Top Performers

ByteDance, Xiaomi, and SHEIN lead the list, showcasing the strength of Chinese brands in the entertainment, electronics, and fashion sectors.

Lenovo, Huawei, and AliExpress also remain strong contenders, emphasizing the diversity and innovation in China’s tech and e-commerce industries.

Sector Growth

Smart devices, automobiles, and e-commerce experienced the fastest brand power growth, with China’s industrial ecosystem and technological innovations providing a competitive edge.

Consumer electronics, entertainment apps, and online fashion account for a substantial portion of the brand power growth.

Brand Expansion

Chinese brands have successfully penetrated international markets, with notable growth in regions like Europe, North America, and Southeast Asia.

Brands like BYD and NIO in the automotive sector, and OPPO and Vivo in consumer electronics, have expanded their global footprints, contributing to the increasing brand power.

Market Trends

The report highlights a shift in consumer preferences towards brands that offer meaningful differentiation and high engagement. Brands that have successfully created unique and compelling brand experiences have seen significant growth.

There has been a notable increase in the brand power of mid-sized brands, indicating a shift from the dominance of top-tier brands to a more competitive landscape.

Notable Brand Highlights

• ByteDance: As a global leader in digital content and social media, ByteDance’s platforms like TikTok have become household names worldwide, driving significant brand recognition and engagement.
• Xiaomi: Known for its high-quality yet affordable electronics, Xiaomi continues to expand its product lines and market reach, solidifying its position as a leading global brand.
• SHEIN: The online fashion retailer has disrupted traditional retail with its fast-fashion model, capturing a significant global market share and expanding rapidly across multiple regions.
• BYD: In the automotive sector, BYD’s focus on electric vehicles has positioned it as a key player in the global shift towards sustainable transportation solutions.
• OPPO and Vivo: These smartphone giants have continued to innovate and expand their international presence, offering advanced technology and appealing to a broad consumer base.

Strategic Insights

The report suggests that the key to the success of Chinese global brands lies in their ability to offer meaningful differentiation and engage deeply with consumers. Brands that can innovate and adapt to changing consumer preferences will continue to thrive in the competitive global market.

• Consumer Engagement: Successful brands have invested in understanding and meeting the functional and emotional needs of their consumers, creating strong brand loyalty and advocacy.
• Technological Innovation: Continuous investment in technology and innovation has enabled Chinese brands to stay ahead of the curve, offering cutting-edge products that resonate with global consumers.
• Global Strategy: A tailored approach to international markets, considering local preferences and cultural nuances, has been crucial for the expansion and acceptance of Chinese brands abroad.

Top 50 Brands from Kantar BrandZ 2024 China Global Brands

1. ByteDance
2. Xiaomi
3. SHEIN
4. Lenovo
5. Huawei
6. AliExpress
7. Haier
8. TEMU
9. OPPO
10. Hisense
11. TCL
12. Tencent
13. vivo
14. Chery
15. BYD
16. Anker
17. DJI
18. MiHoYo
19. OnePlus
20. Kuaishou
21. realme
22. GWM
23. TP-LINK
24. HONOR
25. Lynk & Co
26. MAXUS
27. Insta360
28. WORX
29. Lilith
30. Century Games
31. JAC
32. Roborock
33. CHANGAN
34. Geely
35. Midea
36. DiDi
37. POCO
38. ECOVACS
39. Trip.com
40. Magic Tavern
41. Habby
42. Tsingtao Beer
43. EcoFlow
44. Infinix
45. IGG
46. Kunlun
47. eufy
48. 37Games
49. NetEase Games
50. LightInTheBox

BCG: The most innovative Chinese companies

Rising Coffee Consumption

In 2023, China’s coffee industry reached a market size of approximately 265.4 billion yuan ($38.5 billion), with an annual compound growth rate of 17.14% over the past three years.

This growth trajectory suggests that the market size could increase to 313.3 billion yuan ($45.4 billion) by 2024.

A remarkable aspect of this rise is the per capita coffee consumption which stood at 16.74 cups in 2023, a clear indicator of coffee’s burgeoning popularity in a traditionally tea-drinking nation.

Shanghai: The Coffee Capital of China

Shanghai is at the forefront of this coffee revolution, hosting the highest number of coffee shops in the nation.

With 9,553 coffee outlets, the city accounts for 6.1% of all coffee shops across China. This concentration not only emphasizes Shanghai’s pivotal role in the coffee industry’s growth but also mirrors urban lifestyle trends and the influence of Western culture.

