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The Importance of Brands in Technology - China - October 2014

“Chinese consumers are very open to technology, and they are willing to invest in technology products and services. The high proportion of consumer expenditure in technology and communications shows Chinese consumers are very engaged in technology. There is lucrative market potential for all technology brands and that is why both international and domestic companies are well presented in the market.

Despite similar levels of awareness, international and domestic brands are clearly separated in terms of how consumers perceive them. While international brands are genuinely seen as more reputable, domestic brands are considered as more relevant and more affordable. For long-term sustainability and competitiveness, domestic brands should continuously invest in brand building and international brands should dive deeper to understand Chinese consumers’ unique needs and preference.

Brand is a way for consumers to show their lifestyle aspirations, and this is very evident in technology. Brand makes an even stronger impact among people with more income.”
– Can Huang, Senior Research Analyst

This report answers the following key questions:

  • How do domestic technology brands fare against international brands?
  • Are Chinese consumers loyal to brands in the technology world?
  • How far can technology brands stretch across categories?
Chinese consumers see technology brands they use as a reflection of desired lifestyles. What brands need to do is to understand consumer behaviour, build unique brand value, communicate through storytelling and establish a binding relationship that shares a sense of identity.

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Table of contents

  1. Introduction

      • Definition
        • Personal computer (PC)
          • Mobile phone
            • Television (TV)
              • Home entertainment
                • Camera
                  • Portable media player
                    • Wearable product
                      • Methodology
                        • Abbreviations
                        • Executive Summary

                            • Technology market overview
                              • Figure 1: Consumer expenditure, by sector, 2013
                            • The consumer
                              • The consumer – ownership and awareness of technology brands
                                • Figure 2: Ownership and awareness of technology brands – international brands, July 2014
                                • Figure 3: Ownership and awareness of technology brands – domestic brands, July 2014
                                • Figure 4: Current usage of technology brands, by number of brands used, July 2014
                              • The consumer – perceptions of technology brands
                                • Figure 5: Perceptions of technology brands, July 2014
                              • The consumer – influences on brand choice for technology products
                                • Figure 6: Influences on brand choice – technology products, July 2014
                              • The consumer – Influences on brand choice for technology services
                                • Figure 7: Influences on brand choice – technology services, July 2014
                              • The consumer – attitudes towards brand switching
                                • Figure 8: Attitudes towards brand switching – consumer technology products, July 2014
                                • Figure 9: Attitudes towards brand switching – technology and internet services, July 2014
                              • The consumer – attitudes towards technology brands
                                • Figure 10: Attitudes towards technology brands, July 2014
                              • Key issues
                                • How do domestic technology brands fare against international brands?
                                  • Are Chinese consumers loyal to brands in the technology world?
                                    • How far can technology brands stretch across categories?
                                      • Is offline presence still needed?
                                        • What it means
                                        • Issues and Insights

                                            • How do domestic technology brands fare against international brands?
                                              • The facts
                                                • The implications
                                                  • Figure 11: Perceptions of technology brands, July 2014
                                                • Are Chinese consumers loyal to brands in the technology world?
                                                  • The facts
                                                    • The implications
                                                      • Figure 12: Proportion of all-time brand owners who still own a product made by that brand, July 2014
                                                    • How far can technology brands stretch across categories?
                                                      • The facts
                                                        • The implications
                                                          • Is offline presence still needed?
                                                            • The facts
                                                              • The implications
                                                              • Trend Application

                                                                • A panic attack
                                                                  • Pay or for free
                                                                    • Local know-how
                                                                    • Technology Market Overview

                                                                      • Key points
                                                                        • Consume expenditure outlook
                                                                          • Figure 13: Consumer expenditure, by sector, 2013
                                                                          • Figure 14: Breakdown of consumer expenditure, by country comparison, 2013
                                                                        • Ownership overview
                                                                          • Figure 15: Technology products ownership, March 2014
                                                                      • Who’s Innovating?

