Why Chinese brands need brand equity, not just performance marketing, to win globally

Chinese brands are having a global moment.

Pop Mart’s market capitalization now exceeds the combined value of Hasbro, Mattel and Sanrio. BYD has overtaken Tesla as the world’s top-selling EV maker. Kantar’s 2025 report shows China’s top 100 brands surged 25% to a combined value of $1.2 trillion. By any measure, these breakout successes signal a new era of competitiveness on the world stage.

But the path to global growth is more complicated for brands that lack the cultural cachet of Labubu or the industrial might of BYD. Trade barriers and geopolitical tensions play a role, but an equally important, and far more controllable, challenge is the marketing playbook many Chinese brands bring overseas.

Performance vs. brand: Why full funnel matters

When Chinese brands first enter new markets, they tend to focus on performance marketing: lower-funnel efforts that drive short-term sales quickly. That approach gets them into the game, and it feels like progress because the metrics are immediate and measurable. But when you’re talking about building something that lasts and winning the longer-term game, brand is what carries you forward.

This isn’t an argument for brand versus performance — it’s an argument for full-funnel thinking, where every part of the funnel is “performance” because it drives meaningful business outcomes.

Performance marketing plays an important role, especially in the early stages of market entry. But without upper- and mid-funnel investment to build brand equity, performance alone cannot scale sustainably. A full-funnel approach helps ensure that short-term activation contributes to long-term growth — not just immediate conversions.

The real differentiator

As global competition intensifies — and as more brands master performance tactics — the real differentiator becomes brand strength. Advertising that builds trust, emotional connection, cultural relevance and advocacy converts newcomers into loyal customers.

Full-funnel thinking allows brands to connect upper-funnel brand-building with lower-funnel activation, creating a cycle where performance reinforces brand and brand amplifies performance. That’s what positions brands against those that optimize only for short-term monetization.

Data supports this shift. Research from WARC’s Multiplier Effect shows that moving from performance-only to a balanced brand and performance strategy can boost revenue returns by a median of 90%. That’s an incredible figure.

So, when should brands shift their thinking? Honestly, from day one. Even when you’re driving short-term sales with your product and promotions, you should be thinking about how to build long-term engagement and connection with customers once they come in.

The media strategy shift

Beyond the brand-versus-performance question lies another critical decision: where brands choose to show up.

In my experience, many Chinese companies start with performance-focused walled gardens — platforms like Meta and Google — because they offer closed-loop attribution and feel familiar. But this channel-first approach often misses where consumers actually spend their time.

In the U.S., the open internet accounts for roughly 61% of consumer attention. That includes streaming services like Spotify and Netflix, premium news publishers and professionally produced content that genuinely engages audiences.

The right question isn’t “Which channel should I use?” It’s “Where are my consumers, and where can I build real connections with them?”

Over-reliance on walled gardens can also create inefficiencies. When you're spending media dollars across multiple walled gardens, you likely have some audience overlap while missing audiences unique to the open internet. Without cross-channel frequency capping and holistic measurement, you can't optimize efficiently or make your advertising budgets work harder.

What holds brands back

Several misconceptions keep Chinese brands stuck in performance-only mode.

• “Branding only drives awareness.” Not true. Brand and performance work together to drive business outcomes. It shouldn't be either/or.
• “Branding is too expensive.” Branding is an investment — one brands are already making through their product strategy, name and messaging. The question is whether that investment is intentional and strategic.
• “One global strategy works everywhere.” Markets differ. What works in China doesn’t always translate internationally. Brands must land locally, getting the insights right and strategizing properly for each market.

Another misconception: that strong performance alone is enough. It isn’t. If you're overly reliant on short-term ROI, you'll likely plateau. Performance doesn’t replace brand. You can't just put more money there and skip brand investment and expect success.

Investing for sustainable business growth

Last summer, Luckin Coffee opened four U.S. stores in Manhattan, drawing lines wrapped around the block.

But in a market where Starbucks is still dominant and independent cafés thrive, the key question is whether customers will remember it a few years from now — because the brand resonates, not just the promotion.

The brands that figure this out early — the ones willing to invest in what compounds, not just what converts — will be the ones still standing a decade from now.

Performance marketing got Chinese brands into the global game. But only a full-funnel strategy — one that builds brand equity while driving performance — can help keep them there.

The Current is owned and operated by The Trade Desk Inc.