Import Trends and Economic Implications

The import value of coffee-related goods reached a new high of 7.81 billion yuan ($1.13 billion) in 2023, underscoring the increasing domestic demand for quality coffee products.

This surge in imports has implications for international trade and offers significant opportunities for global coffee exporters looking to enter or expand within the Chinese market.

Challenges

Despite the promising growth, the coffee industry in China faces several challenges.

Issues such as market saturation in urban centers, variability in coffee quality, and the environmental impact of increased coffee consumption and importation are becoming increasingly significant.

Addressing these challenges is crucial for sustaining growth and ensuring the industry’s long-term viability.

As China continues to embrace coffee, the industry’s rapid growth is more than just a trend; it is a reflection of changing cultural preferences and economic modernization. The coffee sector’s expansion is likely to continue influencing not only the global coffee market but also the socio-economic landscape within China.

The future will likely see further integration of coffee into the Chinese lifestyle, promising ongoing opportunities for market players and consumers alike.

Blue Bottle Coffee Opened in Shanghai

In 2023, China’s internet medical sector enjoyed a wave of favorable policies, significant revenue growth, and accelerated application of digital technologies, showcasing an overall positive development trend.

Strong policy guidance played a crucial role in March, with the issuance of “Opinions on Further Improving the Healthcare Service System” by the General Office of the Communist Party of China Central Committee and the General Office of the State Council.

These policies stressed leveraging information technology to develop “Internet + Healthcare” initiatives, construct smart platforms for the medical field, and fast-track the application of the internet, blockchain, and IoT in healthcare, thereby enhancing the provision of high-quality medical services.

Revenue growth for internet medical enterprises was notably significant. The service coverage of these companies expanded continuously, driving substantial revenue increases.

In the first half of the year, JD Health extended its reach to over 400 cities nationwide, covering more than 100,000 stores, which propelled a 34.0% year-on-year revenue increase.

From March to September, Alibaba Health’s income and profit grew by 12.7% and 172.2%, respectively, with the number of merchants on its Tmall Health platform exceeding 32,000, an increase of more than 4,000 compared to the previous year.

The deployment of digital technologies also saw rapid progress. The deep integration of digital technologies like artificial intelligence and cloud computing with the medical industry led to the preliminary formation of AI medical models and smart medical information platforms.

In July, SenseTime launched the “SenseCare Smart Hospital” comprehensive solution, focusing on smart diagnosis and treatment, medical research, and other scenarios. This solution provides hospitals with one-stop services to improve treatment outcomes, optimize patient experiences, and support the smart transformation of hospitals.

China Internet Overview

However, the last quarter saw a 1.2% year-over-year increase in shipments, thanks to strong demand for premium smartphones, particularly in major cities. Apple’s strategic price cuts through third-party channels played a pivotal role in this growth, as did Honor’s reinforced channel partnerships and diversified product offerings, securing their respective top spots in the market.

A remarkable turnaround was Huawei’s re-entry into the top five, after more than two years, suggesting a revitalized competitive landscape. Despite these shifts, the final quarter of 2023 revealed nuanced dynamics: Apple and Honor slightly decreased their market shares, while Huawei saw a significant 36.2% increase, and the ‘Others’ category grew by 11.9%, indicating a diversifying market.

In contrast, Q4 2023 observed a 1.2% year-over-year uplift in shipments to 73.6 million units, halting a streak of declines over ten quarters. This rebound was spearheaded by robust demand for premium smartphones in major cities, while the market for lower-end phones lagged, despite their majority share in China’s market.

Arthur Guo, a senior research analyst at IDC China, highlighted Apple’s ascent to prominence amidst stiffened competition and subdued spending. Apple’s strategic price cuts through third-party channels spurred demand, securing its dominance.

Concurrently, Honor solidified its second position through enhanced channel partnerships and a diversified product suite, appealing to both high-end and mid-range segments.

A notable event in 4Q23 was Huawei’s resurgence in the top five after a hiatus exceeding two years, notes Will Wong, IDC Asia/Pacific’s senior research manager. This comeback intensifies competition in the world’s most significant smartphone arena.

