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China Brands Huawei, Haier, Tsingdao - Good, but Not Exactly Apple, Sub Zero and Budweiser

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China now has the 2nd largest economy in the world, is the fastest growing and most important consumer market in the world, and is accelerating the process of  "Going Global".  In fact "China Going Global" has been a success for almost all involved in the last ten years,  including Chinese companies buying famous foreign companies and properties,  rich Chinese investing in real estate and education abroad,  Chinese tech and b-2-b companies expanding overseas and OEM manufacturers selling in every corner of the globe.

The one glaring empty space is BRANDS.  How is it possible that China, for all of its achievements and growth over the last 20 years, is so completely bereft of  global brands?   To be sure, China has many famous local brands that are household words in China and some of those brands like China Mobile, Alibaba, Sinopec and People's Bank of China are among the biggest companies in the world.

Yet, no matter where I speak, or who I meet with, when I ask  how many Chinese brands the group or person can name I get mostly blank stares and sometimes a smattering of "Lenovo" "Xiaomi" or "Tsingdao."

Why is it that tiny Singapore has one of the BEST known brands in air travel, Singapore Airlines, and Chinese airlines that dwarf them in size, like Air China and China Southern Airlines are almost unheard of outside of China?  The same could be said of Dubai's "Emirates Airlines".

The answer to why Emirates is a globally famous brand and Air China isn't we can look at all the things they do that Chinese consumer product and service companies are still unwilling to do.

  • Invest in the materials, people, and operations that provide a product or service that is equal to or better than competitive products or services in the same category.  i.e. flying Emirates in COACH is better than many airline's business class.
  • Invest in making your name ubiquitous (think Emirates sponsorship of Arsenal football).
  • Invest in the analog and digital marketing and communications necessary to communicate your brand ideals to a global audience.  Branding and marketing are expensive and complicated.  Chinese companies still do not understand the value of this investment, so they don't make it.
  • Have patience and be willing to take risks.  Thirty years as the "factory of the world" has made it hard for many Chinese companies to break out of the "a $1.00 profit today is real, a $20.00 profit in the future is a dream".
  • Build for the future.  Luxury brands are built over  a long time horizon.
  • Be a part of the local culture. Two weeks ago Andy Bird, CEO of Disney International told me "We are not importing Disney to China, we are building the Chinese Disney Corporation."I think that is also great advice for Chinese companies going global.

All this said, it seems there is hope for the future.

A new report on Chinese brands and branding produced by Chicago advertising agency The Monogram Group has my, and many other, China-heads spinning in surprise.  Monogram has a practice dedicated to working with Chinese companies going global and has built US brands for Chinese companies . They conduct a  large amount of research on the subject, including a tracking study of American attitudes about Chinese brands and products they first launched in 2007.

It seems that the attitudes of young consumers in the US view China and Chinese brands in a positive light, even with little exposure to them.  This could/should be a major call to action for Chinese companies to more quickly pursue bringing and creating their brands to the US through acquisition or greenfield strategies.

For their most recent study they surveyed 527 US Millennials (ages 18-33), in part to test their hypothesis that the trends showing this cohort being more open to new brands, especially foreign ones, would be eye opening for China’s next generation of business leaders.

Some of the study's more surprising findings include:

Let’s start with Fact #1:

In asking product purchase preferences based on country of origin, after the US, Germany and Japan came…China. Ahead of France, Mexico and Korea. Think about that for a moment.

Fact #2:

Well over 50% (58%, to be exact) assume they will be buying Chinese branded products within three years. As in, it’s inevitable.

Fact #3:

Today, 28% would purchase from a Chinese brand they recognize, and another 13%

said they would purchase from a Chinese brand they DON’T recognize, for a total of 41%. This is remarkable, considering there are realistically no Chinese brands they recognize today.

Fact #3a:

The above numbers increase as household income increases: the 28% open to purchasing recognized Chinese branded products climbs to 37%, and the overall numbers increase to 51%. So, the more affluent and educated the cohort, the more open they are to purchase. Another important, encouraging trend.

Yet, this is even more remarkable when weighed against another survey finding: 47% said they view Chinese products as “low quality, low price” and not “good value.”

According to Scott Markman, Monogram’s President, “I think the takeaway is it’s  an open playing field for Chinese CEOs – both B2B and B2C. These are the same challenges faced by manufacturers from Japan and Korea in past generations. If the Chinese pursue global best practices in brand building, and all of the organizational requirements that come with it in terms of product quality, marketing and service, there is no reason they can’t be wildly successful.”

So, will the combination of China Going Global with an open-minded attitude among the young spur Chinese companies and brands lead to the emergence of Chinese brands that can compete with those of Europe and America in the next ten years?  Perhaps, but going global and having willing customers will mean nothing is "Brand China" doesn't invest the time, people and money needed for "Brands From China."

My new book "China's Super Consumers: What One Billion Customers Want and How To Sell It To Them" published by Wiley is out now.