.5bn Source of wealth: LVMH 8 Eike Batista, Brazil Net worth $27bn Source of wealth: OGX (mining, oil) 9 Amancio Ortega, Spain Net worth $25bn Source of wealth: Zara 10 Karl Albrecht, Germany Net worth $23.5bn Source of wealth: Aldi
BRIC vs traditional players
Number of places on Forbes’ list:
BRAZIL 18 CHINA 64 INDIA 49 RUSSIA 62
29 UK 403 US 53 GERMANY 22 JAPAN
Data source: Bain & Co
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