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Domestic brands enjoying a revival
By Pan Xiaoyi |
November 6, 2010, Saturday
|
Print Edition
Print Edition
THE domestic brands that Chinese consumers once loved, then spurned for the glamor of foreign names are enjoying something of a revival in China, attracting a whole new generation of admirers.
Forever bicycles, Warrior sneakers and Shanghai VIVE cosmetics are among the brands riding the wave of nostalgia, giving domestic brand makers a new and perhaps unexpected edge over foreign rivals.
"The old brands have left so many beautiful memories," said Gene Chen, a partner of Adfaith Management Consulting Inc. "To fully take advantage of them means you can get twice the result with half the effort."
"Every time a revival comes along, some brands grasp the opportunity to become true classics, and others just come and go with the ever-changing tide of fashion," he added.
Before Nike or Adidas moved into the Chinese market in the 1990s, white Warrior sneakers were the in-thing to wear. Then the foreign names, with their aura of glitz, walked in, and Warriors began to look like a tired old brand to consumers anxious to sport the latest fashion. Warriors became the shoes of the elderly and rural villagers.
It's a story repeated over and over again as China opened up its markets to the world. Domestic brands, no matter how sturdy, reliable and inexpensive, found themselves deemed to be shoddy merchandise. And so it was good-bye to Phoenix bicycles, Seagull watches and Kai-kai shirts.
"It is regretful that these brands just died out as the opening-up policy swept across so fast in the 1990s," said Ge Wenyao, chairman of cosmetics and personal-care products group Shanghai Jahwa United Co. "The state-owned companies behind the old brands had grown up in a centrally planned economy, and they weren't able to adapt themselves quickly to changing times."
At the same time, Ge noted, foreign companies were getting preferential treatment to invest in China.
But times have changed a lot in the new century. Domestic brands have learned a thing or two by observing how foreign competitors operated, how they relied on always changing new lines of products and how they marketed their products.
The guys at the bottom of the supply chain not only looked up but also began moving up.
The wave of new interest in venerable old brand names has even spawned many groups in the popular online community Douban.
"We did not establish the group for nostalgia only," a group on Douban advises on its billboard.
"We want to save and promote the classic Chinese brands. You may not know just how wonderful and excellent they used to be."
The group posts latest information about refreshed old brands and offers a communication platform for people who love these brands. Sometimes, group buying activities will be organized.
On the first day that Shanghai Warrior Shoes Co opened its flagship retail store on the site of its old factory, customers queued by the hundreds outside in a scene reminiscent of Apple fans working up a frenzy when new models hit the shops.
Gui Chengang, executive director of 83-year-old Warrior, said the company plans to open between 50 and 100 outlets in Shanghai within three years.
Warrior is targeting annual sales of 200 million yuan (US$29 million) this year and 500 million yuan in three years.
The estimates might be conservative because the company hadn't expected such an outpouring of consumer interest. Within a week of the new store's opening, the shoe shelves were half-empty, and the company ran out of stock.
"I love Warrior," said 19-year-old student Li Yi, "The white basketball sneaker reminds me of a happy childhood when I was five years old."
Other consumers aren't quite so swayed yet.
"These designs are so not cool," said Meng Xi, a 27-year-old office worker. "Neither is the store layout. These old companies still have a lot to learn from foreign counterparts."
Industry watchers agreed that companies trying to relaunch old brands will have to do their homework if they want to be successful.
"Creativity is usually not enough. They have to have a sustaining aura to flourish," said Shi Lihua, general manager at Lao Feng Xiang Co, a jewelry manufacturer established in 1848.
Adfaith's Chen said the management of older brand companies need to re-invent their product lines, polish their images and modernize their marketing techniques to keep up with the times.
"Product updates and refreshed brand images are important to a revival," Chen said.
Jahwa, a state-owned enterprise, is now in the process of upgrading its Shanghai VIVE brand, once the hallmark of the glamorous 1930s. It relaunched its product line recently in the elegant surroundings of the newly refurbished Peace Hotel on the Bund.
Jahwa invited a young team, led by Jiang Yobo, to redesign the brand to create a vibrant and classy image. This was reinforced with a marketing campaign to match the rebirth of the brand.
Jahwa's Ge said VIVE will have at least five outlets in Shanghai by the end of this year and the firm plans more than 20 stores over the next two to three years. VIVE's product range includes cosmetics, jewelry and accessories, with prices ranging from 300 yuan to more than 1,500 yuan. The pricing of the products place them in direct competition with those offered by Estee Launder and Dior.
It's not only the domestic market that old brand companies are seeking to tap. Warrior sneakers are now selling in Europe for 50 euros (US$70) a pair, on par with prices for Nike and Adidas footwear.
