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Asian companies struggle to build strong reputations worldwide

April 10, 2014
Corporate reputation
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It is the time of the year when corporate reputations are paraded afresh. First out of the blocks: the annual list of The World’s Most Reputable Companies from the Reputation Institute.

The 2014 list contains some interesting findings from an Asian perspective:

  • Three Asian firms make the top 10: Sony, Canon and Samsung
  • Only 20 Asian firms make the grade, all but five (Samsung, LG Electronics, Singapore Airlines, Acer, Lenovo) of which are Japanese
  • Lenovo is the only Chinese firm to be listed.

The fact that Japanese companies are still regarded as the most reputable in Asia comes as little surprise (despite Sony’s financial difficulties), and Samsung’s rise to the top ranks is probably only to be expected.

The list also underscores the huge reputational challenges facing Chinese companies as they go global – an issue I have written about previously.

The RI list is also interesting for what’s not there:

  • No energy firms
  • No banks
  • No Indian firms.

Here’s the list in full:

RI_WorldsMostReputableCompanies2014

 

 

 

Top 3 communications books of 2013

December 26, 2013
Communications & public relations, Influencer communications, Reputation management
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The rush of tweets, infographics and animated gifs makes it challenging to get a real handle on longer-term communication trends. Thankfully, long-form journalism, storytelling and analysis are in rude health.

Here are the three best books on communication I have read in 2013 (ie. not necessarily published over the past twelve months):

Trust Me, I’m Lying, by Ryan Holiday

Ryan Holiday - Trust Me, I'm Lying

Billed as a warts-and-all confessional on modern-day media manipulation and spin-doctoring, Trust Me is actually principally a polemic on the state of the media in the US and a no-holds-barred expose on the inner workings of the blogs re-setting news industry plate tectonics, notably Business Insider, BuzzFeed, Drudge Report, Gawker and Huffington Post.

If you believe your news should be informative and balanced, then this book makes for highly unsettling reading – Holiday’s thesis is that the media industry has effectively lost its bearings in a desperate quest for exclusives, page views and ad bucks, disregarding any pretence at accuracy, objectivity or integrity in the process.

While Trust Me, I’m Lying reads a little like a personal slanging match in places (the author pulls no punches in fingering those he sees as chiefly responsible, amongst them Gawker Media’s Nick Denton and media talking head Jeff Jarvis), it holds valuable insights and lessons for both communications professionals and consumers.

Exposure, by Michael Woodford

When Michael Woodford, newly appointed CEO of medical to consumer optical manufacturer Olympus, got wind of a scoop by a niche Japanese magazine detailing massive financial irregularities at his firm, he could scarcely have believed that he would wind up blowing the lid on a cover-up of some USD 1.7 billion of losses and becoming one of the highest-profile and most effective whistle-blowers in corporate history. (Of course, Woodford has since been knocked off his perch atop the whistle-blower premiere league by one Edward Snowden.) While Exposure suffers from poor writing and can hardly be described as a balanced account (according to Japanese friends, Woodford is seen to have over-egged the publicity pudding and thrust himself to the front and centre of the story in an unashamedly un-Japanese manner), it is nonetheless a fascinating and, in this case, singularly unedifying insight into the culture of the keiretsu and big business in Japan. It is also an excellent example of how a reputable company can be brought to its knees by a rogue employee (or two) through bitter resolve and smart communication on the one hand and corporate secrecy and intransigence on the other. For fuller thoughts see this blog post.

The New Emerging Market Multinationals, by Amitava Chattopadhyay and Rajeev Batra with Aysegul Ozsomer

A book less about communication and reputation than about brand building, the authors use in-depth interviews with senior executives at emerging giants from Brazil, China, India, Turkey and other ’emerging’ markets to identify how a new wave of multinationals are building global businesses and global brands. Full of valuable insights into how firms like Asian Paints, Asia-Pacific Breweries, Godrej, Haier, Lenovo, Natura and Wipro are building their brands, The New Emerging Market Multinationals sets out a step-by-step process for global brand-building, including how to overcome country of origin perceptions, and ends with a look at how companies are – and should – manage their brands across their organisations, making a strong argument for centrally-managed brands. An excellent resource for professionals at emerging market firms and at established players figuring how to take on their new competitors.

