Ones to watch
by Siegel Gale
As the Chinese flag is raised for gold several times each day during the Olympics in a neck-to-neck battle with the U.S. for sports world supremacy, I ask myself: How many global Chinese brands can I name in any industry? Being a UK brand professional, it should be easy. Right?
One, Lenovo. Two…um, drinks, clothing, TV, cars? Surely I must know another one. I'm racking my brain and nothing else is coming. Dismal, but true.
Despite China's stratospheric growth and massive success as the world's second-largest economy, and despite producing the goods for the most admired and powerful brands in the world, very few mainland Chinese brand names have yet fully emerged in the global consciousness.
Of course, this doesn't mean that there are no large Chinese-born brands. Actually there are Chinese brands with the consumer following that would make a Coca-Cola drool with envy, but despite being huge in the Chinese market they haven't made it on the world stage.
On one hand, there are the state-owned companies still dominating the Chinese brand landscape, including Bank of China, China Mobile and China Telecom. These brands are not necessarily looking for global consumption and would need a massive adaptation to the global markets.
On the other hand, there are brands ready to, or already taking, the global stage. And they want it badly if we're to believe the 60% annual increase of China’s overseas investment—a staggering £2.7bn ($4.4bn) this year. Interestingly, their journey to global recognition is not straightforward, nor easy, as they are learning vital lessons in marketing along the way. Here are four examples.
1. Li-Ning (aka "China's Nike") failed at first to capture the Western markets and was forced to shut its U.S. shops despite success in China and a massive boost at the Beijing Olympics. Learning fast from its failures, the label refocused the brand on its founder's heritage (former Olympic gymnast Li-Ning) and redirected its sales online. You can see the brand on the Spanish or Argentinian shirts during London 2012.
2. Huawei is the largest telecommunications equipment maker in the world, ahead of Ericsson. The company is already present in 50 countries and has recently started a big thrust in the U.S. smartphone market through savvy partnerships. Its overseas revenue is twice as much as at home.
3. Lenovo, the No. 2 PC distributor built its global expansion right the first time with the smart acquisition of IBM's PC division and the ThinkPad brand. Following a recent slowdown, Lenovo has strengthened its brand story and is single-mindedly targeting the young consumer segment.
4. Haier, China's electronics and white goods giant with a German name, is probably the closest China gets to a known international brand. Advertising cleverly on Facebook overseas (it’s blocked in China) and using its subsidiary and manufacturing facility in the U.S., Haier's "Made in the USA" products blur the Chinese origin while building a new loyal consumer base.
The global future of other major Chinese brands is yet to be seen, but what is sure is that these brands are working hard at it and learning fast. And like young Chinese athletes storming the London Olympics, once they get it they will be unstoppable.
Frederic Boucher is a design director for Siegel+Gale’s London office.