Youtube: China Brands

Thursday, March 13, 2008 18:58
Posted in category Uncategorized
7 Comments

Here is a quick rundown of what some believe is the next phase of China’s development.Global Brands.

Of course, firms like Tsing Tao, Haier, TCL, SVA, and Lenovo have made it out, but the tsunami of Chinese brands have yet to hit the US shores

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so, the questions i have are:

1) Why haven’t we seen more Chinese brands enter the U.S.?

2) What are the categories that hold the most potential?

3) Which companies have the greatest potential?

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7 Responses to “Youtube: China Brands”

  1. Charles Frith says:

    March 14th, 2008 at 12:35 am

    There is only one Chinese global brand. Its called Lenovo and it’s arguable that it achieved this status by buying the IBM computers division and more importantly the Thinkpad sub brand (Some argue it was a good sale considering Moore’s law and the diminishing profits in hardware). A global brand is one where between 15 – 20% of global respondents can recognise the brand. That doesn’t even apply to the two likely runner ups Haier and Tsing Tao.

    Now if Tsing Tao had any marketing Cojones they would use the Olympics to launch the brand globally but instead they are embroiled like all Chinese brands in the myopic notion that the Olympics are all about China. It’s not. Its an international event and more international people will be in Beijing for August then have ever descended on China in its history.

    A good time to launch a global brand? Yes, but as we have seen with all advertising campaigns for the Olympics they only feature Chinese athletes. Not the most global way to launch Brand China but, and here I get to the root of your question; China is still maturing in its marketing expertise. Its fair to say that brilliant marketing professionals the West set the bench mark as doing something different. Here in China without exception the rule is to do something that resembles there competitor – Nail that sticks out and so on. (It gets noticed if anyone is still reading)

    There will be no global Chinese brands that achieve dominance through the messaging communications model until a Chinese brand takes leadership and insists that it act differently and with a vision of its own brand DNA. Sadly most Chinese enterprises start and end with the spreadsheet and are thus doomed to global marketing mediocrity.

    The other end of this equation is that the product quality and innovation is crucial to brand leadership. But this issue is one where “all roads lead to China” has way more expertise in assessing than my own.

  2. Rich says:

    March 14th, 2008 at 2:36 am

    Charles,

    thanks for your response. A lot of good material there.

    A couple of follow ups to that:
    1) Does a global brand need to be a consumer product? Could XCMG (Like Caterpillar) leverage its growing position in the Southern Hemisphere to move North?

    2) What about the service sector? Is there a potential for Bank of China or PingAn to surpass HSBC or Citibank… or at a minimum, develop a similiar platform?

    Thanks again for the comment. Have a good weekend.
    Rich

  3. Rich says:

    March 16th, 2008 at 1:31 am

    Just found a report on USC’s China site entitled Making a Name for Themselves that is very interesting.

    Chinese companies in particular are trending toward great “localization” to develop their brands, Lin said. Those looking to develop their brands in the U.S. find some sort of foothold in America, through purchasing local brands to better position the company, partnering with established retailers or setting up plants and factories stateside to produce their goods.

    Nanjing Automobile Corporation, for instance, purchased the MG Rover company, a British brand, in hopes of eventually marketing the cars in the United States. Furthermore, they have announced the creation of an assembly plant in Ardmore, Oklahoma, so many of the vehicles will be able to be marketed as “Made in the USA,” while still being sold under Chinese brands.

  4. Charles Frith says:

    March 18th, 2008 at 6:42 am

    Hi Rich,

    Yes indeed. Service sector and B2B can both be brands and I think your suggestion of Bank of China is prescient. They could easily be a global brand in terms of awareness in the next few years.

    As for the point on localization I think like ‘think global, act local’ its often an oxymoron. Regarding provenance I have read that customers are beginning to question the whole made in x country gig as a bit misleading. Particularly in the luxury end of the market.

    Great brand communications should be first and foremost interesting. The marketing machine has crushed this out of most brands through endless testing. Ergo lifeless brands everywhere!

  5. Rich says:

    March 19th, 2008 at 9:17 am

    Charles,

    Jsut found this article that I think is pretty timely. China Firms Sink Roots Across the Globe

    The Chinese corporate presence is still small overseas, but it’s growing fast:

    _ Chinese companies invested more than $30 billion in foreign firms from 1996 to 2005, nearly one-third in 2004-05 alone, according to an analysis by Usha Haley, a professor of international business at the University of New Haven. Computer maker Lenovo Group helped launch the frenzy in December 2004 by announcing it would acquire IBM Corp.’s personal computer unit for $1.75 billion.

    _ In the United States and Canada, Chinese firms now have about 3,500 investment projects, compared to 1,500 five years ago, according to an estimate by Maryville University professor Ping Deng. Large state-owned companies jumped ahead; medium and small private firms are catching up.

    Total investment in the U.S. is between $4 billion and $7 billion, Ping estimates. In Europe, Chinese acquisitions last year alone totaled $563.3 million, according to research company Dealogic.

    _ Last year, 29 Chinese firms debuted on U.S. stock exchanges, just two shy of the total for the previous three years combined, according to the Bank of New York Mellon Corp.

    _ The number of U.S. visas issued to Chinese executives and managers who transfer to U.S. posts within their companies nearly doubled to 2,043 between fiscal years 2004 and 2007. The current fiscal year is on pace to top that, U.S. State Department statistics show.

  6. Charles Frith says:

    March 21st, 2008 at 1:36 am

    Hi Rich. There’s no doubt that China is set to be numero uno. I just don’t think that while it relies upon numbers to punch its weight compared to say qualitative dimensions (which great brands bring to life) that China is going to reap the rewards of some of the story that is behind the hard work.

    China’s dependence on the numbers is almost absolute. Now numbers have a beauty of their own, but as the demographic figures show, by 2025 China is in for the fastest and largest aging population in the history of the world. Those are numbers worth thinking about too.

    We’ve all looked at the miracle of the U.S. as an empire that is possibly in its last days but I can’t help thinking that China may well be the fastest empire ever.

    Great blog in any case.

  7. Rich says:

    April 7th, 2008 at 1:15 am

    Here is an article I think should be noted on zoomlion. China’s Zoomlion Heavy Industry to bid for Italian construction machinery firm

    why this is important, is that Italy is pretty well known for their capabilities in the area of construction machinery, and as I mentioned during the time when Carlyle was looking to take XMCG, the Construction equipment industry is one that I see as one of China’s first real global players

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