By Miaomiao HUANG
As the heat of Black Friday and Cyber Monday revive retailing from the lackluster sales in the US consuming market, American Asians are consistently contributing their every effort to save the plummet of the American Brands by accounting for almost half of the queue outside malls and outlets.
Evidently not much surprising remains in how the Chinese Consumer change the world since the French Luxury Brand Hermès endorsed a Chinese designer to create a Chinese version of “Hermès” – “SHANG XIA” which philosophically means inheriting the family legacy and tradition. The marketer mavens like Patrick Thomas – CEO of Hermès are equipping themselves for the branding battle in the coming Chinese market. This European case which combines the French branding expertise of “savoir-faire” and “savoir-être” in luxury industry and Chinese element brand inspiration does not reside solo as the World’s second cosmetics giant – the American Lauder Group known as the maker of popular brands like Estée Lauder, Clinique and Bobbi Brown launched their hybrid East-Meets-West beauty line “Osiao”, quoting New York Times “In short, the hybrid brand is a modern mash-up of traditional Chinese medicine and the American science of marketing.”
Another curious case has to be how the Kentucky Fried Chicken and Pizza Hut’s mother company YUM! successfully introduced a Chinese cuisine fast-food chain restaurants “East Dawning” since 2004, now feeding Chinese people in its 30 restaurants under the KFC business model in China. All these cases above are signs for Chinese local Market players to wake up and fight back reluctantly or otherwise for this is doomed to be a brutal branding journey for China’s local brands.
Let’s track back the branding history in FMCG in the Chinese Market for a while. Since the open-up, all the national brands are passively defending from the fierce attacks from the foreign international ones. Over time, those are either forced out the market lacking of the necessary survival competitiveness, or bought out by the international groups like L’OREAL acquired Xiao Hu Shi to expand its mass-distribution in local market and YU SAI, the first threshold known Chinese high-end beauty brand, and Johnson & Johnson took over another national brand DABAO Skincare. However, back to the time when the majority of the national brands were failing, the foreign-brands-savvy Chinese were just so unemotionally careless about it.
A bird view on the Asian economical development, China’s pathway is just another déjà-vu, Japan, Korea, Taiwan and Singapore have all been there and done that or still struggle to build its own national international brand. After over a decade’s prosperity of the “World Factory”, China is having its “growing pain” extremely severe, in the recently news from Hong Kong based Phoenix Media Group, a Chinese economist reveals that the manufacturing factories are stuck in this dilemma of either losing money by halting production indefinitely or continuing producing with a definite loss. When the stake is at the worth of 4%-of-the-GDP, China’s policy makers are getting increasing anxiety from the industry transformation as they were worrying about creating Chinese Brands decades ago. For better or for worse, there is a no-alternative stage for China to go through in the later period of WTO contract.
So the jungle survival rules for Chinese brands? They got the sophisticated western brands like P&G and Apple mastering the expertise of a successful branding story internationally as well as in China, the derivative “puppet” Chinese brands controlling by international western groups like SHANG XIA and Osiao, the popular and culture-related competitors from other Asian countries like Japan and Korea. How to effectively boost the solidarity and confidence from the Chinese consumers in China’s domestic market and to change the reputation and image of the “Made in China” overseas are two priorities yet to tackle for China’s marketers and policy makers.
(Source: Gallup Economy 2005)
Above is a research made by Gallup Poll in 2005, unlike Japanese at all, Chinese consumers were not patriotic regarding brand choice.
In 2007 McKinsey reported that the Chinese consumers are growing their faith for their national brands.
And in 2012, a study made by Accenture shows that:
“The consumer segment most likely to purchase foreign brands are young college-educated adults, mostly women, who are more affluent, free-spending—and twice as likely as any other segment to buy newly introduced brands. Two consumer segments in China that are predisposed toward the purchase of domestic brands: a largely male segment with average incomes who buy Chinese brands out of loyalty, and heads of households who favor practicality over flash and value over exclusivity. The majority of Chinese respondents believe that being trustworthy is the brand attribute that is most important to them when making buying decisions. Reliability is also a key factor, cited by a larger majority of respondents.
Consumers outside of China associate Chinese brands primarily with affordable price and value for the money. A majority do not believe Chinese brands will succeed in their country in the next few years, and some are unwilling even to try Chinese brands.”
From a more macro perspective, how to alter the association of “Made in China” oversea? One practice of the Anholt Nation Brands Index (ANBI) brand hexagon is the “Nation or Place Branding” could be explored from the following six areas:
1. Tourism: Tourism is the most visible element that includes the direct marketing of attractions and scenery. This category can have undue influence on the country brand since the marketing of majestic mountains, pristine beaches or other attractions can sometimes overshadow other equally important factors.
2. Exports: To a large extent, countries are represented by the products they produce. ANBI gauges performance in this category by assessing consumers’ levels of satisfaction with products made in a particular country. In addition, the index measures consumers’ tendencies to either seek out or avoid products made in a particular country.
3. Governance: Governance represents the inner workings and is a substantial driver of a nation brand. The governmental structure and the methods used to govern are widely reported in the global media. This includes a government’s trustworthiness and fairness of governance that is paramount. In addition, it is important that the government take responsibility toward reduction in poverty.
4. Investment/Immigration: This category represents the willingness of individuals to live in a particular country for a substantial period of time. This indicator is also representative of the perceived quality of education as expatriates consider the impact on their children.
5. Culture/heritage: The culture and heritage category measures the appreciation of or intention to consume popular, commercial cultural products and activities.
6. People: As representatives, a country’s citizens can widely influence perceptions of a nation brand. From a business perspective, culture represents a preference for the nationality of a job candidate. On a personal ranking, it measures the preference for a friend with a particular nationality.
And before the 2008 Beijing Olympic Games, in 2005 the China’s brand performance result is like this:
Apparently, like most of the successful stories, they had seized the essences of the pearls of Chinese brand equity – Culture and Heritage plus People. And also undeniable, one kind of successful China Brand story is written this way like Jahwa (one of the most successful Chinese FMCG group headquartered in Shanghai) which successfully branded Herborist in Europe like Italy, Spain and finally opened its boutique in Champs-Élysées in Paris in 2011.
Will China make the transit from “World Factory” to “Made-in-China Brand” and will it be another Japan or Singapore? A good story telling, partnership, and talents then? Definitely, maybe. Only one thing definite is to build China’s brand is now or never. And when you are served the refined Chinese cuisine from South Beauty Group in the flight from Paris to Shanghai with Air France, you feel that China was not that far away from France at least.
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