Global Advertising: Next Generation

Yahoo!, Nokia and Samsung came out of nowhere and conquered the world. But where will the next wave of global brands come from? Andy Milligan tips some potential stars of the future.

Fifteen years ago, Nokia was just a small town in Finland of which we knew little, Intel was merely the first two syllables of intelligence and Yahoos were characters in Gulliver's Travels. Since then, all of these names have grown to become brands of immense stature and value. But who will form the next generation of world-beating brands?

Three clear lessons can be drawn from the past 15 years. First, that newcomers are likely be in a category that captures the imagination of the consumer and has a lot of scope for growth - as telecoms and the internet have proved in the past decade. Second, they are just as likely to come from emerging markets as they are to come from the saturated Western economies (as Samsung came from South Korea and as Nokia came from Finland). Third is that, wherever they come from, they'll have the sheer bloody-mindedness of ambition, the meticulous attention to detail and the ability to nimbly adapt to changing consumer needs in the style of the great brand-builders such as Amazon, Starbucks and Apple.

So where will they come from? Unsurprisingly, the most fertile ground is Asia - especially China and with the exception of Japan. There are at least two Chinese brands worth a bet on. The top tip is Haier, a brand in a growth sector that has already established a foothold in the West.

Incorporated in 1984, Haier started life making household refrigerators but now manufactures more than 15,000 varieties of electrical appliances, which it exports to 160 countries. It enjoys a 21 per cent share of China's appliances market, fending off the challenges of globally recognised rivals, and is well-placed for growth abroad, having set up 30 production factories overseas.

Next is Lenovo, China's largest IT enterprise, which shocked the world when it formed a strategic alliance with IBM last year to create the world's third-largest PC empire. Established in 1988, Lenovo's PC business now controls 26 per cent of China's computing market, having outsold the competition for eight years on the trot. It's also the number-two PC maker in Asia-Pacific (after Japan), with a 12 per cent share. Through the IBM deal, which boosts its research capability and offers worldwide distribution channels, Lenovo has made no secret of its ambitions to lead the world's PC market.

It is a little-known fact that Taiwan already supplies the world with a number of global brands. Giant is one of the biggest names in bicycles, Acer computers line the shelves at PC World and Benq has begun to make a big impression in the consumer electronics market through its design and marketing savvy.

But one brand that has maybe yet to cross your radars is TrendMicro, which recently topped an Interbrand survey of Taiwan's most valuable global brands. Once part of Intel, TrendMicro offers internet gateway security products such as junk-mail filters. This is a dynamic market segment soon to heat up when Microsoft enters the fray. As computer ownership and internet access grow exponentially worldwide, so will the demand for security from viruses, spam and hackers. TrendMicro hopes that its software will offer the same peace of mind as an Intel processor.

Next are the brands to emerge from the boom sectors. One is healthcare, a sector that could go either of two ways. It could either be dominated by a handful of major players such as Johnson & Johnson, which would offer everything from mother-and-baby spas to the usual family care products.

Or it could fragment and allow a variety of brands to offer, on the one hand, softer lifestyle and holistic treatments and, on the other, the harder self-prescription products.

If the latter happens, expect a brand such as OSIM, a Singapore-based company big in Asia for massage chairs and other in-home health and fitness products, to grow to global prominence (OSIM has already begun to penetrate Europe and the US through franchise agreements). There is also a good argument for Dyson finally fulfilling its potential as a niche global rival to Hoover and Electrolux, driven by the conviction and ambition of its founder, the company's commitment to branding and the increasing environmental awareness of consumers.

As we have less time and more money nowadays, leisure, lifestyle and fashion brands will also grow in importance. We will want brands that give us short cuts to experiences that we would enjoy in full if only we had the time - brands that reward our daily toils with the promise of a moment of fun, adventure, exoticism or indulgence. Shanghai Tang once tried - and failed - to establish its fashion brand in the US market.

Don't be surprised to see it try again with more conviction and more success.

The "lifestyle countries", which include Latin America, South Africa and Australasia, are also worth watching for newcomers. Brahma, which boldly claimed it was to become "the world's first global beer" when it launched late last year from Brazil, is hoping to become the beer equivalent of Coca-Cola. The brewer InBev has cleverly decided to build a distinctive identity for its fledgling brand around the appeal of Brazilian life and lifestyle. Armed with global distribution power and a hefty marketing budget, Brahma could become a feature of bars from Sao Paulo to Shanghai.

Watch out for South African brands too, as the 2010 football World Cup will give them an unprecedented global platform.

In other sectors, it's hard to see where a new player can make a breakthrough - assuming the established players don't miss their footing. The car business offers an opportunity only if a radical new product - an electric car that is as exciting and affordable as a petrol-fuelled marque - comes to market. That said, we might see Hyundai pushing its brand with smarter communications and using its sponsorship of the World Cup to accelerate global recognition and demand. In the financial services sector, it's hard to see a brand that can rival, in global terms, the might of HSBC and Citibank or the ubiquity of Visa and MasterCard.

We could speculate endlessly about where the global brands of the future will come from. But despite what history tells us, given the unpredictability of global markets, the chances are that the next wave of global brands will come from where we least expect and grow faster than we can predict. - Andy Milligan is a director of Interbrand.

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