Chinese brands in the UK?
Is 2012 the year when Chinese brands will make a real impact in the UK?
The start of a new year is not only a time of resolutions, but also an opportunity to risk potential egg on your face by predicting the latest trends for the year ahead. According to the JWT 100 trends for 2012, this time next year we will all be tweeting by speaking directly into our smart phones, after having taken a break from forth coming Latin American dance craze Batuka. But perhaps one of their more interesting predictions is the rise of the Chinese brands in worldwide markets.
The fact that China has been the fastest growing economy for the last thirty years and is now the second largest in the world, would suggest that you wouldn’t need to be Mystic Meg to see this one coming. However, despite this economic success, awareness of Chinese brands outside of China remains low, so the predication may be bolder than it seems.
Last year there were twelve Chinese brands on Millward Brown’s 100 most valuable brands list, yet eighty per cent of consumers outside China could not name a Chinese brand. This level of global brand awareness hardly seems fitting for the second largest economy in the world, and hardly suggests a global audience that are demanding more Chinese brands. So, as China shifts from the world’s manufacturer to become the world’s consumer as well, can it also become the world’s marketer and brand innovator? Perhaps this could be the year China makes this step.
So what are their challenges? And why hasn’t this happened sooner? Recent research conducted by TNS and HK4A suggests that the term ‘made in China’ successfully communicates value for money but fails to communicate trust and quality. It is argued that this makes Chinese brands potentially successful in emerging markets, but presents significant barriers to penetrating European and American markets, where a stigma of low quality still exists for Chinese products.
This conclusion is supported by the fact that so far the most successful Chinese brands worldwide have decided to deemphasise their Chinese origin. Lenovo has aligned itself with IBM and Haier created Haier America to sell outside of China; both feeling that the ‘made in China’ message won’t help an electronics brand build a relationship of trust and reliability with the consumer.
This trend is continued by recent news of a Chinese brand attempting to break into a product category where trust and safety is certainly a key purchase driver; condoms. Despite outperforming industry leading brands in safety tests the Chinese condom manufacturer Safedom believe that they need a European brand for success outside of China, and are seeking a European partner to build success.
This approach is even being adopted by products where trust and reliability are less important than aesthetics and brand identity. The trainer brand Feiyue was established in Shanghai in the 1920s, with a design particularly suited to martial arts. Popularised by Shaolin monks, the brand achieved a cult status but this interesting brand story has not been utilised to communicate with consumers outside of China. Instead, to grow beyond China the brand has partnered with a French firm to communicate a more fashionable French image to the consumer, shifting away from its traditional Chinese origin.
If, as predicted, Chinese brands are really going to make an impact worldwide this year then they need to start to have the confidence to communicate directly with consumers outside of China about being Chinese. Qualitative research has a key role to play here in uncovering what the essence of being ‘Chinese’ means to consumers in local markets, and what kind of brand values that communicates in terms of country of origin effect.
Li-Ning have begun to do this is in the USA. The sports brand makes no secret of its Chinese origins, but communicates it in a way that fits American values. They tell the story of one man’s passion and drive to succeed, which fits well with the American dream. Even their advertising makes a tongue in cheek reference to American perceptions of the inferior quality of Chinese goods. Li-Ning are managing to communicate directly with American consumers with a perception of ‘made in China’ that is relevant to them.
So far, it seems that no Chinese brand has managed this in the UK. The notion that ‘made in China’ is a universally bad proposition for a brand in the UK feels worthy of challenge. As the nation of China has transformed over the last thirty years, so has its image in the UK. Of course this change hasn’t always been positive, and there are significant negative perceptions of Chinese products that need to be addressed. However, it is a task of qualitative research to test exactly what the perceptions of ‘made in China’ is, and if quality is still an issue, in what way is it an issue?
UK consumers are capable to contextualising positive and negative associations of a country of origin, and the meaning of ‘made in China’ could have a positive meaning in some categories if it communicated in an effective and relevant way. The task is out there for qualitative research to uncover a way for Chinese brands to communicate the message of ‘made in China’ that is relevant to UK consumers, playing on common cultural understandings of modern China.
The opportunity appears to be there for a Chinese brand to break the UK market in 2012. Maybe this time next year we will all be able to see the brand that has managed to do it.