Chinese Consumers Willing to Pay More than United States and European Consumers for Brands that Offer Elegantly Simple Experiences and Interactions
Siegel+Gale’s Global Brand Simplicity Index™ Ranks Top Brands Consumers Deem Least Complex
BEIJING AND SHANGHAI, FEBRUARY 16, 2011 – While consumers around the world have been forced to grapple with the challenges of increasingly complex environments, Chinese consumers are willing to pay more than others for brands that help create a less complex lifestyle. This is a key finding of the first annual Global Brand Simplicity Index™, released today by global strategic branding firm, Siegel+Gale. This survey of more than 6,000 consumers across seven countries uncovered the perceived points of complexity in people’s lives, as well as a Simplicity Premium™, the added value people would place on having less complex experiences with brands in various industries. According to the survey, Chinese consumers are willing to pay between 5 and 8 percent more for brands that offer simple experiences and interactions. That’s nearly double the percentage reported by consumers in North America and Europe.
Industries with the most to gain from minimizing complexities include telecommunications and technology/electronics. Specifically within the telecommunications: cell phone industry, 30 percent of Chinese consumers claim they would be willing to spend more for brand experiences that make their lives easier—this in comparison to 13 percent of United States consumers and 12 percent of consumers in the United Kingdom.
Chinese consumers view the hotel, restaurant and retail grocery industries as offering the least complex interactions and communications. Despite the dominance of Asian brands on the China Brand Simplicity Index™ top 10, American restaurant brands also scored well, with McDonald’s securing the highest rating and KFC closely following.
Conversely, the mortgage, utilities and insurance industries are rated as most complex and least clear. Insurance brands, in particular, tend to be viewed as more complex in China than in any other region. In fact, all the insurance brands appearing in the index occupy spots near the bottom of the ranking, with an almost 200-point gap separating People’s Insurance Company of China in the number  spot from Volkswagen at number .
Expressing the challenges of interacting with insurance brands, one respondent said, “Brochures from insurance companies are so difficult to understand that even after reading them over and over again, I still don’t know what I’m getting.”
Another consumer responded, “Insurance companies have such frustrating marketing practices, almost with the intent to deceive, all just to get you to sign up.”
Defining the Impact of Complexity
To understand how and in what context complexity affects the lives of Chinese consumers, the Siegel+Gale survey examined respondents’ answers to the following types of questions:
- How complex do people feel their lives are? Over the years, how has this changed?
- What business sectors contribute most to making people’s lives more or less complex?
- What brands are clearest and less confusing in their communications and interactions with consumers?
- What value do less complicated communications and interactions provide to consumers?
Recognizing that complexity prevents organizations from realizing their true potential, Siegel+Gale used the survey results to develop the first ever Global Brand Simplicity Index™ which generates a Simplicity Score™— a rating of each brand and its category on the elements of the simplicity methodology. Siegel+Gale defines simplicity as ease of understanding, transparency, caring, innovation and usefulness of communications, as well as how painful typical interactions are in relation to industry peers.
The Chinese Brand Simplicity Index™ top 10 brands are:
Key survey findings from respondents revealed that the top brands on the Global Brand Simplicity Index™ make people’s lives less complex by:
- Communicating directly, clearly and without jargon
- Reducing stress by providing savings/value
- Saving time by increased convenience and accessibility
- Facilitating ease of use and interactions
- Enabling consumers to get more from life: deeper relationships, easier going lifestyles
“The message to brands, both locally and globally, is that Chinese consumers will actually reward your efforts for simplifying your products and services,” says Eric Lin, general manager, Siegel+Gale Shanghai. “When it comes to interacting with brands that are overly complex or difficult to understand, Chinese consumers react in ways not dissimilar from consumers in other regions.”
“While our survey results show a strong preference for local Chinese brands, which are perceived to support a less complex lifestyle, global brands should not be discouraged,” says Warren Wang, managing director Siegel+Gale China. “Local brands will continue to thrive as long as they continue to avoid complex interactions and communications. Likewise, global brands looking to establish themselves in the region will have more financial success by adapting to local tastes in ways that are clear, transparent and easy to enjoy.”
Key survey findings from respondents revealed that the lowest rated brands on the Global Brand Simplicity Index™ make people’s lives more complex by:
- Communicating in ways that are hard to understand and/or perceived as deceitful
- Being perceived to intentionally overcharge
- Being seen as ‘niche’ or targeted to too selective of an audience / not accessible
- Being found difficult to interact with, with poor customer service experiences and/or hard to use interfaces
Review the full survey results here.
About the Global Brand Simplicity Index™
Siegel+Gale’s Global Brand Simplicity Index™ is an output of global brand ratings based on an online survey of more than 6,000 consumers in seven different countries. Each rating comprises the simplicity/complexity of a brand’s interactions and communications in relation to their industry peers. The index also incorporates an industry simplicity score for a particular brand’s industry/category(ies).
Siegel+Gale is a global strategic branding firm committed to building world-class brands through elegantly simple, unexpectedly fresh strategies, stories and experiences. With Simple is Smart as its operating philosophy, Siegel+Gale delivers powerful services in brand development, simplification, research, and digital strategy.
Since its founding by branding pioneer Alan Siegel in 1969, Siegel+Gale has helped drive business results for brands such as Aetna, American Express, Bank of America, China Youth Development Foundation, Dell, Dow Chemical Company, The Four Seasons Hotels and Resorts, The Internal Revenue Service, The King Abdullah University of Science and Technology, Microsoft, Motorola, Pfizer, Qatar Telecom, SAP, Sony PlayStation, Yahoo! and the YMCA.
Siegel+Gale has offices in New York, Los Angeles, San Francisco, London, Hamburg, Dubai, Shanghai and Beijing and strategic partnerships around the world as a member of the Omnicom Group of companies.
For more information please contact Gail Nelson at 212.453.0400 or [email protected].