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Shanghai FTZ still lacks a clear-cut identity
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IN brand-obsessed China, it seems that even something as abstract and esoteric as a free trade zone (FTZ) can become a mingpai, or famous brand. That’s my quick assessment, on reading that our city’s highly hyped FTZ is getting ready to embark on a nationwide campaign to spread its business model as it approaches its first anniversary.
Of course I’m being just a little facetious by saying our FTZ is trying to develop a real brand, since the focus is clearly on creating an economic development area. But the amount of media coverage and publicity around the zone is almost the same as creating a brand, and the “FTZ” moniker has taken on an almost brand-like feel in the short time since the launch of this experimental new area in Pudong.
As a China resident for many years, I’ve noted this fascination has a long history in modern China dating back to well before the current reform era. But this latest move to create a “brand” around the new FTZ seems a bit extreme, and perhaps indicates it’s time for China to tone down its obsession.
Our beloved FTZ has certainly developed a name for itself over the last eight months. The zone, officially known by the unruly name of China (Shanghai) Pilot Free Trade Zone, has been in national and especially local headlines ad nauseam since its launch just before the October 1 National Day holiday last year.
I haven’t seen any official tallies, but I suspect a search on zimaoqu, the Chinese term for FTZ, would turn up thousands of headlines and other references in local media alone in the last eight months.
Yet I’d be curious to get a media expert’s opinion on how successful the FTZ has been at developing an image over that same period. My guess is that such an expert would say the FTZ has been hugely successful at raising awareness of its name, but that there’s still quite a bit of confusion about what exactly it means among business leaders and the general public.
That could be problematic for our beloved FTZ if it’s really serious about trying to spread its model across the country.
According to one of the zone’s top officials, the FTZ will soon name an initial batch of other institutions around the country that will seek to replicate its model aimed at testing out reforms of China’s financial system.
I won’t go into much detail about the campaign here, since much of it looks quite technical and boring to average readers. In effect, FTZ managers want to turn their concept into a sort of franchising program, similar to what McDonalds does for most of its restaurants in the US.
That model has a central organization develop basic business models and guidelines, which other operators can then follow to open their own outlets under the same brand name.
Such a strategy is good not only operationally, but also provides a consistent image of the brand in consumers’ minds. In this case such consumers would be the businesses that operate in this new generation of zones.
No one fully understands it
The big problem is that no one seems quite sure of what exactly the FTZ brand stands for, besides the broader concept of financial reforms.
One of my good friends recently registered a company in the zone, but openly admitted he had no concrete business development strategy about what he could actually do there. Instead, he said he was taking the action on the hopes that the zone would eventually offer lower import taxes for luxury goods.
If I were one of the zone’s operators and really wanted to follow this franchise-like strategy, I would seriously consider hiring a branding consultant to manage the process more effectively.
For starters, such a consultant would probably suggest abandoning the zone’s current unwieldy name and adopting something more user-friendly. The term “FTZ” is slightly better than “China (Shanghai) Pilot Free Trade Zone,” but neither name really seems to conjure up images of economic prosperity and business friendliness, two of the zone’s core values.
But in all honesty, I would advise the zone’s managers to focus less on image building and national expansion, and set their sights on finalizing policies about what exactly the FTZ will be and pay more attention to creating a well-designed product that will truly help to advance the country’s financial reform.
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