This week the Reputation Institute (RI), the world’s leading provider of reputation measurement and management services, announced the 2018 China RepTrak 100 rankings. The largest corporate reputation study of its kind, the China RepTrak 100 is based on more than 29,500 individual ratings collected in the first quarter of 2018. It includes comparative rankings, demographic trends, and unique insights into the dynamics behind reputational impact on business performance. The China RepTrak shows what drives trust and confidence and identifies supportive behaviors such as intent to purchase a company’s products, willingness to invest in, or even work for, the company.
RI’s Top 10 for China begins with the top 10 global brands operating in China. Apple was listed as number 8 while Intel took top spot as noted below. Overall Intel was number as well and they announced that in a press release yesterday. Congratulations to Intel.
Nicolas Georges Trad, Executive Partner, Reputation Institute stated in the report that “The resultant intangibles of reputation increasingly underscore how companies are evaluated in China. The reputation bubble has globally burst with an overall decline in the reputation of companies worldwide. In China, we are seeing an even more significant decline resulting in an erosion of confidence in companies, with reputation decline of -2.7 points compared with 2017.
In China, it is imperative for companies to inspire confidence in order to drive a high level of reputation and stakeholder support. While it is key for all companies in China to focus on world-class products and services and visible leadership, Chinese companies can further enhance reputation through innovation and more effective brand communication. Multi-national firms need to focus more on building more empathy with the Chinese public.”
The report further noted that “The greatest challenge for Chinese companies is in the dimension of Innovation, which experienced the largest year-on-year decline across all dimensions of -4.4 points. By contrast, multi-national companies outperformed Chinese companies in Innovation by 1.8 points. This indicates a unique opportunity for Chinese companies to differentiate and enhance reputation, on the merits of Innovation.
Additional challenges for Chinese companies include brand strength and communication, where Chinese companies are 2 points behind multi-national companies.
While multi-national companies are generally ahead of Chinese firms (0.6 points), challenges for multi-national companies include the lack of perceived emotional connection with the Chinese public. In comparing Chinese and multi-national companies, Chinese companies benefit from a stronger emotional connection.
For local brands in China, Huawei was ranked the leading company reputation wise and the ended up as the number two brand overal just behind Intel.
A local publication South China Morning Post (SCMP) linked Apple’s reputation lag due to the discovered 2012 working conditions at Foxconn. That would seem to be a stretch considering that the iPhone X was the number smartphone in China and Apple’s CEO Tim Cook participated as co-chair at this year’s China Development Forum in March.
SCMP added in their report that “Chinese consumers prefer Google over Baidu, China’s biggest domestic search engine, but home-grown smartphone maker Huawei over Apple, according to a survey released by independent research company Reputation Institute on Wednesday.
If Chinese consumers preferred Huawei over Apple in reputation, then how does SCMP explain why Chinese consumers clearly chose the iPhone X over any of Huawei’s smartphone in the all-important holiday quarter?
The gap may show that reputation surveys don’t always reflect reality on the ground. Consumers generally vote with their wallet, not a corporate chart created by an analytical research company.
Chinese consumers chose Apple’s iPhone X because they trusted Apple in delivering a quality product that just happened to be the most expensive smartphone on the market. That’s tangible confidence Apple can take to the bank.
And lastly, a new report by Counterpoint research this week showed that in Q1 2018 Xiaomi and Apple were the fastest growing brands in China. Apple can’t be one of the fastest growing companies in China backed by hard statistics if Chinese consumers didn’t believe in Apple’s reputation.
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