                                                                        • Key points
                                                                          • Wearable devices – the new opportunity
                                                                            • Biometric technology is changing the way of payment
                                                                              • Samsung partners with others to reinforce product positioning
                                                                              • Companies and Brands

                                                                                • International companies
                                                                                  • Samsung Group
                                                                                    • Latest developments
                                                                                      • Apple Inc.
                                                                                        • Latest developments
                                                                                          • Microsoft Corporation
                                                                                            • Latest developments
                                                                                              • Google
                                                                                                • Latest developments
                                                                                                  • Sony Corporation
                                                                                                    • Latest developments
                                                                                                      • Amazon.com, Inc.
                                                                                                        • Latest developments
                                                                                                          • Local companies
                                                                                                            • Tencent Holding Limited
                                                                                                              • Latest developments
                                                                                                                • Baidu, Inc.
                                                                                                                  • Latest developments
                                                                                                                    • Alibaba Group
                                                                                                                      • Latest developments
                                                                                                                        • Lenovo Group Ltd.
                                                                                                                          • Latest developments
                                                                                                                            • Huawei Technologies Co. Ltd.
                                                                                                                              • Latest developments
                                                                                                                                • Xiaomi Inc.
                                                                                                                                  • Latest developments
                                                                                                                                  • The Consumer – Ownership and Awareness of Technology Brands

                                                                                                                                    • Key points
                                                                                                                                      • High awareness for all the brands across tier one to three cities
                                                                                                                                        • Figure 16: Awareness of the brands, July 2014
                                                                                                                                        • Figure 17: Year of establishment and year of China entry of technology brands, 2014
                                                                                                                                      • Microsoft is still the most owned international technology brand
                                                                                                                                        • Figure 18: Ownership and awareness of technology brands – international brands, July 2014
                                                                                                                                      • “BAT” dominates
                                                                                                                                        • Figure 19: Ownership and awareness of technology brands – domestic brands, July 2014
                                                                                                                                      • Troubled Sony
                                                                                                                                        • Figure 20: Summary of technology brand awareness and awareness-to-usage conversion – international and domestic brands, July 2014
                                                                                                                                      • Gender preferences for Microsoft, Sony and Huawei
                                                                                                                                        • Figure 21: Current usage of technology brands, by gender, July 2014
                                                                                                                                      • Young men favour Xiaomi
                                                                                                                                        • Figure 22: Current usage of technology brands – international brands, by gender and age, July 2014
                                                                                                                                      • People from tier one cites adore Apple
                                                                                                                                        • Figure 23: Current usage of technology brands – international brands, by city tier, July 2014
                                                                                                                                        • Figure 24: Current usage of technology brands – domestic brands, by city tier, July 2014
                                                                                                                                      • Consumers use multiple technology brands
                                                                                                                                        • Figure 25: Current usage of technology brands, by number of brands used, July 2014
                                                                                                                                      • Number of brands people use correlates with income and city tier
                                                                                                                                        • Figure 26: Current usage of technology brands, by number of brands used, by monthly personal income and city tier July 2014
                                                                                                                                    • The Consumer – Perceptions of Technology Brands

                                                                                                                                      • Key points
                                                                                                                                        • Apple builds a premium and innovative image which currently no one matches
                                                                                                                                          • Figure 27: Perceptions of technology brands – international brands, July 2014
                                                                                                                                        • Correspondence analysis methodology
                                                                                                                                          • Correspondence analysis
                                                                                                                                            • Figure 28: Perceptions of technology brands, July 2014
                                                                                                                                        • The Consumer – Influences on Brand Choice for Technology Products

                                                                                                                                          • Key points
                                                                                                                                            • Brand plays a key role in technology product purchase
                                                                                                                                              • Figure 29: Influences on brand choice – technology products, July 2014
                                                                                                                                            • Brand is more important for men, 30-39-year-olds and people with monthly income more than RMB3,000
                                                                                                                                              • Figure 30: Top three influences on choice of technology product brand, by gender, age, and monthly personal income, July 2014
                                                                                                                                            • Positive previous usage experience is crucial for people with limited income
                                                                                                                                              • Figure 31: Next top three influences on choice of technology product brand, by gender, age, and monthly personal income, July 2014
                                                                                                                                          • The Consumer – Influences on Brand Choice for Technology Services

