“Made in America” to become a Premium Brand in China?

Tuesday, February 14, 2012 6:28
Posted in category Going to Market

Focused largely on selling men’s garments in China the article “Made in U.S.A” Goods Gaining Traction in China highlights how a number of brands are now beginning to see traction in China because of their “Made in America” labels.

we’ve seen interest sparking in China in American-made heritage brands over the past year. Last month, the Wisconsin-based shoemaker Allen Edmonds — one of the only two American high-end men’s shoemakers still producing domestically (along with Alden), and the choice of presidents and CEOs for decades — announced plans to enter the China market this year while keeping its manufacturing base firmly in the US. One month before that, the denim brand 7 For All Mankind (which produces its products in the US of imported denim) launched in Macau, looking to get a piece of the lucrative premium denim market in the Greater China region.

It is an article that is particularly interesting for me as this is a trend that I have been seeing in other areas of China’s economy as well

Why would “Made in America” attract customers, particularly if they are going to make the purchase at a premium.  Three reasons:

1) Quality -This is core of this article.  Good old American made products that will last (value for money), and in my experience the drivers for this market are largely going to be the Chinese who have spent some time abroad and are willing to spend the premium.

2) Safety – This is the core of my experience, and anyone who follows food scandals will understand the drivers.  It is a market dominated by new families as baby food and products lead the charge, and the volumes are huge.

3) Prestige – This market is perhaps best defined by the luxury market, but at a time was also a driver of the middle market, as firms like BMW and Volkswagen can attest to.  It is not just about having a luxury price tag, but at times can also just be about being able to show that the product was one of the few items not made in China.

It is an interesting trend that I think is worth following, particularly for products in the quality and safety categories, as there are certainly going to be opportunities for firms who are too small to establish a flagship presence in China to find a market in China because their products are “Made in America”.  Yet, it is in these categories, that I expect to see the largest growth markets as the items are (1) more affordable and (2) have a clear value proposition that will drive consumers to pay more for quality.

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One Response to ““Made in America” to become a Premium Brand in China?”

  1. Chris Devonshire-Ellis says:

    February 14th, 2012 at 10:34 pm

    I think that’s always been the case Rich. Look at Starbucks and McDonalds for example – in China they are considered to have some premium value here over and beyond that perceived in the US because they represent – America. As for more upmarket brands, sure. But it’s not just limited to American brands – we all know how much the Chinese covet LV, Gucci and so on. So it’s not a developing trend – its already a fact that “Made In the USA” (and Europe) dictates a premium. – CDE