Apple, Nike Lose Favor With Chinese Consumers

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A new survey has found that big retailers like Apple and Nike are losing favor in China, as consumers are showing a preference towards local brands.

The report by consultancy firm Prophet on China’s 50 most relevant brands found that Chinese brands now take up 30 of the 50 slots — a significant change from just two years ago, when only 18 local companies made the top 50.

“Chinese brands have been better at leveraging social media to reach out to shoppers in China,” said Catherine Lim, a Bloomberg Intelligence analyst. “There’s a stronger buzz.”

Online payment operator Alipay, owned by an affiliate of Alibaba, topped the list, while food delivery service Meituan Dianping broke into the top 10 for the first time.

But many Western brands didn’t even make it into the top 10 this year. Nike fell to number 44, while automaker BMW AG dropped to number 46. Estee Lauder fell to number 22, although it is still the top-ranked label for cosmetics, and home-furnishing retailer Ikea, fourth on last year’s list, didn’t make it into the top 30 this year.

The survey also spells trouble for Apple, which counts China as its second biggest market. The California-based company has struggled there as domestic rivals like Huawei Technologies and Xiaomi become more popular. In fact, last year a study of 1,000 Chinese consumers indicated that for the first time Huawei has edged out Apple for being the number one smartphone consumers are preparing to purchase. And earlier this year it was reported that shoppers in Asia were choosing Chinese smartphones from the likes of Xiaomi, OPPO and Vivo over the iPhone X.

It seems the mystique of the foreign brand is fading in China’s major cities, said Benoit Garbe, a Prophet senior partner in Shanghai. “Consumers are getting more sophisticated,” he said. “We are seeing local brands — the good ones — popping up as more relevant.”


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