'IoT Ecosystem Brand White Paper' launched to begin new era
The 4th International Rendanheyi Model Forum was held at Qingdao International Conference Center. Kantar, the world’s leading insight and consulting company, Saïd Business School, University of Oxford and Haier Group jointly launched “IoT Ecosystem Brand White Paper”. This marked the birth of the world’s first brand standard in the IoT era, creating benchmarks for the growth and development of IoT ecosystem brands.
Ruimin Zhang, Chairman of the Board and CEO of Haier Group, and Doreen Wang, Kantar China CEO and Global Head of BrandZ™, jointly released the white paper at the forum.
A new wave of revolution in information technology, led by the Internet of Things, is sweeping the world. As a highly versatile technology similar to the steam engine and electricity, the IoT not only triggers a surge in productivity in all walks of life, but also kicks off a fundamental revolution after a century of brand development, leading to a gradually unfolding beautiful new world.
For an IoT ecosystem brand, the trump card to open up the beautiful new world is to always have "maximizing the value of people" at heart. The "people" here has multiple meanings – it does not only stand for users or partners, but also refers to employees and the wider public. By centering on the value of people, IoT ecosystem brands help unleash the greatest potential of all parties by encouraging users, partners, employees and the wider public to interact and co-create, achieving high-quality economic growth and unprecedented social value.
"Enterprises will die, but ecosystem will not". By maximizing the value of people, IoT ecosystem brand has created an inclusive and long-lasting new business mode and also a new brand paradigm for sustainable development.
01 Opportunities of the IoT Era
According to the Mobile Economy 2020 report by the Global System for Mobile Communications Association (GSMA), IoT connections in the world reached 12 billion in 2019 and is expected to increase to 24.6 billion by 2025. Over the next few years, global IoT revenue is expected to grow from $343 billion (about 2.4 trillion yuan) in 2019 to $1.1 trillion (about 7.7 trillion yuan) in 2025.
The world is accelerating at an unprecedented pace. Compared with the roughly 5 billion devices that have access to the mobile Internet, IoT connection is much larger in magnitude, involving everything from wearable devices, smart homes, self-driving cars, to interconnected factories and smart cities.
This new wave led by the IoT will fundamentally change the way we live and reconstruct the global industrial economy. In order to gain an advantage over the global IoT competition, enterprises must not only pursue innovation in technology and products, but also build a unique 'moat' for themselves through model innovation. Among the various innovative models empowered by the IoT, the transformation of the brand paradigm is particularly critical because it directly affects the views and participation level of end users and partners of the brand, and largely determines the future value proposition of enterprises.
This time, by working with professors from Saïd Business School, University of Oxford and Haier Group, Kantar aims to answer these important questions in this white paper: What is the new leading brand paradigm in the IoT era? What are the standards and definition of this new paradigm?
02 Paradigm of Leading Brand
in the IoT Era - IoT Ecosystem Brand
In the IoT era, the interconnection among things makes users no longer satisfied with accessing a single product / service, but start to demand a scenario-based holistic solution.
Even in a simple scenario, however, the product /service categories involved are so diverse that an enterprise cannot cover the entire spectrum of offerings. It is necessary to work with cross-industry, cross category partners to jointly create a comprehensive solution. At the same time, this collaborative relationship among enterprises should be constantly aligned in response to users' constantly changing needs. Therefore, the IoT era calls for a mode that can break the traditional industry/category barriers and effectively promote dynamic multilateral cooperation across industries. Brands that fit in this mode are called ecosystem brands.
03 Definition and Standards of
IoT Ecosystem Brand
Through in-depth expert interviews, social listening and desktop research, we have collected understandings and opinions that experts, scholars, industry players and the public have on brands in the IoT era, and set the definition and standards of IoT Ecosystem brand as below.
Definition of IoT Ecosystem Brand
Standards of IoT Ecosystem Brand
The IoT ecosystem brand features 3 perspectives, 7 criteria and 19 metrics (as listed in the chart below)
Brand Purpose Perspective
As the leading brand paradigm of the times, the IoT ecosystem brand must have a clear brand purpose. In addition to acquiring business benefits, IoT ecosystem brands also need to undertake the responsibility of creating greater value for society. This perception is closely linked with the ESG concept (Environmental, Social, Corporate Governance) that has been widely discussed and adopted in recent years. It refers to the continuous contribution of brands in promoting sustainable development and enhancing the overall value of society.