The data reveals a mixed picture:

• Apple’s market share declined slightly from 20.6% in Q4 2022 to 20.0% in Q4 2023, indicating a -2.1% change.
• Honor also saw a slight dip from 17.1% to 16.8%, a -0.9% change.
• Vivo’s market presence shrank by -8.4%, dropping to 15.7% from 17.4%.
• Huawei defied the trend, soaring by +36.2% to reach a 13.9% market share, up from 10.3%.
• OPPO’s share fell by -16.1% to 13.7%, down from 16.5%.
• The ‘Others’ category grew by +11.9%, accumulating a 20.0% share, a significant collective rise.

The overall market dynamics for 2023 contrast with the final quarter, suggesting a nuanced recovery trajectory. While Apple and Honor lead the charge, with Huawei’s return signaling a potential market shakeup, companies like Vivo and OPPO may need to rethink strategies to maintain their footholds.

The Rise of Foldable Smartphones

In a notable development, IDC’s latest quarterly mobile phone tracker highlights the explosive growth of China’s foldable smartphone market, with shipments reaching approximately 2.77 million units in Q4 2023, a staggering 149.6% year-over-year increase.

This surge is propelled by new releases from Huawei, OPPO, and Honor, marking a continuous rapid growth trend for the fourth consecutive year, with a total of 7.01 million units shipped in 2023, up 114.5% from the previous year.

Improvements in hardware technology, software applications, and a drop in prices have enhanced the consumer experience and widened the foldable smartphone’s appeal. The price segment of $400-$600 is becoming increasingly populated, reflecting the segment’s potential for further growth.

Market Preferences and Performance

Consumers have shown a preference for horizontally folding devices over their vertically folding counterparts, despite the latter’s lower price points, due to the superior screen experience they offer.

Horizontally folding models, especially favored by the business sector for mobile office use, regained market share, reaching 68.1%, a 10.4 percentage point increase from the previous year.

In terms of market performance, Huawei dominated the foldable market with its Mate X5 series, capturing a 37.4% share.

OPPO followed with an 18.3% share, leading the vertically folding segment. Honor’s aggressive push in the second half of 2023 earned it third place, with a 17.7% share and the fastest growth rate of 467.0%. Samsung and Vivo rounded out the top five, facing stiff competition in the vibrant Chinese market.

Future Outlook

Arthur Guo of IDC China underscores the importance of balance between design and reliability in the foldable market.

As manufacturers vie for dominance in 2024, the foldable smartphone segment is set to continue its rapid expansion, driven by innovation and an increasing number of market players.

This evolving landscape suggests a dynamic future for China’s smartphone market, with foldable technology at the forefront of the next wave of mobile innovation.

This partnership, announced on January 25, aims to revolutionize AI capabilities in Samsung’s flagship smartphones. The integration of ERNIE into Samsung’s Galaxy AI enhances the S24 Series with features like intelligent summarization, advanced typesetting, and real-time call translation.

This collaboration brings ERNIE’s content understanding and generation capabilities to the Samsung Note Assistant, enabling it to translate and summarize extensive text efficiently.

The S24 Series boasts AI-driven features such as real-time speech-to-text transcription, speaker differentiation, multi-language translation, and automated meeting minutes generation, thus streamlining cross-language communication and office tasks.

The S24 Series introduces the “Circle to Search” feature, allowing intuitive searches across texts, images, or videos via simple hand gestures powered by Baidu Search for accurate and quick results.

Chen Yifan, Vice President of Baidu, highlights ERNIE Bot’s potential for diverse applications, especially given its multimodal data processing and personalization capabilities.

Launched in October of the previous year, ERNIE 4.0 marks Baidu’s most advanced AI foundation model, already serving over 100 million users. Baidu AI Cloud simplifies AI-native application development, offering ModelBuilder and AppBuilder tools to ease the creation of customized AI models.

Global market intelligence firm IDC predicts a surge in AI-enabled devices in China, forecasting that by 2024, over 70% of devices will feature AI functionality, representing 55% of the market.

The featured product of this collaboration is the “Flowing Latte”, designed primarily for delivery. Its unique appeal lies in the gradual separation and freezing of coffee cream and milk during delivery, ensuring a distinct, semi-frozen texture upon arrival. Flavors include French Caramel, Rum Chocolate, and the upcoming Rose.

This collaboration extends beyond online platforms. In-store, the “Peach Feast” series, inspired by the Peach Banquet scene from “Journey to the West”, offers two flavors – Golden Roast Peach Oolong and Golden Roast Oat Peach Latte.

Starbucks’ approach differs from domestic brands like Luckin Coffee, which cater to price-sensitive youths and capitalize on marketing stunts. Starbucks opts for a more conservative strategy, partnering with well-known Chinese content IPs to reinforce its premium positioning.

