Chinese Brands: When Will They Succeed? – Forbes

I laughed when I read the comment from a 36-year-old guy in China who was looking to buy a new car. He checked out the Chinese car brands meticulously, only to settle for a BMW. His comment? “I feel I can’t trust a Chinese car.”

Chinese brands will only succeed on a global scale when the Chinese themselves start loving them. There’s still a question mark over that, it seems.

In foreign markets, a good number of Chinese brands’ customers don’t actually realize they are Chinese. Take Haier, a manufacturer of home appliances, which is probably the closest China gets to an international brand. Haier has a US subsidiary and factory, so Americans buy its Made in the USA products without necessarily discerning the China connection.

What’s the sweet spot for Chinese brands? Ones that can undercut western equivalents in price terms while matching them for brand appeal. That goal is a long way off, but plenty of Chinese companies believe that time is coming.

The Chinese I’ve spoken to are certainly concerned about the lack of credibility of their brands. Some of them have simply given up and splashed out to acquire foreign brands. But others are using western marketing and design expertise, with some impressive results.

Besides Haier, here are five Chinese brands on my hit list, covering technology, appliances, fashion and beauty:

Lenovo: OK, no big surprises here. When Chinese computer giant Lenovo bought IBM’s PC business in 2004, the world was forced to sit up and take note. Now Lenovo is heading for the tablet sector. The first reviews of the Lenovo ThinkPad, suggest it will perform well against the iPad2, although it is heavier and has less battery life. Lenovo is also attacking Apple on the smartphone front with Android-based devices, again undercutting Apple with a $150 Android-based handset aimed at those with lower incomes.

Huawei: Founded in Shenzhen in the 1970s, Huawei is now the world’s second largest telecoms equipment company, second only to Ericsson, but it’s relatively new to selling consumer products such as smartphones and computer tablets. The goal is to push global sales from devices from $4.5 bn in 2010 to $6bn this year. It sees Europe as a key to growth, with less regulatory issues than in the US. In the UK, for example, it is launching mobile phones that tend to undercut its western competitors. Huawei is also looking to developing markets, where competition is less intense and its lower priced products could be particularly well received. Nigeria is a test case in Africa.

Li-Ning: A sports footwear and clothing company with 8,000 stores across China that is challenging Nike and adidas in the Chinese market. Over the years, it has borrowed many ideas from its western rivals, but is now trying harder to carve out its own image. In terms of heritage, it’s got plenty going for it. Li Ning himself is a Chinese national hero, who won three gold medals in gymnastics at the 1984 Olympics. Li-Ning Group has recently begun pushing into Europe through a long-term deal with Finland’s L-Fashion. It’s also entered into a partnership with Chicago-based Acquity Group to boost its American distribution and brand awareness.

JNBY: The Hangzhou-based hip fashion company was founded in 1994 and has grown to more than 500 stores, almost all in China but including a flagship in New York’s SoHo and a handful of shops in Canada and Singapore. Its name is short for “Just Naturally Be Yourself.” The company initially drew heavily on deconstructed Japanese style for its signature designs but has shown more versatility in recent years, expanding into a full womenswear, menswear and childrenswear offer.

Herborist: In 2005, the Herborist beauty brand was distributed through department stores across China with sales of 100 million euros. Herborist then began an aggressive expansion strategy, working with a French design & packaging agency (centdegrés) to transform the graphic identity of the brand. It developed a network of boutiques in China and now has 1,000 shops, a spa in Shanghai and a turnover of over one billion euros. Shanghai Jahwa, which owns the brand, has also recently launched Shanghai Vive, a high-end beauty brand, pitched to compete with European giants such as Chanel.



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