Apart from brand purpose, IoT ecosystem brands should also meet the following three criteria from the perspective of users: offer unbounded products/services; provide ever-evolving and customized integrated solutions; and make life-long users.
From the perspective of ecosystem partners, IoT ecosystem brands need to meet three criteria: keep an open, diverse, and dynamic ecosystem; enable sharing, collaboration and co-creation; and achieve value-added sharing and win-win symbiosis.
04 The Impact of
IoT Ecosystem Brand
The emergence of IoT ecosystem brand will have a fundamental impact on companies both internally and externally. Internally, developing IoT ecosystem brand requires companies to rebuild their organizational forms. Companies will need to change their employee role, organizational structure, management mode and incentive mechanism to enhance their competency to capture market opportunities and improve their responsiveness. Externally, IoT ecosystem brand will accelerate cross-industry innovation and resource sharing, contribute to building an equal and inclusive society, and boost companies' social contributions and accountability to unprecedented levels.
of IoT Ecosystem Brand
The IoT will lead to a major transformation of the traditional physical world. There are abundant opportunities and rapid changes in the IoT era. At the same time, changes of these opportunities will accelerate as technologies iterate and user needs evolve rapidly. Therefore, companies need to be able to keenly identify market opportunities and react quickly.
If companies want to keep a sharp eye out for the market, they cannot just rely on senior executives or any single department to identify market opportunities, but must enable everyone to become a touchpoint. In other words, a company needs to turn everyone into a "sensor" that can proactively identify market opportunities and meet user needs.
If companies want to have agility, they must shorten decision-making chains as much as possible and eliminate original internal organizational barriers, so that they can act quickly after discovering opportunities and transform themselves into "agile enterprises".
For most companies, organizational reinvention is needed to achieve the two goals above. Specifically, companies need to wrap up transformation in the following four aspects:
of IoT Ecosystem Brand
On top of reinventing organization, IoT ecosystem brand, as an inclusive brand paradigm, will have a long-term, far-reaching impact on the broader society. The social responsibilities of IoT ecosystem brands can be summarized as "avoiding negative externalities" and "strengthening positive externalities".
Avoid Negative Externalities
Avoiding negative externalities means that a company should do no harm to others or society due to its business. As IoT ecosystem brands have wide coverage and can leverage a wealth of resources, any action they take could have a broad impact. As such, they should proactively avoid casting negative impact on society in the midst of doing business. For example, IoT ecosystem brands must ensure data privacy and security in their ecosystem and avoid the unethical use of data. IoT ecosystem brands and their partners must abide by laws and regulations on labor rights, environmental protection, and business ethics, thus driving the entire ecosystem to develop in line with ESG principles. All these will be major challenges that IoT ecosystem brands face in the future.
Strengthen Positive Externalities
Meanwhile, as the leading brand paradigm in the IoT era, "big brands need to think big". This means that IoT ecosystem brands need to undertake more social responsibility and strive to create more positive externalities. For example, IoT ecosystem brands can use their core and unique capabilities to create social value. Based on what we've discussed previously, we could summarize the three core capabilities of IoT ecosystem brands – "connecting, empowering and sharing". By leveraging these capabilities, IoT ecosystem brands are expected to bring significant changes to society.
The groundbreaking IoT Ecosystem Brand paradigm will fundamentally change people's perception of brands, and will also help brands establish unique advantages that their competitors are unlikely to obtain anytime soon in the IoT era.
According to the BrandZ™ Top 100 Most Valuable Global Brands List, the average compound annual growth rate (2015-2020) of brand value for brands under this new paradigm was 18%. In contrast, the growth rate of other brands was a mere 6%. In the near future, any brand that hopes to lead in the IoT era must explore the path towards becoming an ecosystem brand. And the ecosystem brand will be the most forward-looking and prominent mode amid brand evolution in the IoT economic system.
We expect more companies and researchers to work with us, jointly explore and put into practice the paradigm of IoT ecosystem brands, to maximize the economic potential of this new brand paradigm and to quicken the shift towards an "equal and inclusive society with effective cross-sector co-creation and resources sharing".