The upgraded Forever C bicycle series - the "C" stands for classic, chic, clean and China - is also being sold at much higher prices, too.
"Only brands with long histories can be considered classic and command higher prices," Chen said.
Forever bicycles, Warrior sneakers and Shanghai VIVE cosmetics are among the brands riding the wave of nostalgia, giving domestic brand makers a new and perhaps unexpected edge over foreign rivals.
"The old brands have left so many beautiful memories," said Gene Chen, a partner of Adfaith Management Consulting Inc. "To fully take advantage of them means you can get twice the result with half the effort."
"Every time a revival comes along, some brands grasp the opportunity to become true classics, and others just come and go with the ever-changing tide of fashion," he added.
Before Nike or Adidas moved into the Chinese market in the 1990s, white Warrior sneakers were the in-thing to wear. Then the foreign names, with their aura of glitz, walked in, and Warriors began to look like a tired old brand to consumers anxious to sport the latest fashion. Warriors became the shoes of the elderly and rural villagers.
It's a story repeated over and over again as China opened up its markets to the world. Domestic brands, no matter how sturdy, reliable and inexpensive, found themselves deemed to be shoddy merchandise. And so it was good-bye to Phoenix bicycles, Seagull watches and Kai-kai shirts.
"It is regretful that these brands just died out as the opening-up policy swept across so fast in the 1990s," said Ge Wenyao, chairman of cosmetics and personal-care products group Shanghai Jahwa United Co. "The state-owned companies behind the old brands had grown up in a centrally planned economy, and they weren't able to adapt themselves quickly to changing times."
At the same time, Ge noted, foreign companies were getting preferential treatment to invest in China.
But times have changed a lot in the new century. Domestic brands have learned a thing or two by observing how foreign competitors operated, how they relied on always changing new lines of products and how they marketed their products.
The guys at the bottom of the supply chain not only looked up but also began moving up.
The wave of new interest in venerable old brand names has even spawned many groups in the popular online community Douban.
"We did not establish the group for nostalgia only," a group on Douban advises on its billboard.
"We want to save and promote the classic Chinese brands. You may not know just how wonderful and excellent they used to be."
The group posts latest information about refreshed old brands and offers a communication platform for people who love these brands. Sometimes, group buying activities will be organized.
On the first day that Shanghai Warrior Shoes Co opened its flagship retail store on the site of its old factory, customers queued by the hundreds outside in a scene reminiscent of Apple fans working up a frenzy when new models hit the shops.
Gui Chengang, executive director of 83-year-old Warrior, said the company plans to open between 50 and 100 outlets in Shanghai within three years.
Warrior is targeting annual sales of 200 million yuan (US$29 million) this year and 500 million yuan in three years.
The estimates might be conservative because the company hadn't expected such an outpouring of consumer interest. Within a week of the new store's opening, the shoe shelves were half-empty, and the company ran out of stock.
"I love Warrior," said 19-year-old student Li Yi, "The white basketball sneaker reminds me of a happy childhood when I was five years old."
Other consumers aren't quite so swayed yet.
"These designs are so not cool," said Meng Xi, a 27-year-old office worker. "Neither is the store layout. These old companies still have a lot to learn from foreign counterparts."
Industry watchers agreed that companies trying to relaunch old brands will have to do their homework if they want to be successful.
"Creativity is usually not enough. They have to have a sustaining aura to flourish," said Shi Lihua, general manager at Lao Feng Xiang Co, a jewelry manufacturer established in 1848.
Adfaith's Chen said the management of older brand companies need to re-invent their product lines, polish their images and modernize their marketing techniques to keep up with the times.
"Product updates and refreshed brand images are important to a revival," Chen said.
Jahwa, a state-owned enterprise, is now in the process of upgrading its Shanghai VIVE brand, once the hallmark of the glamorous 1930s. It relaunched its product line recently in the elegant surroundings of the newly refurbished Peace Hotel on the Bund.
Jahwa invited a young team, led by Jiang Yobo, to redesign the brand to create a vibrant and classy image. This was reinforced with a marketing campaign to match the rebirth of the brand.
Jahwa's Ge said VIVE will have at least five outlets in Shanghai by the end of this year and the firm plans more than 20 stores over the next two to three years. VIVE's product range includes cosmetics, jewelry and accessories, with prices ranging from 300 yuan to more than 1,500 yuan. The pricing of the products place them in direct competition with those offered by Estee Launder and Dior.
It's not only the domestic market that old brand companies are seeking to tap. Warrior sneakers are now selling in Europe for 50 euros (US$70) a pair, on par with prices for Nike and Adidas footwear.
The upgraded Forever C bicycle series - the "C" stands for classic, chic, clean and China - is also being sold at much higher prices, too.
"Only brands with long histories can be considered classic and command higher prices," Chen said.
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