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Toh Han Shih

Mainland producers must invest in marketing, say experts

Chinese brands have a long way to go before they become world class,  say industry players and consultants.

It would take five to 10 years before Chinese brands became truly global, said Frank Chen Fuguo,  China managing director of Interbrand, an international brand consultancy.

'Although Chinese products are selling abroad, often they do so under other brands. Selling Chinese brands abroad is at the beginning stage.  Japanese and Korean firms needed five to 10 years to build up their brands. Chinese companies need just as long a time.'

Brand building was a conceptual exercise involving image and perception, and a global brand needed a strong international sales network and skilful market positioning and pricing, said Mr Chen. Mainland firms lacked experience in these areas, he said.

'The biggest obstacle is Chinese manufacturers' lack of vital marketing skills,' said a report by the consultancy McKinsey.

Even young people did not perceive many mainland brands as being world class and generally preferred foreign brands, said Joseph Wang Shao-jie,  Ogilvy & Mather group managing director for Hong Kong and southern China.

'Chinese youth does not consider Chinese products inferior, but many foreign brands have the X-factor that many Chinese brands lack. Many Chinese products are world class, but I don't think many Chinese brands are world class.'

Although mainland-made products are considered to be of acceptable quality by Chinese consumers, they are perceived to be imitations of international brands. As such, they were seen to lack originality in technology and design, Mr Wang said.

'Chinese manufacturers do not invest enough in research and development. Another difficulty is many Chinese manufacturers don't understand what building a global brand entails,' he said. 'A global brand has to be built on core values and money has to be invested to market it.'

This was the feedback from interviews with 20 young people in Guangzhou, in a study commissioned by Ogilvy & Mather  and conducted by Synovate, a research firm. The 20 respondents were among 202 people - aged from 15 to 28 - who were surveyed in a street poll in Guangzhou.

Those questioned - in both the smaller group and the larger street sample - preferred Bossini, a Hong Kong brand of jeans, to its mainland counterpart Zhen Wei Si. In footwear, Nike came out ahead over its Chinese counterpart Li Ning.

'When choosing a brand to impress people, international brands have more cachet,' said Mr Wang.

However, young Chinese are willing to buy mainland brands if they are world class, according to the respondents. McKinsey suggested two approaches for brand building.  The gradual way is to sell Chinese products at a discount overseas through independent distributors. Alternatively, a Chinese firm could buy an international brand and move production to China to save on costs.



Chinese brands lack consumer appeal