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October 23, 2018

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Home » Opinion » Chinese Views

Culture is next frontier in building Chinese brands

By Ni Tao | 00:01 UTC+8 October 23, 2018 | Print Edition

BRANDS like Huawei or Xiaomi are now globally recognized, but the rise of “Made in China” is just not manifest in the ranking of brands.

The Best Global Brands 2018, a survey of brand power by leading consultancy Interbrand, named Huawei as the world’s 68th most valuable brand. Alas, Huawei was the only Chinese brand to make the top 100.

“In terms of business influence, China’s performance isn’t commensurate with the scale of the economy,” said Fan Xiucheng, professor of marketing at Fudan University’s school of management during an October 20 symposium at East China Normal University, co-sponsored by the school’s institute for national branding strategy.

Brand-building is now high on the agenda of any Chinese firm with global ambitions. In Fan’s opinion, Chinese brands are out-shone by competitors due in part to the negative connotations associated with “Made in China.”

“For a long time, ‘Made in China’ was not a plus, but sadly, a burden,” he said. Compared to “Made in Japan” and “Made in Switzerland,” “Made in China” still does little to endear products and services to consumers.

Fan’s pessimism is shared by many, but Jan-Benedict Steenkamp, professor of marketing at University of North Carolina Kenan-Flagler, takes a positive view of the long way Chinese brands have come.

A big difference he has noticed is that five years ago, Huawei stood for good value for money but little else. Improved quality and functionality, along with high standards of design and technology, now allow Huawei to compete with Samsung and Apple.

The other significant contributor to the company’s success is advertising.

According to Steenkamp, co-author of “Brand Breakout,” spending on advertising and celebrity endorsements demonstrated a clear strategy to build the brand. Asked to what extent Chinese brands have overcome the negative stereotypes of “Made in China,” the Dutchman pondered for a while, before saying the answer varied from brand to brand.

Some brands, like PC manufacturer Lenovo, and smartphone makers Vivo and Oppo, are not very strongly grounded in Chinese culture. Their names don’t sound Chinese, nor do they ever communicate explicitly about their Chinese heritage. This could be a good way of hiding — but not necessarily lying about — the “country of origin” label that sometimes holds brands back.

Carlos Torelli concurrs. The University of Illinois professor of marketing acknowledges the benefit of “hiding who you are.”

Lenovo’s acquisition of Motorola to access the mobile market and Haier’s purchase of GE’s home appliance operations are good examples of how to build buzz around brands that resonates in the foreign market without potentially negative cultural links. “So don’t say you are Chinese,” Torelli noted. “Don’t lie, but don’t emphasize it either.”

Double-edged sword

Indeed, culture is a double-edged sword that cuts both ways. Put to good use, it gives a brand an aura that no gimmickry can create.

That’s where real cultural advantages have to kick in. As Steenkamp sees it, tea and silk could be a good start. Much of the world knows tea and silk originated in China, but Steenkamp said he can hardly find Chinese tea in the US clearly marketed as such. “Strangely enough, you are not fully using this heritage,” he observed, “but it could be a great opportunity to leverage Chinese resources.”

While Shanghai is sometimes advised to model itself after fashion capitals like Paris and New York, southern China’s Shenzhen, home to a handful of big tech firms and where the bulk of China’s high-tech products are made for the overseas market, has an image which is simply unique. Some companies there have achieved unicorn status, like DJI, the drone manufacturer that is now rumored to have a 70-80 percent market share in the United States.

As more tech from China reaches foreign soil, the perception of China will become more positive among younger people than older, said Steenkamp.

In a message that will surely hit home in a city promoting four brands —“Shanghai service,” “Shanghai manufacturing,” “Shanghai shopping” and “Shanghai culture” — Steenkamp argued that Shanghai’s cosmopolitan image in the minds of foreigners makes the city an ideal home to lifestyle brands.

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