How Chinese Companies Can Build Global Brands

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I have deliberately misled you all with that post title. I don’t know how Chinese companies can build global brands. Sure, I have a few ideas, but since I’m not really a branding/marketing/advertising guy, I can’t really say with confidence that I can blaze a trail for local companies to the promised land.

So why the deception? I wanted to point out that there are a whole lot of other articles and papers out there on branding for Chinese companies that are just as lacking in substance, and these are unfortunately written by leaders of the advertising biz.

Allow me to use as an example Jez Frampton (love the name) of Interbrand, who had a column in Forbes today entitled “China: Brand Is A Missed Opportunity.” I’m really not sure what that title means, but I figured it had something to do with China and branding, so I took a look.

The subtitle, “The country needs to be known for more than cheap goods” is a bit of a groaner. It states the obvious, could have been written anytime in the last 15 years, and is not exactly eye catching. It suggested to me that the article would probably not tell me anything I didn’t already know, and this turned out to be the case.

Frampton begins by establishing his China credentials:

Drama, intensity and change: 2010 is the Year of the Tiger and it is fitting that, so far, the year has been defined by a turbulent economy and dramatic world events.

Impressive. Chock full of Chinesey goodness. I had to check the Google machine, but it turns out that Frampton is correct; it is the year of the tiger, and it has been a volatile one thus far. The logic here is that the economy is tough, so there is more competition, and therefore Chinese companies need to be better at marketing as they climb the value chain from cheap stuff to knowledge-based, innovative products. (I just summarized 3/4 of the article in one sentence, which is not a good sign.)

Here’s the point. Frampton is of course right that China needs to move up the value chain, innovate and develop global brands, but there are two problems with this thesis. First, I think even my mother has had an Op/Ed in Forbes or the FT that says the same thing. It’s been a standard meme now for at least five years (maybe ten). Frampton should have told the intern he had write the article to do something original. It’s hard to find interns with good writing skills these days.

Look, telling us about the success of Tsingtao, Hai’er, Lenovo and the big banks is not exactly breaking news. When my old law firm helped to bring several Chinese companies into the International Trademark Association back in 2000, guess which companies we talked to? Yes, Tsingtao, Hai’er, Bank of China, etc. In other words, folks were saying the same thing about these companies ten years ago. About the only interesting (i.e. newer) brand that Frampton includes is Baidu, and I firmly believe that as successful and powerful as that company is going to be in China, it will never be a global brand.

Second, although we’ve established that most of the article is a retread, all would have been forgiven if Frampton had included a bit on the issue that everyone wants to know: how do Chinese brands get from Point A to Point B? Perhaps Frampton is purposely leaving this out. Trade secret and all. “If you want to learn more about how your firm can make this exciting transition, call Interbrand today! Operators are standing by to take your call.”

I kept waiting for some real information. Frampton repeated several times that certain companies are now “focusing on branding.” What the hell does that mean? Does that mean more ad buys? Expanding the marketing budget? New trademarks? Seriously, I didn’t study business at school, and I’m kind of a dim bulb anyway, so telling me that companies are devoted to building their brand conveys zero information to me.

Deep into the article, Frampton finally gives us some examples of what branding looks like:

Even in the Financial Services industry, which as [sic, unless you’re a Brit and drop your ‘h’s] taken a blow this year, brands like ICBC, China Merchants Bank and Pin An Group of China have expanded their ATM networks, built Internet banking and customized personal finance services to the Chinese market–all which suggest that they are beginning to think more about building their brands.

Is Frampton really saying that setting up more ATMs and offering online services is an example of brand building? Just sounds like value-added services used to differentiate your core product from the competition. That’s not branding, that’s basic business. But I’m not the CEO of Interbrand, so I probably don’t know what I’m talking about.

In the end, what did I learn from this Op/Ed?

1. The Chinese economy is volatile — already knew that.

2. Chinese companies will face increased competition in the future — already knew that.

3. Chinese companies are not very good at building strong brands — fairly obvious, with a few exceptions.

4. A few examples of how Chinese companies have built strong brands.

Oops. Frampton never really got around to #4, which is a shame. It’s the only thing I wanted to know, and something that very few experts seem willing to talk about. The article isn’t bad, but the topic is old and there is nothing very useful in there.

How hard could it be to throw a few “branding tips” in there? I would have appreciated even something obvious like “Chinese companies need to build relationships with customers based on quality of service instead of low prices.” Oh well, maybe next time.

5 responses on “How Chinese Companies Can Build Global Brands

  1. shenmeniao

    I agree with what you are saying here. a little off the point of your critique here though…dont you think the perception of branding as a priority for Chinese companies is interesting? the culture in general is so focused on brand appeal but when it comes to developing a brand name or doing marketing work, most Chinese companies (in my experience) will focus on other things (usually short term return related).

    1. Stan Post author

      You’re absolutely right, and it is an interesting issue. Many Westerners have been waiting a long time for big firms over here to “turn the corner” and start building strong brands. This was the whole point of the Op/Ed I was smacking around.

      I think it will eventually happen once companies start thinking long-term. Perhaps that wasn’t a traditional way to look at things here in the private sector because the long term was so uncertain. Sometimes we forget that the market here is really only a few years old.

      1. andreasmoeller

        Agree with the above. Great dissemination of a pretty brain dead investigative article.

        I think Chinese companies will have to open up for hiring foreigners in large scale if they are to build global brands and I dont really see how that would happen anytime soon, neither for an electronics manufacturer from Guangdong or a giant company with strong connections to the state. Too many Neibu (internal) materials around.

        The pillars of branding for a global company changes so fast now that a multitude of different cultural influences are necessary in order to grasp these pillars and utilize them on a global scale. Consider the way brands are growing in the West in the web 2.0 era – openness and focus on society is becoming something the Western consumer will expect from a consumer product company. For such factors to become pillars of a Chinese company’s branding efforts it would take a complete change of mindset. Not just a business process mindset – but something deeply rooted into Chinese society.
        Some Chinese companies are experimenting with hiring foreigners for BD positions (mostly to seek out new customers from abroad though – short term sales stuff) and some are hiring business consultants on local markets – but a business consultant on a local market can usually only create some localized marketing concept and not assist in building a global brand. Building a global brand takes a global management and globally oriented processes.

        So You are absolutely right – the market here is only a few years old. Alot to learn still.

  2. Crystal

    One “good” thing to say about Mr. Frampton is that he knows how to stuff his URLs with keywords. The link to his post looks like this –> china-marketing-brands-baidu-haier-lenovo-cmo-network-interbrand. That’s a masterpiece of SEO :-)