Beware banality – rethinking the rise of China
Behind the tectonic shift of macroeconomic power from West to East there’s something interesting going on that poses an existential threat to some of the biggest companies in the West.
Our recently-published 2018 FutureBrand Index reveals a fundamental values imbalance between Western and Eastern companies. I think this imbalance will have a huge impact on all companies’ prospects – but it’s Western companies that need to take the most urgent action.
Successful Eastern companies – especially those from China – are built on three pillars: technology and innovation, craft and quality, and traditional values that prioritize the long-term over the short – constant evolution, respect, harmony and wellbeing. To me, these values feel innately human.
By these measures, leading Western companies often fall short. Look at the big players in the US tech sector, whose tendency to prioritise profit over people, and to flirt with unethical practices such as avoiding tax and playing fast and loose with customers’ privacy has dealt their reputations some significant blows.
US still on top – but China on the rise
The FutureBrand Index looks at PwC’s Global Top 100 companies and reorders them in terms of how strongly positioned they are for the future. Just as they always have, US brands dominate the list. But it also features more Chinese firms than ever before.
There are eight Chinese companies seen as strongly future-proofed (TSMC, Kweichow Moutai, Tencent, Sinopec, Ping An, Alibaba, China Life, and China Merchants Bank). And no Chinese brand is perceived to be falling behind in the next three years. Also, for the first time, a Chinese company is right at the top of the rankings – luxury spirits brand Kweichow Moutai enters at number two.
Purpose and experience – not location
What does all this tell us? I think it’s this: that the story of China is not just about relentless growth; it’s also about increasingly sophisticated Chinese brands building a sustainable future in ways that elude many established players in the West.
But does this mean Western companies are doomed to fail – swept away by a tsunami of Chinese brands? In the West, we like looking nervously to the East and fearing the worst.
I would suggest that the truth is a little more nuanced. There’s one factor that’s much more significant than geography uniting the best-perceived companies. The most future-proofed brands are those that connect the experiences they create with their wider corporate purpose. These are the brands that foster trust, build a strong emotional connection with their customers, drive innovation and make themselves indispensable.
There are undoubtedly some interesting regional themes in our research, but the top scorers are a mix of US and Chinese names. US brands such as Walt Disney, Nvidia and Netflix already do a great job of balancing why they exist with the products and services they offer. And some Chinese brands, including the China Construction Bank and the Agricultural Bank of China, fell back because they failed to do this.
Banality kills brands
Rather than looking fearfully eastward, I would urge Western companies to learn lessons from their Chinese counterparts. Among the principal reasons for moving up this year’s Index are innovation, caring about people, promoting health and wellbeing, and delivering consistent share performance. All these attributes are seen consistently in Chinese brand perception scores.
To improve their long-term prospects, US tech sector firms must do more than come up with technology – they must ensure it creates experiences that genuinely improve the lives of their customers. And the tech firms – along with those in every other sector – should end their preoccupation with cost and focus instead on rediscovering their humanity and delivering meaningful, positive experiences.
No one’s suggesting we can simply transfer Chinese values to the West and hope for transformational results but thinking more about long-term brand strength and less about short-term performance measures such as sales and cost-cutting might hugely benefit Western brands.
Because that kind of short-termism makes brands banal and banality breeds indifference and can even kill brands. Ultimately, it’s banality that’s the enemy, not China.
G7 Summit guide: What it is and what leaders hope to achieve
Unless you’ve had your head buried in the sand, you’ll have seen the term ‘G7’ plastered all over the Internet this week. We’re going to give you the skinny on exactly what the G7 is and what its purpose on this planet is ─ and whether it’s a good or a bad collaboration.
Who are the G7?
The Group of Seven, or ‘G7’, may sound like a collective of pirate lords from a certain Disney smash-hit, but in reality, it’s a group of the world’s seven largest “advanced” economies ─ the powerhouses of the world, if you like.
The merry band comprises:
- The United Kingdom
- The United States
Historically, Russia was a member of the then-called ‘G8’ but found itself excluded after their ever-so-slightly illegal takeover of Crimea back in 2014.
Since 1977, the European Union has also been involved in some capacity with the G7 Summit. The Union is not recognised as an official member, but gradually, as with all Europe-linked affairs, the Union has integrated itself into the conversation and is now included in all political discussions on the annual summit agenda.
When was the ‘G’ formed?
Back in 1975, when the world was reeling from its very first oil shock and the subsequent financial fallout that came with it, the heads of state and government from six of the leading industrial countries had a face-to-face meeting at the Chateau de Rambouillet to discuss the global economy, its trajectory, and what they could do to address the economic turmoil that reared its ugly head throughout the 70s.
Why does the G7 exist?
At this very first summit ─ the ‘G6’ summit ─, the leaders adopted a 15-point communiqué, the Declaration of Rambouillet, and agreed to continuously meet once a year moving forward to address the problems of the day, with a rotating Presidency. One year later, Canada was welcomed into the fold, and the ‘G6’ became seven and has remained so ever since ─ Russia’s inclusion and exclusion not counted.
The group, as previously mentioned, was born in the looming shadow of a financial crisis, but its purpose is more significant than just economics. When leaders from the group meet, they discuss and exchange ideas on a broad range of issues, including injustice around the world, geopolitical matters, security, and sustainability.
It’s worth noting that, while the G7 may be made up of mighty nations, the bloc is an informal one. So, although it is considered an important annual event, declarations made during the summit are not legally binding. That said, they are still very influential and worth taking note of because it indicates the ambitions and outlines the initiatives of these particularly prominent leading nations.
Where is the 2021 G7 summit?
This year, the summit will be held in the United Kingdom deep in the southwest of England, with Prime Minister Boris Johnson hosting his contemporaries in the quaint Cornish resort of Carbis Bay near St Ives in Cornwall.
What will be discussed this year?
After almost two years of remote communication, this will be the first in-person G7 summit since the novel Coronavirus first took hold of the globe, and Britain wants “leaders to seize the opportunity to build back better from coronavirus, uniting to make the future fairer, greener, and more prosperous.”
The three-day summit, running from Friday to Sunday, will see the seven leaders discussing a whole host of shared challenges, ranging from the pandemic and vaccine development and distribution to the ongoing global fight against climate change through the implementation of sustainable norms and values.
According to the UK government, the attendees will also be taking a look at “ensuring that people everywhere can benefit from open trade, technological change, and scientific discovery.”