                                                                                                                                            • Key points
                                                                                                                                              • Information security is of mounting importance
                                                                                                                                                • Figure 32: Influences on brand choice – technology services, July 2014
                                                                                                                                              • People with low income and education level value information security more
                                                                                                                                                • Figure 33: Top influence on choice of technology and internet service brand, by monthly personal income and education level, July 2014
                                                                                                                                              • User-friendly services are particularly important to women and people in their twenties
                                                                                                                                                • Figure 34: Next top influence on choice of technology and internet service brand, by gender and age, July 2014
                                                                                                                                              • Men, married people, and families with children care more about brand
                                                                                                                                                • Figure 35: Brand’s influence on choice of technology and internet service brand, by gender, marital status and children in household, July 2014
                                                                                                                                              • People with higher income level also consider additional factors
                                                                                                                                                • Figure 36: Other influences on choice of technology and internet service brand, by monthly personal income, July 2014
                                                                                                                                            • The Consumer – Attitudes towards Brand Switching

                                                                                                                                              • Key points
                                                                                                                                                • Technology advancement encourages people to switch brands
                                                                                                                                                  • Figure 37: Attitudes towards brand switching – consumer technology products, July 2014
                                                                                                                                                • User-friendly services helps to retain consumers
                                                                                                                                                  • Figure 38: Attitudes towards brand switching – technology and internet services, July 2014
                                                                                                                                                • Men are more likely to stick to currently used technology services
                                                                                                                                                  • Figure 39: Attitudes towards brand switching – technology and internet services, by age and gender, July 2014
                                                                                                                                              • The Consumer – Attitudes towards Technology Brands

                                                                                                                                                • Key points
                                                                                                                                                  • Consumers use brands to show their lifestyle aspirations
                                                                                                                                                    • Figure 40: Attitudes towards technology brands – lifestyle and status-related, July 2014
                                                                                                                                                  • Consumers feel more emotional benefits while income grows
                                                                                                                                                    • Figure 41: Attitudes towards technology brands – lifestyle and status-related, by income on any agree, July 2014
                                                                                                                                                  • Most people are satisfied with domestic brands, but they still have room to improve
                                                                                                                                                    • Figure 42: Attitudes towards technology brands – international versus domestic brands, July 2014
                                                                                                                                                  • Consumers want one brand for multitasking
                                                                                                                                                    • Figure 43: Attitudes towards technology brands – brand stretching across categories, July 2014
                                                                                                                                                  • Consistent promotion activities are important
                                                                                                                                                    • Figure 44: Attitudes towards technology brands – price-related, July 2014
                                                                                                                                                  • Men in their twenties, women above 30 and people with high income are more willing to pay premium for well-known brand
                                                                                                                                                    • Figure 45: Attitudes towards technology brands – price-related, by gender and age, and income, July 2014
                                                                                                                                                  • It is essential to offer consistent quality of pre and aftersales services and build usability first
                                                                                                                                                    • Figure 46: Attitudes towards technology brands – experience and innovation, July 2014
                                                                                                                                                • Appendix – The Consumer – Ownership and Awareness of Technology Brands

