Made in China Branded in China B&T mag Apr 2011

12 BANDT.COM.AU APRIL 29 2011

COMMENT

When the topic of China comes up in marketing conversations it usually seemsto be about how ‘we’ can get our brands into this booming market. Forexample, Sir Martin Sorrell, chief executive of the global WPP group recentlysaid: “I would like China to be clearly our third largest market”. There’s rarelyany talk of Chinese brands getting out of China – by which I mean Chinesedomestic brands being exported into Australian and global markets.

I recently read an Interbrand report ranking the Best Chinese Brands 2010.What really surprised me was that I had only heard of three of these top 50brands: Lenovo (computers), Baidu (search engine) and Haier (white goods). In my ignorance, the only other Chinese brand I know is Great Wall Motors. Butthen I’m no expert. I’ve never even been to China (not yet anyway – however I’m always open to a sponsored field trip).

I suspect I’m not the only marketer or businessperson who feels out of theloop when it comes to what’s going on in China with branding. According to oneexpert on the Interbrand blog, one of the biggest challenges for many Chinesebrands over the medium term will simply be satisfying the booming domesticlevels of demand. For this reason, the push for global growth might not be asintense as witnessed from Asian countries with smaller domestic markets,such as Japan and South Korea. But in the longer term, international expansionwill be firmly on the agenda and we should expect to see many more Chinesebrands marketed here.

Robert Rath is General Manager of Digital Sensis. He recently returned toAustralia after spending four years in China as CEO of Telstra Sensis China.Rath says: “Under the current five-year plan China is focused among otherthings on taking China to the world. We see this in China’s interest in acquiringforeign assets and businesses, along with China’s brands making a concertedpush into the hearts and minds of overseas consumers, along with taking onglobal giants like Boeing and Airbus.”

On this note, my boss Rupert Murdoch recently commented in an AFRinterview that “China is buying up and developing half of Africa”. Indeed, arecent report on ‘The Impact of Chinese Investment in Africa’, published in theInternational Journal of Business & Management, observed: “China’s Africanpolicy is being driven by its domestic development strategy. First, it wants toaccess energy resources. Second, it wants to establish export markets for itslight manufacturing, services, agro-processing, apparel and communicationsofferings. Already, Africa is full of low-cost motorcycles, electronic andconsumer goods sourced from China”

Africa awash with Chinese brands? Who’d have thought it? Funnily enough,I discovered one such example while watching a documentary on the ABC. Ifyou ever go to the African national of Mali and visit the capital you’ll be struckby the sheer number of mopeds on the roads, and the dominant brand ofmoped is Power K. which is made in China, and ridden all over the largestcountry in West Africa.

Africa aside, one Chinese brands said to be destined for Australian shoresin future might be NE Tiger, which describes itself as “China’s leading luxurybrand”, specialising in furs, leather and haute couture. And looking beyondphysical goods, what about Chinese service brands?

A recent story in BRW looked at the accounting industry in China. It argued

BIG TALK

Adam JosephHerald & Weekly Times readership director,News Limited

MADE IN CHINA, BRANDED IN CHINAChina is extending the presence of its brands into Africa at the moment, but we should expect to see more global playerscoming from China over the next five years at home and across other markets

the Big Four – PwC, KPMG, Ernst & Young, Deloitte – would have a tough timecracking the Chinese market. For one thing, they will face increasingcompetition from fast-growing domestic accounting firms. