It’s quite fashionable these days to talk about China’s global rise and what the future under our Chinese overlords is going to look like. Personally, my favorite is the Joss Whedon/Firefly vision of the far future, where everyone speaks Chinese as a second language, mostly for cursing.
You can’t really blame all the hype. What with the solid GDP numbers, mounds of cash in hand, and decent fiscal position of the government (sort of), everything looks rosy from Beijingland. Indeed, if you close one eye and forget about the property market, the trade situation, and the currency, what’s not to love?
It seems to follow that if China is on the rise, then the successful companies that are leading the charge will be the ones moving offshore and conquering overseas markets. Right?
A recent China Daily article makes the case:
The likes of Google, Apple, Microsoft and McDonald’s had better watch out.
Major Western brands are unlikely to be able to bestride the globe in the same way they have done over the past 100 years or more.
Many of the new brands of the future are as likely to come from emerging markets such as China, Brazil, Russia and India as from current developed markets.
According to the recent Brandz Top 100 Most Valuable Global Brands 2010 survey, produced by global market research and consulting firm Millward Brown, 13 of the world’s leading 100 brands are from emerging countries, compared with just one four years ago when the survey was first produced.
Some admirable cheerleading there. That does sound serious. But who are these companies, and should I be dumping my Blue Chips for Red Chips? Well, you may wish to hold off on those transactions.
China has seven in the top 100 with China Mobile heading the list in eighth position with a brand value of $52.6 billion, closely followed by ICBC in 11th spot, valued at $43.9 billion.
Other Chinese brands to make the list include Bank of China, China Construction Bank, PetroChina, Internet search engine company Baidu and China Merchants Bank.
Still impressed? What we have here are seven companies being touted. Four are banks, one is an oil company, and the remaining two are gargantuan primarily because China’s population is ridiculously large.
The top global brands, in comparison, are firms like Google, IBM, Apple, Microsoft, Coca-Cola, and McDonald’s. The only Chinese company that is even in the same market as one of these enterprises, the search engine Baidu, is not on anyone’s list to “break out” of the China market and compete globally. For all of Baidu’s success, it is first and foremost a domestic company, one that would have its head handed to it very quickly if it tried to go up against Google in a major overseas market.
Some Chinese brands have made serious inroads into overseas markets with significant brand recognition: Tsingdao Beer and Hai’er appliances would be my top two. We certainly might see a Chinese car develop some brand recognition overseas within a few years, although whether that would be a Yugo-type infamy or a more respectable Volvo-type reputation remains to be seen.
If at the moment, however, the “unstoppable” global brands from China are banks (three of the four are State-owned, by the way) and oil companies, I’m not impressed. Try a consumer product, restaurant chain, or Net company, and then we can reassess.