Food companies in China have to reinvent the way they communicate their products to their customers, a study of authentic brand shows.
American fast food chain KFC tops the list of the most authentic brands in the mainland, followed by Industrial and Commercial Bank of China and McDonald’s, according to a report that examines the role of authenticity in business in 12 markets.
“Local brands may need to do more. Why should KFC be the number one, or most authentic brand in China? It should be a Chinese brand,” Geoff Beattie, global head of corporate affairs of Cohn & Wolfe, told EJ Insight.
“Considering the nature of Chinese people, for KFC to be number one is kind of very unusual,” he said.
Cohn & Wolfe, a global communications and public relations agency, commissioned research company Toluna to carry out the study on 12,000 respondents in July.
An authentic brand generally means one that communicates honestly about its products and services.
The study shows brand authenticity plays an important role in consumer’s buying and investment decisions and when they engage with a product brand.
Unsafe and unsanitary food production is an inauthentic behavior that puts out consumers the most.
Chinese food and drink manufacturers have been marred by scandal in recent years.
In 2008, Sanlu was embroiled in a milk scare, wherein six babies died and 54,000 hospitalized after consuming contaminated milk powder.
Another food safety fiasco involved rat meat passed off as mutton last year.
Beattie said the situation is not improving.
“It’s a big issue in China… food companies have got to completely redo, rethink the way they communicate with their consumers about what kind of products they are supplying and what’s really in those products,” he said.
“KFC and McDonald’s have no Chinese equivalents that can compete with them at the moment. So the question is why not? Maybe, those companies need to think a bit more about how they convince people… because authenticity is very important in the fast food sector.”
Among the 20 brands Chinese consumers think have lived up to their brand promise, eight are foreign brands.
These include Samsung, Apple, Walmart, Carrefour, RT-Mart of Taiwan and Starbucks.
In comparison, all 20 brands on the list are US domestic brands. Walmart tops the list in the country, followed by Starbucks and Amazon.
In Britain, the first eight places are held by local brands, with the number one being Marks & Spencer. Four are held by groceries or supermarket chains.
In Germany, the top five brands are all “very German” low-cost groceries.
Globally, supermarkets rank the highest for authentic behavior, benefiting from having far more touch points with consumers in their everyday lives.
In China, the banking sector is considered the most authentic sector.
Among the 12 domestic brands on the list, five are banks, namely, Industrial and Commercial Bank of China, Bank of China, China Construction Bank, China Merchants Bank and Agricultural Bank of China.
“Banks seem to play a much more meaningful role in people’s lives in Hong Kong and China than they do in the West, where banks have been through such terrible years that we really don’t like them,” Beattie said.
Hong Kong’s best
McDonald’s tops the global list of authentic brands, followed by Samsung and Apple.
But in Hong Kong, McDonald’s comes in second to HSBC while Parknshop is in third position.
McDonald’s Hong Kong was in hot water in July this year after it became entangled in a scandal involving expired meat products.
It found itself in a deeper mess after it denied it had used the products only to admit it lied to the public.
Sales took a severe beating in the wake of the incident.
Beattie said he did not have enough information at the time to comment on the incident but added an authentic brand will have to maintain transparency under any circumstance.
“The real test of authenticity is in a crisis situation. How do you maintain that level of transparency when things are really bad, and people are writing bad things about you. That’s really hard,” he said.
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