These days, any brand is just a keystroke away from customers overseas. The rise of the global sales channel offers great opportunities for existing global brands, but even more so for new brands that aspire to go global. Implications will be discussed and managerial takeaways provided.

1. © Prof. J-B.E.M. Steenkamp
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Jan-Benedict E.M. Steenkamp
Massey Distinguished Professor of Marketing,
Marketing Area Chairman & Fellow iSIG, Fudan University
Lecture at the MBA Fudan Forum
Fudan University (Shanghai)
March 2, 2017
Global Brand Building
in the Digital Age

2. © Prof. J-B.E.M. Steenkamp
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The digital revolution

3. © Prof. J-B.E.M. Steenkamp
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4. © Prof. J-B.E.M. Steenkamp
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5. © Prof. J-B.E.M. Steenkamp
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6. © Prof. J-B.E.M. Steenkamp
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Brands born in the digital world
Brand Brand value
($bn in 2016)
Rank in Global
Top-100 (2016)
Google 229.2 1
Facebook 102.6 5
Amazon 99.0 7
Tencent 84.9 11
Alibaba 49.3 18
Baidu 29.0 29
Linkedin 12.3 85
Ebay 11.5 91
JD.com 10.5 99
Source: Millward Brown BrandZ (2016)

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The rise of the digital sales channel

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Global brand building via digital sales channels
Implications for existing global brands
 Penetration of hitherto unreachable regions

9. © Prof. J-B.E.M. Steenkamp
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Reaching hitherto unserved
markets

10. © Prof. J-B.E.M. Steenkamp
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Global brand building via digital sales channels
Implications for existing global brands
 Penetration of hitherto unreachable regions
 Digital buying favors trusted established global
brands
 Increased arbitrage
 Counterfeits favor well-known global brands
 Mix of on- and offline advertising

11. © Prof. J-B.E.M. Steenkamp
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Digital ad spending worldwide
Digital ad spending worldwide
% of total media ad spending
% change

12. © Prof. J-B.E.M. Steenkamp
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Global brand building via digital sales channels
Implications for existing global brands
 Penetration of hitherto unreachable regions
 Digital buying favors trusted established global
brands
 Increased arbitrage
 Counterfeits favor global brands
 Mix of on- and offline advertising
 Power shift to e-retailers

13. © Prof. J-B.E.M. Steenkamp
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Net sales revenue of Amazon
+1451%

14. © Prof. J-B.E.M. Steenkamp
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Net sales revenue Walmart
+23%

15. © Prof. J-B.E.M. Steenkamp
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Global brand building via digital sales channels
Implications for existing global brands
 Penetration of hitherto unreachable regions
 Digital buying favors trusted established global
brands
 Increased arbitrage
 Counterfeits favor global brands
 Mix of on- and offline advertising
 Power shift to e-retailers
 Leverage the long-tail

16. © Prof. J-B.E.M. Steenkamp
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Leverage the long tail with the digital sales
channel
• Many niches are not
local but global
• Niches too small to
be profitable using
brick-and-mortar
distribution
• Target market willing
to pay a price
premium
• Less-known global
niche products
benefit especially
from global well-
known brand name
• Many hits start as
niche products

17. © Prof. J-B.E.M. Steenkamp
Not to be reproduced without permission
Global brand building via digital sales channels
Implications for existing global brands
 Penetration of hitherto unreachable regions
 Digital buying favors trusted established global
brands
 Increased arbitrage
 Counterfeits favor global brands
 Mix of on- and offline advertising
 Power shift to e-retailers
 Leverage the long-tail
Implications for new brands
 Every brand can now be global in a
keystroke
 Potential for niche brands targeted at
global micro segments

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Sand River

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Sand River shop in Shanghai -

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Going digital

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And overlaying that
with promotion and
dual distribution
strategy abroad

22. © Prof. J-B.E.M. Steenkamp
Not to be reproduced without permission
Global brand building via digital sales channels
Implications for existing global brands
 Penetration of hitherto unreachable regions
 Digital buying favors trusted established global
brands
 Increased arbitrage
 Counterfeits favor global brands
 Power shift to e-retailers
 Leverage the long-tail
Implications for new brands
 Every brand can now be global in a
keystroke
 Potential for niche brands targeted at
global micro segments
 Scaling to global level is faster

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From local to global –
Facebook

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The Airbnb explosion

25. © Prof. J-B.E.M. Steenkamp
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26. © Prof. J-B.E.M. Steenkamp
Not to be reproduced without permission
Global brand building via digital sales channels
Implications for existing global brands
 Penetration of hitherto unreachable regions
 Digital buying favors trusted established global
brands
 Increased arbitrage
 Counterfeits favor global brands
 Power shift to e-retailers
 Leverage the long-tail
Implications for new brands
 Every brand can now be global in a
keystroke
 Potential for niche brands targeted at
global micro segments
 Scaling to global level is faster
 Digital channel reduces channel
advantages existing power brands

27. © Prof. J-B.E.M. Steenkamp
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Breaking into the shaving market
“In the past, challenging Gillette would have been impossible. It would have required billions
of dollars to invest in a distribution network and advertising to get the product on store
shelves. No more. Now you can get free advertising through YouTube, easy distribution
through the mail system and low-cost sales through the internet. Factories and distribution
can be bolted on throughout the globe.” NYT July 2016

28. © Prof. J-B.E.M. Steenkamp
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“Unilever and P&G are masters at traditional marketing, mostly offline, but they struggle
with the direct-to-consumer brand-building at which upstarts like Dollar Shave Club excel.
These startups conduct authentic-seeming conversations with customers over social
media, while the consumer products conglomerates take to Twitter and Facebook mostly to
address customer complaints.” Bloomberg Businessweek, July 2016
Success followed

29. © Prof. J-B.E.M. Steenkamp
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Global brand building via digital sales channels
Implications for existing global brands
 Penetration of hitherto unreachable regions
 Digital buying favors trusted established global
brands
 Increased arbitrage
 Counterfeits favor global brands
 Power shift to e-retailers
 Leverage the long-tail
Implications for new brands
 Every brand can now be global in a
keystroke
 Potential for niche brands targeted at
global micro segments
 Scaling to global level is faster
 Digital channel reduces channel
advantages existing power brands
 Forge collaboration with e-retailers

30. © Prof. J-B.E.M. Steenkamp
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SMEs: Global selling collaboration
“My vision is that in a year or two it is will become easier for Chinese businesses to open
shops on Amazon and sell products all over the world. They just need to focus on quality,
while we can help them with the difficult part like cross-nation logistics.” –
Sebastian Cunningham, global senior vice-president of Amazon

31. © Prof. J-B.E.M. Steenkamp
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Managerial takeaways
• Established global brands can reach hitherto unserved
parts of countries through the digital channel. Niche
brands can garner sufficient scale by aggregating
demand across countries.
• The boundary between local and global brands becomes
permeable. In fact, any local brand can become global at
the touch of a keystroke.
• Digital has reduced the window of response to new global entrants from
decades to a year or less. Global brands will emerge faster and from
unexpected directions. Incumbent brands must constantly surveil the
marketplace and react quickly to emerging threats. This requires vastly
increased organizational agility.
• The digital channel benefits new brands more than existing global brands.
• Rapid information flows, connectivity, and market transparency render brand
consistency across countries ever more important.
• Accept that you share control over your brand with customers.

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Further reading
Published by Palgrave
MacMillan, 2017