Thursday, March 11, 2004
Chinese brand building
One of the questions that has intrigued me while keeping abreast of China's spectacular economic growth is how long it would take before Chinese brands become recognised worldwide. Funnily, it has often seemed to me that even India (with Wipro, Infosys, TCS, Ranbaxy etc) has/d stronger international brands than China. However, Chinese brands like Haier and Legend (now renamed as Lenovo) are well positioned to crack international markets. Haier, as I understand it, has major expansion plans in both India and the United States. I think its only a matter of time before Chinese brands become household names. Skeptics only need think back 20 years when Japanese cars were seen as extremely downmarket products. Now, Lexus actually competes with those venerable German cars at the upper end of the market, not to mention parent Toyota's experiments with hybrid cars. How will China get there? The The McKinsey Quarterly has two strategies.
The primary model is a step-by-step procedure in which products exported from China penetrate overseas markets through independent distributors serving discount channels. This gradual process would permit Chinese companies to gain an understanding of customer behavior and to build brand recognition. In the second model, Chinese companies buy an established brand that has fallen on hard times and then move its production to China to benefit from lower labor costs......etc etc
The primary model is a step-by-step procedure in which products exported from China penetrate overseas markets through independent distributors serving discount channels. This gradual process would permit Chinese companies to gain an understanding of customer behavior and to build brand recognition. In the second model, Chinese companies buy an established brand that has fallen on hard times and then move its production to China to benefit from lower labor costs......etc etc
