00:00Now, David Hague is the chairman and CEO of Valuation Consultancy Brand Finance.
00:07Thank you for joining me.
00:09The boo-boos have gone from being a slightly cuddly but a bit weird-looking toy
00:13to a global brand worth millions.
00:15So I suppose my first question has to be to you, why?
00:20Well, I think one of the things I would say about China generally is that 20, 30 years ago,
00:25it was excellent at engineering, cost and logistics and all the basics of business.
00:32And what's happened in the last 10 years is that China has cottoned on to marketing and branding.
00:37And the boo-boo is a triumph on both.
00:39The way in which they actually market the product with secret products in the packaging,
00:44the number of variants, the way in which they use social media.
00:49I mean, it's a masterclass in how to do both.
00:51And China is now right at the top of its game with branding and marketing.
00:55And we've seen that develop into all sorts of Chinese brands, haven't we?
00:59There is a real surge in brands going on at the moment.
01:02You've got DeepSeek, you've got Bubble Tea, which is the most delicious thing in the world.
01:07Now it's everywhere in Britain.
01:09It was only in China.
01:10It's everywhere at the moment.
01:12Why do you think it's happening now that the world is cottoning on to these Chinese brands?
01:18Well, I think one of the things that's true about the Chinese economy is that costs are rising relatively
01:23and therefore they have to add more value.
01:25And I think this is something which President Xi Jinping spotted at least 10 years ago,
01:31where he said that it was necessary for Chinese companies to improve their quality design in China
01:36and create brands, particularly global brands.
01:39And there's been a huge impetus across industry in China to develop the skills necessary to do that.
01:44Now, if you look at it, China has been exceptionally good at innovation.
01:48Most of its blockbusting global brands are driven by innovation.
01:53Huawei, BYD, WeChat, DeepSeek.
01:57You know, they're right at the forefront of the new technologies.
02:00But it's not just that they're at the front in terms of engineering.
02:03They are marketing them par excellence.
02:06Now, we often talk about brands as a superpower, don't we?
02:10A soft power, rather.
02:13What can a brand achieve for a country, do you think?
02:17What do you think it achieves for China by having this brand so big globally?
02:25Well, brand finance has been measuring the top 500 brands in the world for about 20 years now.
02:30And when we first started, there were actually 13 Chinese brands that were in there.
02:34At the last count, there were 70 Chinese brands in there, worth 1.4 trillion.
02:39So just in terms of creating wealth for the country, it's very clear what brands can do.
02:44One of the interesting aspects is that for about the last seven years, we have been measuring the soft power of nations.
02:51And over that period, China's soft power measured in terms of people's preference for China and Chinese things has been rising and rising and rising.
03:00Chinese products are seen to be very innovative.
03:02Products and brands are seen to be very attractive.
03:06And China's overall soft power, we measure it as number two soft power in the world.
03:11And that soft power translates into people's willingness to buy Chinese products.
03:16Nowadays, people are not shy to call their product Chinese.
03:19David Haig, thank you very much indeed for that.
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