How much is your brand worth? If you are reading this as an employee of Tencent, the answer would be $66bn. According to Millward Brown, an arm of communications giant WPP, China’s three most valuable brands are Tencent, owner of ubiquitous messaging service QQ, Alibaba, whose $25bn IPO smashed NYSE records last year, and China Mobile.
By comparison, Sinopec’s brand was worth $15.5bn last year, followed by PetroChina valued at $12bn.
The three brands all have one thing in common: mobile. Tencent’s QQ now has 808m users, most of whom use both desktop and mobile or exclusively mobile to access the service. Alibaba is set to overtake Baidu in mobile advertising revenues this year at $4.75bn as advertisers clamour to rise above the noise on mobile shopping platforms, while China Mobile has long since dominated mobile usage in China.
Mobile shopping, or m-commerce, hit $150bn in China last year. Alibaba saw mobile ad sales grow 117%, and Baidu’s rose by an equally solid 95% during the same period. By comparison the lubricants industry in China is estimated to have grown by 5% in 2014. With smartphone adoption surging nationwide and with Google’s “mobilegeddon” - where websites will be judged on mobile compatibility - waiting around the corner, having a fully optimised mobile offering has never been more important.
However, a separate study from Forrester Research has found mobile marketers in China are lagging behind consumer expectations. The consultancy constructed an index that measures marketers’ mobile readiness on three key metrics: Mobile Intensity Score, Mobile Expectation Score and Mobile Behaviour Score.
The study found that Mobile Intensity between Chinese and American users was fairly similar. However, Chinese smartphone users had almost double the Mobile Expectation Score than their US counterparts, irrespective of age. Forrester analysts found that Chinese smartphone users expect service to be nigh-on instantaneous, but that most apps failed to meet these tough standards.
Smartphones are increasingly important in second and third tier Chinese cities as well, where consumers are less likely to have access to desktop connections on a regular basis.
Spending power in second and third tier cities is also catching up to those in first tier cities like Beijing, Shanghai and Guangzhou. However, research by Tencent found that mobile habits between the two groups varied less than expected.
If you are any doubt about the power of mobile and social media, read one American's story of how a stolen iPhone made him into the biggest name on Chinese social media...
For lubes marketers able to reach these consumers, demanding and affluent in equal measure, with timely, targeted messages and product recommendations, the opportunities are great. As too, however, are the challenges.
Fortunately, OATS innovative EarlFUSiON platform is geared to provide mobile lubricants solutions to consumers on-the-go. So, for the latest on this innovative technology, or to comment on anything you have read in this Bulletin, simply contact Diana Shen. As always, we look forward to hearing from you.
Sebastian Crawshaw
Chairman