New era in Chinese brand-building

New era in Chinese brand-building

Chinese merchandise is often associated with cheapness and low prestige, however many local companies succeeded in making a name for themselves lately. Diligence and up-to-date technologies are the key factors of this Oriental success story.

Chinese production is constantly growing to serve local and international needs, thus the necessity for quality brands is increasing along with it. Chinese consumers are getting richer, their purchasing power and expectation of value for money grow day after day. As the economy rebalances from production to consumption, and the market becomes ever more competitive, companies tend to invest more into brand-building projects.
The higher amounts they regroup to development and execution of marketing strategies, the less difference consumers will see between Chinese and multinational brands that operate in China.

The MADE IN CHINA preconception
However, a gap between how consumers perceive Chinese brands and how they view successful global brands still exists. The worldwide tendency is to buy items produced in China but branded in the West, since most consumers regard Chinese trademarks as representatives of low-price, low-quality goods that quickly wear out. Only 32% of overseas consumers say they have faith in products that were “Made in China.”
Those, who want to compete with their multinational rivals, need to understand the differences and reduce them with marketing that communicates messages about quality and builds trust.

Surprisingly big names
Although the revenue that Chinese brands gain from overseas has increased significantly over the past five years, Western consumers’ awareness of and familiarity with them remains relatively low. Millward Brown’s “Going Global” study finds that only 23% can name at least one Chinese brand – an increase of just 3% since 2012.
There are though several products favored by Western buyers, whose Chinese origin is not evident for all.
It is worthy to highlight two leading brands that have successfully established themselves in overseas markets, namely Lenovo and ZTE. Both derived over half of their revenue from outside China in 2014. The third telecom equipment giant, Huawei Technologies Co Ltd posted a net year-on-year profit increase of 34% in 2013, thanks to strong domestic demand for hastier mobile network tools and a rising status as one of the world’s major smartphone vendors.
The world’s largest home appliance maker is by market claims likewise Chinese; Haier shows off modularized smart TV with personalized functions. Most of Chinese home appliance manufacturers are introducing smarter interactive products, as the Internet forces many industries to upgrade themselves and satisfy the need for user-friendly interfaces.
The success of these brands serve as an example to other producers, demonstrating that it is possible to understand consumers’ needs and desires and meet them by utilizing decades of production experience, thus creating quality, value-added items under Chinese trademark names.

Digital answers
Online retailer Alibaba, which has recently emerged on to the global stage, grabbed the world’s attention with its record-breaking $25 billion IPO. It entered the BrandZ Top 100 Most Valuable Chinese Brands of 2015 as the second best, with a brand worth of $59.7 billion – a value that took Amazon a decade to achieve – and already derives 12% of its revenue from international markets.
The ability to rapidly digitize products, services, communication and distribution is something that Alibaba – and many other Chinese brands – have in their favor, sometimes even ahead of advancing brands in developed markets. Since China’s economy expanded so fast, many companies could digitize in one step skipping the adaption phase of earlier analog technology.
An effective distinguishing technique for Chinese brands that wish to grow global is to show they are implicitly different from the competition. Alibaba scores highly on the BrandZ brand equity measures thanks to its extremely user-friendly interface for both sellers and consumers. All Chinese brands must find relevant and appealing points of differentiation, which can be achieved by presenting a striking story that plays on China’s unique cultural and social identity and a rapid adaptation of latest technological innovations.

Sources:
www.forbes.com
www.chinadaily.com

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