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Mainland Brands Battle With ‘Made in China’ Stigma

Looking ahead 10 years from now, you may just be sporting Li Ning’s latest running shoes, baking in Haier’s top class ovens or “baidu-ing” on China’s fastest growing search portal, Baidu.

Workers make sports shoes on a product line at the Li-Ning (Jingmen) Industrial Park on December 17, 2009 in Jingmen of Hubei Province, China. Chinese sportswear firm Li-Ning which is China's largest sports clothing company, invested about 1.2 billion yuan with its partners to build the 3,200 ares Industrial Park.
China Photos|Getty Images
Workers make sports shoes on a product line at the Li-Ning (Jingmen) Industrial Park on December 17, 2009 in Jingmen of Hubei Province, China. Chinese sportswear firm Li-Ning which is China's largest sports clothing company, invested about 1.2 billion yuan with its partners to build the 3,200 ares Industrial Park.

While Li Ning, Haier and Baidumay not be household names now, experts in the fields of market research and marketing believe that Chinese companies have the potential to be leading global brands in the not-so-distant future.

“Chinese have shown themselves able to build enterprises from a very low base, leveraging low-cost sourcing and increasingly efficient systems,” noted Dr. Robert Lawrence Kuhn, author of How China’s Leaders Think.

“Within a decade, Americans need to be prepared to see Chinese brands and not just the ‘Made in China’ label on store shelves,” Shaun Rein, managing director of Shanghai-based China Market Research Group, added.

However, for the majority of mainland brands, Rein believes it will be a lengthy and difficult process before they are “accepted by Western consumers," citing Japan’s Sony and Korea’s Samsung as examples of companies that struggled to attain their status as the world’s leading electronics makers.

Chinese companies, for the most part, are just learning how to brand in their home market, he said.

Fighting The Stigma

“The ‘Made in China’ stigma is serious,” flagged Rein, adding that Chinese brands need to establish an element of trust with consumers, which will require higher quality control and more attention to the packaging of products.

“One bad case of poor quality products like a TV blowing up or a wall being found to have carcinogens will destroy these brands forever.” China has faced a series of scandals at home and abroad including lead-containing toys, tainted medicines as well as contaminated milk.

In addition to this, Mike Amour, CEO, Asia Pacific of Project Worldwide, says building an emotional connection with customers is vital for Chinese companies.

“Successful brands today...know how to engage consumers through a stronger emotional connection, through very cleverly using multiple channels and media…it's all about thinking holistically,” Amour elaborated.

Invest China - A CNBC Special Report
Invest China - A CNBC Special Report

Kuhn shares a similar view, noting that the success of Chinese brands on a global level will hinge on whether China is able to develop its soft power, or the allure of its culture and lifestyle.

Unlike the United States which projects its soft power through brands such as Apple , Disney and McDonalds , he says mainland products often come across as “extensions of China’s grasping for dominating power" rather than a representation of a "historically high civilization".

Kuhn concludes that it will be "much more difficult" for Chinese consumer brands to advance to international standards compared to the country’s energy and telecommunications firms which have "less hurdles to surmount, and can better leverage Chinese companies natural strength."

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