Why Chinese trust local over foreign brands

December 5, 2013
Corporate reputation
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Chinese brands are more than holding their own against western firms in the court of public opinion in China, according to WPP’s latest Top 100 Most Valuable Chinese Brands study.

Local brands the mainland Chinese most trust:MostTrustedChineseBrands2014

 A few things jump out from this table:

  • A majority of the most trusted Chinese firms are privately-owned
  • The high level of trust in Baidu, despite its legacy of selling search placements, paid deletion of online comments, video copyright infringements and other misdemeanours
  • The absence of (and therefore relatively low trust in) well-known global Chinese companies, notably Lenovo.

Most noteworthy is that the study finds that Chinese companies/brands are (and indeed have been for some time) as trusted or more trusted in China than their foreign peers, something that may come as a surprise to many outside the Middle Kingdom and to plenty of foreigners living in China.ChineseversusForeignbrands_2014

Assuming the data is accurate, and putting aside concerns that the findings go against the grain of other recent studies and that trust differs significantly by category (German cars and Italian luxury still get the nod in China), how is it that so many Chinese firms are building local reputations that are just as strong if not stronger than those of their foreign peers?

Some thoughts:

  • They understand local consumers and stakeholders better than their foreign competitors
  • They provide increasingly useful, valuable and high-quality products
  • They have kept prices affordable, at least relative to some foreign firms eg. Starbucks
  • They are actively improving customer service and other functions
  • They provide many local Chinese with jobs
  • In an environment in which patriotism is being played up by the authorities, Chinese companies are seen as Chinese (though this can work both to their advantage and to their detriment)
  • Government and official media (CCTV) campaigns against foreign firms such as Apple and GSK are helping seed doubts about the quality of foreign products
  • Foreign brand failures, such as Fonterra’s botulism scare earlier this year, have given local brands an opportunity to cast themselves as caring and responsible.

As the study shows, companies of all types are generally held in fairly low esteem in China. The Chinese are notoriously price conscious and fickle – brand loyalty remains low in the country. As competition intensifies and food safety and pollution issues continue (as seems likely), trust will become an increasingly important factor in purchase decision-making in China.

Going forward, it will be interesting to see which Chinese companies manage to win the real trust of their domestic customers and other stakeholders, and how they go about it.

Equally interesting will be to see how foreign companies react. Even the German car manufacturers shouldn’t rest on their laurels for long.

Why are Chinese firms more trusted than Indian ones?

February 8, 2013
Corporate reputation, Reputation management
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Compared to more developed markets in the west, trust in Asia is in fairly rude health, according to Edelman’s 2013 Trust Barometer.

Some points to bear this out:

  • 6 of the 10 most ‘trusting’ countries are Asian – topped by the Chinese, Singaporeans and Indians
  • Above average trust in business in many Asian markets, notably India, Indonesia, China, Singapore and Malaysia
  • Very high levels of trust in government in China and Singapore, with otherwise generally higher average levels of trust in most other Asian markets (with the exception of Japan and Korea)
  • Significant trust in CEOs in most Asian markets
  • The five countries in which the media is most trusted across the world are China, India, Indonesia, Singapore and Hong Kong
  • Other than in Mexico, NGOs are held in the highest regard globally in Asia.

The study also reminds us, should we need reminding, that trust in Asian companies in developed countries remains low:

Edelman2013_AsianCompanyTrust

It is hardly surprising that Indian firms, many of which have been expanding internationally for some time, are held in higher esteem in developed markets than their Chinese counterparts. Yet the reverse is the case in emerging markets. Why?

My guess is that the principal reason for this is that Chinese firms have placed greater emphasis on expanding first in emerging Asian markets, whereas Indian firms have tended to leverage their Anglophile connections and shared English language to prioritise markets such as the UK and USA.

Equally, it could be argued that Chinese firms have a more substantive presence in the more widely known consumer electronics (Haier, Huawei, ZTE, Lenovo etc) and goods sectors, whereas Indians are better known abroad for B2B services (Infosys, Wipro, Tata Consulting etc) amongst business and technology professionals.

 

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