Despite its cautious approach, Starbucks’ choice of Sun Wukong represents a significant concession to the Chinese market. Sun Wukong’s international appeal aligns with Starbucks’ global brand image, yet it may seem outdated or lack excitement for younger Chinese consumers, who prefer contemporary trends.

Starbucks’ commitment to brand uniformity is evident in its decision not to design custom packaging for this collaboration. This reflects a balancing act between appealing to the local market and maintaining a consistent global brand identity.

In the post-pandemic era, Starbucks has emphasized the importance of the Chinese market. The brand has announced various localization strategies, including the “Ten Thousand Stores Plan”, investment in supply chains, and accelerated product innovation.

Starbucks’ response to the evolving Chinese coffee market has been strategic. The brand is adapting to stay relevant with aggressive competitors like Luckin, HeyTea, and Naixue. Initiatives include offering discounts, live-stream sales, and rapidly introducing new products.

In conclusion, Starbucks’ collaboration with “Journey to the West” represents a cautious yet strategic approach to innovation and tradition in China’s dynamic market. While maintaining its core brand values, Starbucks is learning and adapting to remain a leader in the evolving Chinese coffee industry.

What’s this “520 day” that intrigues many in China? The term 520, an abbreviation for May 20, denotes an unofficial Valentine’s Day in China. The number “520” phonetically resembles “Wo Ai Ni” or “I Love You” in Chinese.

While February 14 remains the globally recognized Valentine’s Day, the Chinese honor their affection on several other occasions as well, including May 20 (520 Day) and the Qixi Festival. These days are regarded as Chinese versions of Valentine’s Day, with the 520-day holding special significance as it symbolizes “I Love You.”

Despite not being an official holiday, 520 Day has garnered popularity among couples and singles as an opportunity to express romantic love.

Due to the ongoing pandemic in 2020, the “520 Day” celebration witnessed changes with fewer public gatherings. Nonetheless, businesses capitalized on the festival by initiating online engagement campaigns.

For instance, luxury brand Prada, created a campaign using the hashtag #prada520# on Weibo, one of China’s top social platforms. The campaign featured brand spokesperson Cai Xukun and garnered 180 million views as of May 5.

The “520 Day” traces its roots to Taiwanese singer Fan Xiaolan’s song “Digital Love,” where “520” symbolized “I love you.” Over time, “521” was also interpreted as “I am willing,” and “I love you” in China, earning various epithets like “Marriage Day,” “Love Expression Day,” and “Love Festival.”

These two dates, May 20 & 21, serve as annual internet Valentine’s Days in China, echoing the phrases “I (5) love (2) you (0/1)” in Chinese. While they lack historical roots, they are products of commercial promotions in the 21st century.

Despite not being official holidays, the evenings of these days see restaurants and cinemas bustling and prices surging due to Valentine’s Day celebrations.

May 20 is particularly crucial as men utilize this opportunity to express their romantic love for women, often presenting gifts or ‘hongbao.’ Some couples even choose this date for their wedding ceremony.

The difference between 520 and 521 is that the former is largely a day for women, while the latter caters to men. On May 20, men express “520” (I love you) to their significant other. The subsequent day, women reply with “521” to indicate their reciprocation of love.

For marketers in China, these days present lucrative opportunities for promotions. The rising orders of roses, surging sales of chocolates, and full-house hotels underscore the business potential of the “520-day festival.”

A few notable examples of this trend include the most retweeted photo on Sina Weibo on May 20, 2014, and a post by The Economist in 2017 asking “how do economists say ‘I love you’?” The topic #Sweet 520# witnessed almost 4 million discussions and over 1 billion views as of noon on May 20, 2017.

The characteristics of 520 Valentine’s Day include:

1. Fashionable: “520” resonates with the younger generation who find creative ways to celebrate the day, even choosing this date for their wedding. It’s also a popular topic on WeChat Moments and QQ group chats.
2. Younger: Those under 30 years old, who are quick to embrace new trends and spend much of their free time on the internet, are the primary followers of 520 day.
3. Spiritual: Gifts exchanged on May 20 and 21 lean more towards the “spiritual.” It could be a coded message of love sent over the internet or mobile phone.
4. Implicit: Unlike the globally recognized Valentine’s Day, which is for established couples, the 520 Internet Valentine’s Day is preferred by men and women to subtly express their love using digital codes.

5 key trends shaping the Chinese economy, accelerated by COVID-19