                                                                                                                                                    • Figure 47: Ownership and awareness of technology brands, July 2014
                                                                                                                                                    • Figure 48: Ownership and awareness of technology brands – Current users of international brands, by demographics, July 2014
                                                                                                                                                    • Figure 49: Ownership and awareness of technology brands – Apple, by demographics, July 2014
                                                                                                                                                    • Figure 50: Ownership and awareness of technology brands – Samsung, by demographics, July 2014
                                                                                                                                                    • Figure 51: Ownership and awareness of technology brands – Sony, by demographics, July 2014
                                                                                                                                                    • Figure 52: Ownership and awareness of technology brands – Microsoft, by demographics, July 2014
                                                                                                                                                    • Figure 53: Ownership and awareness of technology brands – Google, by demographics, July 2014
                                                                                                                                                    • Figure 54: Ownership and awareness of technology brands – Amazon, by demographics, July 2014
                                                                                                                                                    • Figure 55: Ownership and awareness of technology brands – Current users of local brands, by demographics, July 2014
                                                                                                                                                    • Figure 56: Ownership and awareness of technology brands – Lenovo, by demographics, July 2014
                                                                                                                                                    • Figure 57: Ownership and awareness of technology brands – Huawei, by demographics, July 2014
                                                                                                                                                    • Figure 58: Ownership and awareness of technology brands – Xiaomi, by demographics, July 2014
                                                                                                                                                    • Figure 59: Ownership and awareness of technology brands – Taobao/Tmall, by demographics, July 2014
                                                                                                                                                    • Figure 60: Ownership and awareness of technology brands – Tencent, by demographics, July 2014
                                                                                                                                                    • Figure 61: Ownership and awareness of technology brands – Baidu, by demographics, July 2014
                                                                                                                                                  • Repertoire analysis
                                                                                                                                                    • Figure 62: Repertoire of ownership and awareness of technology brands, July 2014
                                                                                                                                                    • Figure 63: Repertoire of ownership and awareness of technology brands, by demographics, July 2014
                                                                                                                                                    • Figure 64: Attitudes towards technology products and services, by repertoire of ownership and awareness of technology brands, July 2014
                                                                                                                                                • Appendix – The Consumer – Perceptions of Technology Brands

                                                                                                                                                    • Figure 65: Perceptions of international technology brands, July 2014
                                                                                                                                                    • Figure 66: Perceptions of domestic technology brands, July 2014
                                                                                                                                                    • Figure 67: Most popular perceptions of technology brands – Apple, by demographics, July 2014
                                                                                                                                                    • Figure 68: Next most popular perceptions of technology brands – Apple, by demographics, July 2014
                                                                                                                                                    • Figure 69: Most popular perceptions of technology brands – Samsung, by demographics, July 2014
                                                                                                                                                    • Figure 70: Next most popular perceptions of technology brands – Samsung, by demographics, July 2014
                                                                                                                                                    • Figure 71: Most popular perceptions of technology brands – Sony, by demographics, July 2014
                                                                                                                                                    • Figure 72: Next most popular perceptions of technology brands – Sony, by demographics, July 2014
                                                                                                                                                    • Figure 73: Most popular perceptions of technology brands – Microsoft, by demographics, July 2014
                                                                                                                                                    • Figure 74: Next most popular perceptions of technology brands – Microsoft, by demographics, July 2014
                                                                                                                                                    • Figure 75: Most popular perceptions of technology brands – Google, by demographics, July 2014
                                                                                                                                                    • Figure 76: Next most popular perceptions of technology brands – Google, by demographics, July 2014
                                                                                                                                                    • Figure 77: Most popular perceptions of technology brands – Amazon, by demographics, July 2014
                                                                                                                                                    • Figure 78: Next most popular perceptions of technology brands – Amazon, by demographics, July 2014
                                                                                                                                                    • Figure 79: Most popular perceptions of technology brands – Lenovo, by demographics, July 2014
                                                                                                                                                    • Figure 80: Next most popular perceptions of technology brands – Lenovo, by demographics, July 2014
                                                                                                                                                    • Figure 81: Most popular perceptions of technology brands – Huawei, by demographics, July 2014
                                                                                                                                                    • Figure 82: Next most popular perceptions of technology brands – Huawei, by demographics, July 2014
                                                                                                                                                    • Figure 83: Most popular perceptions of technology brands – Xiaomi, by demographics, July 2014
                                                                                                                                                    • Figure 84: Next most popular perceptions of technology brands – Xiaomi, by demographics, July 2014
                                                                                                                                                    • Figure 85: Most popular perceptions of technology brands – Taobao/Tmall, by demographics, July 2014
                                                                                                                                                    • Figure 86: Next most popular perceptions of technology brands – Taobao/Tmall, by demographics, July 2014
                                                                                                                                                    • Figure 87: Most popular perceptions of technology brands – Tencent, by demographics, July 2014
                                                                                                                                                    • Figure 88: Next most popular perceptions of technology brands – Tencent, by demographics, July 2014
                                                                                                                                                    • Figure 89: Most popular perceptions of technology brands – Baidu, by demographics, July 2014
                                                                                                                                                    • Figure 90: Next most popular perceptions of technology brands – Baidu, by demographics, July 2014
                                                                                                                                                • Appendix – The Consumer – Influences on Brand Choice for Technology Products

