Consumers in HK and China view innovation in brands differently

Consumers in Hong Kong and China view the concept of 'innovation' differently from, not just the rest of the world, but each other, finds a five-market study by Ketchum.

Perceptions of innovaton vary widely between regions and even neighbouring markets. For instance, while consumers in China, and in the US, place a significant amount of weight on a company’s legacy success, product design, speed to market and the talent’s of the company’s leader, conversely, consumers in Hong Kong place the least value on those qualities.

In Hong Kong, consumers are more brand loyal, decreasing the influence of innovation marketing on their perception, found the study.

The online survey was conducted by Marc Research and Ketchum Global Research & Analytics in January 2015. It polled more than 4,000 working adults in five markets namely: Mainland China, Hong Kong, the US, the UK and Spain.

The study also learnt that while healthcare came out at the top for importance of innovation in most markets, consumers in Hong Kong and China care more about innovation in computers.

These differences extend to consumer expectations. While globally, consumers typically expect companies to innovate whenever new advancements become available (47 percent), Hong Kongers expect new products every year (30 percent) and upgrades every six months (28 percent).

Furthermore, 80 percent of shoppers in Hong Kong and 89 percent in China are willing to pay more for brand innovation. A number that is significantly hire than consumers in the other markets.

When it comes to the measure of innovation, Mainland China places greater trust in professional reviews, more so than other markets with the exception of Spain. Chinese consumers also rely on media articles, advice from friends and family and social platforms. In Hong Kong, however, social platforms are the most consulted channel.

Overall findings: Innovation is no longer about first-to-market

While being first-to-market used to be a critical element in being regarded as an industry innovator, it no longer bears that much weight in the consumer’s eye. Instead, consumers overall cite a company’s proven track record of launching successful technology products as the most important factor (47 percent).

This may be due to today’s rapid product commoditisation cycles which grants first-to-market entrants a much shorter timeline advantage, writes the report’s author, Susan Butenhoff, partner and director of Ketchum’s global technology practice. "Also in a more globally competitive manufacturing environment, innovation is less about timing than it is about a company’s proven track record in delivering new products that don’t disappoint."

Slapping a new label on a product and refreshing its design is also not enough to be considered an ‘innovation’ by most. Game-changing product innovations boil down to quality of life impact (58 percent). But consumers don’t expect product innovations to change the ways they do everything, found the study. Instead, they want to be more efficient (57 percent) or to do something they never thought possible.

"With the maturing of the technology market, innovation is crossing category boundaries," said David Vindel, managing director of Ketchum’s European Technology Practice. "It is increasingly as much about enhancing lifestyle and convenience as it is about the product features and function."

If brands meet these expectations, consumers are willing to pay more for their products. The study found that 68 percent of consumers are on average willing to pay 21 percent more for innovative brands. Out of the five markets, this is most distinct in China, where 89 percent are willing to pay 24 percent more, and in Hong Kong, where 80 percent will pay 21 percent more.

"The good news is that innovation has not been reduced to a meaningless buzzword – it still has the power to influence corporate and brand reputation and even command a higher price at the checkout counter," said Butenhoff. "But companies that want to tell their innovation story need to know that in the eyes of the consumer, innovation must be earned, not bought."

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