After several years of branding work, Taiwan's HTC Corp., a globally known smartphone supplier, is reaping the fruits of its efforts. The HTC brand is now valued at around US$3.605 billion, topping the list of the island's “top 20 International brands” this year.
Driven by rapidly growing brand recognition worldwide, HTC has doubled its brand value from US$1.37 billion only last year, when Acer Inc., one of the world's top five PC vendors, headed the list with a brand value of US$1.4 billion.
HTC's brand value this year is more than the total of No.2 Acer, with US$1.94 billion, and No.3 Asustek Computer Inc., with US$1.637 billion. Market observers believe that HTC is very likely to squeeze into the list of the world's top 100 brands in the year.
Everybody in Taiwan agrees that HTC, which spent less than five years building a global brand, is a huge success as well as a living example for Taiwanese enterprises, especially those that want to achieve sustainable development by upgrading from low-margin manufacturing to own-brand marketing.
At the branding awards ceremony jointly organized by the Taiwan External Trade Development Council (TAITRA) and the Bureau of Foreign Trade, HTC's CEO, Peter Chou, said that he is proud of and amazed by his company's current achievements in branding, for which it owes a great deal to consumers worldwide.
Chou recalled that HTC's determination to develop a global brand was regarded as a bold strategy five years ago, when most Taiwanese enterprises hesitated to take on branding because of its cost and risk. Citing his company's success, he urged Taiwanese companies to build their own brands according to their core competencies.
But branding can take a lot of time and patience, and is not likely to pay off immediately, stressed Chou. He compared developing a brand to carrying out forestation: both take considerable time and effort to produce a profit. “You have to make an investment, spend time, and stay patient," he said.
Since it decided to pursue branding, Chou stated, HTC has not feared failure. “Even if we failed,” he said, “the process would help to produce positive results for Taiwan.”
Chou concluded his remarks at the ceremony by emphasizing that a successful brand not only needs to satisfy consumers with technological and functional appeal, but that it also has to build an emotional connection with them in communicating its value and image. “We are not content with our current achievements,” he commented, “but will work harder to better compete globally, especially at this time of increasingly intense global competition.”
A Good Year
HTC has fared quite well so far in 2011 and is poised to chalk up strong business growth for the third year in a row.
With its smartphones selling well worldwide, the company raked in NT$273.666 billion in revenue during the first seven months of this year, up an astounding 121% from the same period of 2010. Its after-tax profit of NT$17.5 billion in the second quarter was a record high.
The company is also optimistic about its second-half prospects, projecting smartphone sales of 13.5 million units and revenues of NT$137 billion in the third quarter, representing increases of 11.3% and 10% from the previous quarter, respectively. Earnings per share (EPS) for the quarter are expected to be between NT$22 and NT$23.
In addition to the U.S. and European markets, HTC's business growth will also be driven by sales in China. The company is moving to expand its sales network there, aiming to triple the number of its local retail stores from 650 now to 2,000 by the end of this year.
Strong Growth of Taiwanese Brand Value
Actively expanding their overseas markets and benefiting from the cross-straits ECFA (Economic Cooperation Framework Agreement) that came into force this year, Taiwan's international brands have effectively enlarged their foothold worldwide, especially in Europe and the U.S.
Interbrand Corp., a globally leading brand consultancy company commissioned by TAITRA to survey Taiwan's top 100 brands, issued a report indicating that the total value of Taiwan's top 20 international brands has shot up to US$13.03 billion, a 40% growth compared to last year. The value of the top 10 surged 43.9%, to US$11.558 billion. TAITRA chairman Wang Chih-kang stated that both brand-value figures are record highs.
These results have inspired officials in the Ministry of Economic Affairs, who have assisted Taiwanese companies in developing global brands for years with the aim of boosting the total value of the top five and top 20 brands to US$1 billion and US$10 billion, respectively, in 2012, with the value of the two largest brands reaching at least US$1.5 billion each. That goal was already achieved this year.
Notably, Interbrand's report puts the KGI Securities Co. last among Taiwan's top 20 international brands with brand value of US$99 million—the first financial service company to make the list. This indicates that more and more Taiwanese companies from industries other than PCs and electronics are putting an increasing emphasis on branding.
The emergence of 85°C, a budget-priced coffee chain owned by Gourmet Master Co., also shows the growing variety of Taiwan's brand development. The coffee company squeezed into the top-20 list for the first time this year with a brand value of US$219 million, ranking 11th.
Delta Electronics Inc., which has transformed itself from a power supply manufacturing and electronic original design manufacturing (ODM) business into a provider of system solutions with its own brand, is another newcomer to the list. Delta's brand value stands at US$139 million, putting the company in the No.17 spot.
Interbrand's report noted that Acer posted a 38.5% growth in brand value this year, despite business slumps and a management reorganization, due partly to its already robust brand recognition in Europe and the U.S. and partly to the payoff from its partnership with the Founder Group in the joint development of China's PC market.
|Taiwan'sTop 20 International Brands in 2011 by Value|
|Brand Value||Ranking in 2010|
Asustek Computer Inc.
Trend Micro Inc.
Tingyi Holding Corp.
(Instant noodles & beverages)
Want Want Holdings Ltd.
Giant Manufacturing Co
Cheng Shin Rubber Industry Co.
Synnex Technology International Corp.
(3C product distribution)
(Embedded computing systems)
Gourmet Master Co.
(Beverages & cakes)
Merida Industry Co.
Transcend Information Inc.
Zyxel Communications Corp.
Delta Electronics Inc.
(Power supplies, system solutions)
Uni-President Enterprises Corp.
(Convenience store chain, food & beverages)
Johnson Health Tech Co.
KGI Securities Co.
Source: Interbrand Corp.
(by Steve Chuang)