Overseas appeal within reach of Chinese brands

Source:Global Times Published: 2013-5-8 22:48:01

No longer just the world's top choice for cheap manufacturing, China is now seeking to both export products priced at premiums over other nation's manufactured goods and to build international brands that can dominate the global stage. Yet, decades of mass-produced and low-quality products from the country have left a scar on consumer perceptions.

According to a survey conducted in the US and the UK by J. Walter Thompson (JWT), Chinese businesses have made a disappointing impression in Western markets. Fewer than one-fifth of respondents associated positive traits like quality and reliability with Chinese products, while over half said "Made in China" goods are mass-produced and cheap.

Adding insult to injury, Chinese-made goods have also been subjected to a slew of questions concerning safety in recent years. The country's milk products, for instance, are now viewed with skepticism and uncertainty both at home and abroad thanks to a series of scandals involving local dairy companies.

Moreover, reports about the abundance and easy availability of fakes within China have also left many consumers in developed markets with the impression that most Chinese goods are knock-offs that lack style or creativity. In addition, perceptions of Chinese products have also been deteriorated by news about the nation's problems with pollution and poor labor conditions.

The JWT survey also found relatively low awareness of Chinese brands among consumers, most of whom simply projected their negative sentiments toward Chinese goods onto Chinese labels.

Yet, the situation may well change in the future. Japan, South Korea and Germany, among others, have all overcome hostile and skeptical consumer perceptions. There is no reason that China cannot do the same.

In the meantime, here are several things Chinese companies intent on creating global brands should know, remember and do to catch up with their overseas counterparts.

First of all, innovative design and creativity are the main drivers behind successful brand building. As we all know, the iPhone was designed by Apple in California but assembled in China. Yet, what's center-stage in the minds of customers isn't where the product is manufactured - what's far more important is their faith in the brand that created and designed it.

Second, the reputation of almost all international brands is so strong that people invariably ignore its country of manufacture. Actually, most customers are convinced that their favorite brands control every step of the production process. When L'Oreal or L'Occitane opens a factory in China or Japan, no one who buys their products asks where they were manufactured. When Audi, BMW or Mercedes-Benz manufactures cars in China for sale domestically or overseas, does any one express skepticism? No, because they trust the brand.

If more Chinese companies show they are capable of consistently producing top-notch, innovative products, local brands will have a much easier time winning a spot in the global consumer market.

The article is based on speeches made by Eric Lee, managing director of JWT (Shanghai), and Michel Gutsatz, director of MBA and DBA at Euromed Management, at the CEIBS 5th Prestige Brands Forum 2013. bizopinion@globaltimes.com.cn



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