Belt and Road paved with opportunities for growth of Chinese brands, says Nielsen

Belt and Road paved with opportunities for growth of Chinese brands, says Nielsen

In a forum in Beijing, more than 400 business and government officials from around the world have discussed the opportunities and challenges Chinese companies face as they seek to go global. The forum, held under the theme “Chinese brand global strategic development”, was organized by Nielsen, a leading global performance management company, with the support from the China International Council for the Promotion of Multinational Corporations (CICPMC).

Managing directors from Nielsen offices in Egypt, Indonesia, the Philippines and Turkey were on hand to offer their expert advice on consumption trends in various markets, strategies for new entrants, principles for success and insights into the rewards to be reaped.

“As a new driver of globalization, the Belt and Road Initiative is helping companies stretch their international horizons and grow,” said Andy Zhao, president of Nielsen China. “However, while companies ‘go global’ they also need to ‘go local’ so they can perform well overseas by solidifying their operations and becoming fully integrated there. They also need to ‘go up’, which means pushing on with innovation, strengthening the influence of their brands and leading the way as ‘Made in China’ becomes ‘Created in China’ and they transform and upgrade industrially.

He cited the data from China’s Ministry of Commerce, which indicates between 2013 and 2017 the country’s trade in good with economies participating in the Belt and Road Initiative exceeded $5 trillion and outbound direct investment reached over $70 billion. During the period, Chinese companies set up 75 economic and trade cooperation zones in countries and regions involved with the initiative and created 210,000 job opportunities, the data showed.

“Over the past few years Nielsen has helped Chinese companies become more important players on the world stage,” Zhao said, citing 3C products and motor vehicles as an example. “In Chile, Egypt and Southeast Asia we conducted consumer research on Chinese brands using very precise measurements, getting to understand consumer sentiment, assessing the launches of various products, monitoring brand influence and satisfaction and evaluating marketing strategies to win in the market place.”

However, even though the Belt and Road Initiative provides great opportunities for companies, huge differences in political, economic, cultural and legal systems of the various economies need to be taken into account.

Stuart Jamieson, managing director of Nielsen Philippines, said a number of factors such as a young population, fast-growing economy, positive attitudes to spending, busy lifestyles, and digitalization are shaping the new consumer market in the Philippines and providing new momentum. “Focusing on changes in consumer behavior and exploring new development models based on consumer insights are critical,” he said, “the Nielsen study found that in the Philippines, ‘convenience’ is the key to meeting consumer demand. That is also the direction in which retail development is heading.”

“E-commerce in the Philippines is still in its infancy, and that means there is huge scope for growth.”

Didem Sekerel Erdogan, Managing Director of Nielsen Turkey, highlighted that Turkey has very young, dynamic and highly digital population. The economy shows a healthy 7.4% GDP growth in 2017. Sekerel Erdogan mentioned that FMCG market grew by +14% and innovations new products played an important role with 9 pts driving this growth. 7 out of 10 consumers in Turkey are willing to try new products.

Sekerel Erdogan shared that social media penetration is far higher in Turkey than global average and time spent on social media is record high: almost %50 more than China and USA. With this reference, e-commerce is a strong opportunity in Turkey. Sekerel Erdogan stated that Turkey will continue the strong growth trend.

Tamer EI Araby, managing director of Nielsen Egypt, said the country’s economy is recovering rapidly, and various macroeconomic indicators are looking positive, thanks to government policies. “In the current economic context there are two new consumer market trends,” El Araby said. “One is that discount stores are becoming the most popular shopping channel, and the other is that online shopping continues to surge. In 2014 just 2 percent of consumers shopped online, and that now stands at 8 percent.

Chinese companies investing in Egypt need to adopt appropriate market strategies to succeed, he said. The spectacular growth of Chinese smartphone sales in Egypt makes it clear that working closely with the Egyptian counterparts can drive great successes.

Agus Nurudin, managing director of Nielsen Indonesia, said the country is replete with marketing opportunities and that Indonesians are among the world’s most optimistic consumers. As their bank balances grow and they pursue higher living standards, two of the areas of growing spending are eating out and smartphones.

Across the country, food and beverage sectors are also important, and television remains the most popular media outlet among Indonesian consumers, Nielsen research shows.

“Three major industries – news and information, entertainment and finance – are at the core of digital transformation,” Nurudin said. “Investment priorities in Indonesia encompass product distribution, pharmaceuticals and raw materials, e-commerce and tourism.”

The historic commercial opportunities the Belt and Road Initiative offer are enormous, and Nielsen China will draw on its international perspective and global research opportunities to help companies seize those opportunities, tackling and of the challenges that arise. More broadly, Nielsen China is well equipped to give companies with overseas ambitions commercial and cultural insights into the markets they aspire to enter.