Have Chinese Brands “Arrived” as Predicted?

A truly global “brand” should satisfy the following components:

1. Build international customer loyalty and brand trust by providing consistent product quality and a compelling and clear brand messages;

2. Create a need for the brand among a diverse audience by tailoring marketing to reflect local audiences;

3. Association with a “country brand” known for excellence in the particular product category;

That being said, have Chinese companies developed competitive and truly global brands yet? This article will focus on the company’s brand – and not whether or not the company is large and profitable.

A global brand must be iconic and represent much more than a large company that looks good to investors and reads well on paper.

Case in point: China Mobile may be larger (by number of customers) than Verizon and AT&T combined but does not have the same level of brand recognition globally – yet.

Google, Nike, Wal-Mart, Apple, GE and Coca-Cola are all iconic American brands with global brand recognition.

Louis Vuitton, Chanel, Hermes, Dior…these French brands represent the qualities consumers around the world associate with France and “Brand France”: time-honoured, heritage, oozing class, craftsmanship and rarity.

We buy watches from Switzerland and sophisticated automobiles from Germany; Chocolates from Belgium and finely tailored suits from Italy.

People don’t buy Russian MP3 players or Peruvian Whisky because these countries haven’t established, first, a country brand association with these products or their inherent characteristics and, second, these countries do not have the famous companies to market these products.

You get my meaning.

But what do consumers around the world “associate” with Chinese brands?

“Brand China” is very successful as far as country branding is concerned: the Beijing 2008 Olympics were a great success and the 2010 World Expo Shanghai is a “country branding” opportunity of a lifetime.

Ask any businessman around the world to name the world’s hottest economy right now?

My guess is he will say China. China – nation as a brand - has done much better recently than “Brand USA,” for sure.

Aside from “place branding,” what about trust, quality and targeted marketing by Chinese brands on a truly global level?

Chinese companies have expanded and done well in Africa, Southeast Asia and the Middle East and have even purchased global icons such as Lenovo purchasing the ThinkPad brand (along with the rest of IBM’s computing division).

With all the hype about mainland Chinese companies expanding globally, have Chinese companies actually become truly established and well-reputed brands or are they simply large companies gaining market share because of low cost?

Back in 2005, the New York Times predicted that powerful Chinese brands would emerge on a global scale with the backing of the Chinese Government intent on cultivating its own “famous brands.”

Have they?

My opinion: Chinese brands have grown dramatically and have recently realised their potential as global iconic brands – yet they have not achieved this goal and will need to emphasise consistent quality and a smart branding message targeted to diverse foreign audiences around the world – each with different cultures and different needs.

Many Western companies have failed in China for not adapting their products, marketing or brand image to China: when Marks & Spencer opened in Shanghai, their clothes were in Western sizes and didn’t even fit their target Chinese customers.

Also, their marketing approach was completely wrong as it targeted those in the middle and completely missed the point that most Chinese urbanites are aspirational and don’t seek out mediocrity and brands that place them squarely in the middle class. But for every misstep by one foreign brand in China, another one nails it; KFC, McDonalds and Starbucks have all localised their menus to adapt to local taste preferences.

To build a brand in China as a foreign company, you need to tweak your marketing formula for your target audience.

And one more point about the Chinese target audience: China is not homogenous and tastes can range greatly between a customer in Beijing and a customer in Shenzhen.

Using this line of reasoning, Chinese brands shouldn’t be expected to dominate the “West” in the same way that foreign brands can’t dominate “China.” Chinese brands will also have to apply a market-by-market approach, learn about its diverse customers and market to their tastes.

Most importantly, the company brand will have to convey quality, craftsmanship and build trust with its customers. Japan didn’t start out Lexus – it started by doing small items (transistor radios and digital watches) very well and gradually developed into a brand powerhouse.

For Chinese brands like Haier, China Mobile and Li Ning, the process will take time.

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