Foreign banks' efforts to build brand awareness in China's mass market are starting to bear fruit but their brand images still lag behind their Chinese counterparts, Nielsen said in a survey finding yesterday.
Nielsen surveyed more than 11,500 Chinese consumers in 18 cities between April and December last year.
Nielsen found an increase in consumers' unaided recall of foreign bank brands in Shanghai, Guangzhou, Beijing, Chengdu and Shenzhen ?? the five major cities surveyed.
Shanghai recorded the highest recall rate for foreign banks, followed by Guangzhou and Beijing.
The survey also found a significant year-on-year increase in the number of consumers in major cities preferring foreign banks for investment products.
In second tier cities however, more work is needed on brand awareness for foreign banks, the survey found.
Of all image characteristics measured by Nielsen, foreign banks were rated higher than their local counterparts in the area of "representing social status and success", which should help foreign banks further develop their premier customer segment.
The Nielsen study found overseas banks lagged behind their Chinese counterparts, in the view of local consumers, because they lacked an extensive ATM network and adequate product range.
Surprisingly "good service", which overseas banks often boast, also found itself among the relatively lower ranked image measures for foreign banks.
"Foreign banks will be heartened that their expansion efforts are being noticed by Chinese consumers. However, there is still work to be done to encourage more Chinese consumers to knock on the doors of the foreign banks," said Kenneth Lee, Executive Director of Nielsen China.
"To grow market share, foreign banks need to invest further in hardware such as ATM networks, and in more aggressive communications to develop stronger brand images," he said.
Overseas banks have been allowed to have full access to China's retail local currency market since the end of 2006. Since then, foreign players like HSBC, Citigroup, Bank of East Asia and Standard Chartered have expanded their market share in China by setting up local incorporations, adding networks, workforce, and services.
(Shanghai Daily April 15, 2008)