                                                                                                                                                    • Figure 91: Influences on choice of technology product brand, July 2014
                                                                                                                                                    • Figure 92: Most popular influences on choice of technology product brand, by demographics, July 2014
                                                                                                                                                    • Figure 93: Next most popular influences on choice of technology product brand, by demographics, July 2014
                                                                                                                                                • Appendix – The Consumer – Influences on Brand Choice for Technology Services

                                                                                                                                                    • Figure 94: Influences on choice of technology/internet service brand, July 2014
                                                                                                                                                    • Figure 95: Most popular influences on choice of technology/internet service brand, by demographics, July 2014
                                                                                                                                                    • Figure 96: Next most popular influences on choice of technology/internet service brand, by demographics, July 2014
                                                                                                                                                    • Figure 97: Other influences on choice of technology/internet service brand, by demographics, July 2014
                                                                                                                                                • Appendix – The Consumer – Attitudes towards Technology Brands

                                                                                                                                                    • Figure 98: Attitudes towards technology products and services, July 2014
                                                                                                                                                    • Figure 99: Attitudes towards technology products and services – Consumer technology products, by demographics, July 2014
                                                                                                                                                    • Figure 100: Attitudes towards technology products and services – Internet and technology services, by demographics, July 2014
                                                                                                                                                    • Figure 101: Attitudes towards technology products and services, by current ownership of technology brands – International brands, July 2014
                                                                                                                                                    • Figure 102: Attitudes towards technology products and services, by current ownership of technology brands – Local brands, July 2014
                                                                                                                                                • Appendix – The Consumer – Attitudes towards Technology Brands

                                                                                                                                                    • Figure 103: Attitudes towards technology brands, July 2014
                                                                                                                                                    • Figure 104: Agreement with the statement ‘Technology products from local brands are as good as those from international brands’, by demographics, July 2014
                                                                                                                                                    • Figure 105: Agreement with the statement ‘Compared to international internet companies, the services provided by local internet companies are more closely linked with our daily life’, by demographics, July 2014
                                                                                                                                                    • Figure 106: Agreement with the statement ‘The products/services provided by local technology brands meet my expectation in terms of performance’, by demographics, July 2014
                                                                                                                                                    • Figure 107: Agreement with the statement ‘It is convenient to use different technology products/services from the same brand’, by demographics, July 2014
                                                                                                                                                    • Figure 108: Agreement with the statement ‘Advertisements focusing on building brand image rather than displaying products functions impress me more’, by demographics, July 2014
                                                                                                                                                    • Figure 109: Agreement with the statement ‘It is worth paying more for technology products/services provided by a well-known brand’, by demographics, July 2014
                                                                                                                                                    • Figure 110: Agreement with the statement ‘It is important for brands to keep consistent pricing when carrying out promotional activities in different channels’, by demographics, July 2014
                                                                                                                                                    • Figure 111: Agreement with the statement ‘Using premium technology brands helps me gain ‘face’’, by demographics, July 2014
                                                                                                                                                    • Figure 112: Agreement with the statement ‘The technology brand you use can reflect your desired lifestyle’, by demographics, July 2014
                                                                                                                                                    • Figure 113: Agreement with the statement ‘Newly emerged technology brands provide more innovative products/services than established brands’, by demographics, July 2014
                                                                                                                                                    • Figure 114: Agreement with the statement ‘Usability is more important than brand’, by demographics, July 2014
                                                                                                                                                    • Figure 115: Agreement with the statement ‘The quality of presales experience service is as important as aftersales when choosing a technology brand’, by demographics, July 2014
                                                                                                                                                    • Figure 116: Attitudes towards technology brands, by current ownership of technology brands – International brands, July 2014
                                                                                                                                                    • Figure 117: Attitudes towards technology brands, by current ownership of technology brands – Local brands, July 2014

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                                                                                                                                                The Importance of Brands in Technology - China - October 2014

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