Chinese vs US brands: Who will have the last laugh?
Published: Jun 23, 2021 05:26 PM
Illustration: Liu Rui/GT

Illustration: Liu Rui/GT

According to a recent global ranking by Kantar's BrandZ, Amazon, Apple, Google and Microsoft are the world's most valuable brands, followed by China's tech giants Tencent and Alibaba.

As a response to the ranking, "Chinese brands are rising up the leaders list and are more valuable than Europe's top brands," Reuters reported. 

Why have Chinese brands grown so fast?

Judging by the ranking, the US still takes the lead. But these brands are not supported by a manufacturing sector that is large in scale with multiple layers.

US brands thrive in a virtual economy. So do European brands. Chinese brands, on the other hand, develop in both virtual and real economies. Even in virtual economies alone, China plays as well as the US and Europe. It even goes ahead of them in some fields.

How many of products sold by Amazon are actually made in the US? How many of the industries related to these products can thrive under President Joe Biden's plan to boost manufacturing?

China-based sellers represented 75 percent of new sellers on Amazon in January. This is a significant increase from 47 percent in the previous year, according to a report by Marketplace Pulse in January. Three-quarters of new sellers in the top four core Amazon markets - the US, the UK, Germany and Japan - are based in China.

Five global brands have more than doubled in value in the past year, according to Kantar's BrandZ survey. Apart from Tesla in the US, the other four are all Chinese companies: e-commerce giants Pinduoduo, Meituan, Moutai and TikTok. These four companies are intimately connected with the daily lives of 1.4 billion Chinese people.

In China, a kind of happiness can be realized through online shopping. Online shopping can meet almost all the manifold needs of the ordinary people, and also greatly stimulate people's desire to consume.

A few days ago, I bought five shirts through Vipshop, a Chinese online discount retailer. As a matter of fact, I needed only three but wanted to select from more options. The five shirts are from the brand Romon Group, one of the largest in China's clothing industry. The original price for each piece was 549 yuan ($85), but the price for online shopping was 110 yuan.

They were soon delivered. It only took three and a half days from making the order to receiving the package. I selected three of them, and then sent a message to the courier. The deliveryman picked up the other two shirts later that day. Half an hour later, the payment for the two shirts was returned to my account. I had an easy and happy online shopping.

This is a complete chain, including brand design, manufacturing, advertising, influencer marketing, online trading, delivery and other closely connected steps. 

Another difference between Chinese e-commerce and that of the US is that the former has inspired the rise of Chinese manufacturing industry in value chain. It has made itself an important part of "Made in China" and formed a new type of Chinese-style consumption.

This is the current situation of manufacturing and consuming in China. Only through personal experience in this chain can people feel the resilience and potential of China's manufacturing industry.

Over the years, some experts have tended to say that there is a big gap between China and the US, Germany, Japan, in terms of high-end products and technologies. That's true. And we do not deny the existence of the gap, but speaking too much on this may easily mislead the public and ignore the advantages of China's manufacturing.

People's life, no matter how high-end it is, is inseparable from daily consumer goods. Advanced technology will only develop when it is combined with products. When the creative design, logistics and payment systems of these necessities are linked together, they deliver not just products that are exactly what consumers want, but they also give incentives to create a larger consumer market.

This is China's advantage. 

Can Americans decouple with such industrial and supply chain? Will the US middle class no longer want to live a happy life with good quality products at affordable prices?

The author is a senior editor with People's Daily, and currently a senior fellow with the Chongyang Institute for Financial Studies at Renmin University of China. dinggang@globaltimes.com.cn. Follow him on Twitter @dinggangchina