Local labels work on their visibility, strive to go global despite competition

Attendants stand at a Huawei booth at the World 5G Exhibition in Beijing, China, on Nov 22, 2019. REUTERS/Jason Lee

HUAWEI, Xiaomi, Haier, TCL, DJI, Vivo, Oppo, OnePlus, ICBC, Air China, Tsingtao, UnionPay-the list of internationally known Chinese brands is getting longer as more and more successful domestic companies expand by going global, in the process realizing that top-notch branding is not a nice-to-have option anymore but the key to survival.

If global brands such as Apple, Adidas, Nike, Uniqlo, Zara, and Converse could capture consumer imagination and loyalty in China, isn't it time that Chinese brands, too, should go global to command similar adulation in overseas markets?

Driven by such sentiments, Chinese companies, marketing gurus aver, are pulling out all the stops to complement their tangible strengths-massive scale of manufacturing, financial muscle, innovation capability and the mega opportunity to serve the world through the Belt and Road Initiative-with the soft power of brands.

A recent Ogilvy report based on the survey of chief marketing officers (or the equivalent) of 40 high-profile Chinese companies revealed as much.

"We believe Chinese brands have tremendous growth potential globally," said Chris Reitermann, Asia and China CEO of global marketing agency Ogilvy. "An early commitment and focus on a brand strategy that guides all overseas efforts will enable Chinese brands to develop a more sustainable business abroad."

The Ogilvy report identified the key drivers for Chinese enterprises' outbound expansion. They are seeking new markets for growth, to survive in spite of stiff domestic competition and to acquire advanced technologies.

Yet, except for the already famous Chinese brands such as Huawei, Haier and Xiaomi, newcomers from China on the global stage initially tended to rely not on branding but on distribution, manufacturing, even mergers and acquisitions.

But now, branding is increasingly becoming a game-changer in shaping consumer perceptions, especially as a growing protectionist sentiment looms over the global economy, making any outbound decisions more prudent, said Reitermann.

"I do think a lot of companies have underestimated the value of a clearly defined brand in getting people to understand who this company is, what this company does, and what its values are," he said.

The transformed macroeconomic environment is pushing companies to shift from the traditional M&A route to growth to more organic, green-field investment, and that makes a "clearly-defined brand" a necessity, he said.

Agreed Deng Delong, global president of consultancy Trout & Partners, which specializes in brand positioning. He believed the global distribution of assets will be conducive to world economy at large, and also accords with Chinese companies' goals of seeking new growth opportunities.

But instead of expanding recklessly overseas, brands should first identify local needs, position themselves accordingly and prove their relevance, he said.

"Especially amid economic uncertainties, a strong and unique brand proposition will entitle companies unparalleled pricing power. This would put them in an advantageous position even amid trade disputes," Deng said.

Realizing that branding calls for deep pockets, many Chinese companies are taking a gradual approach by working with overseas partners first to make an impact. - China Daily
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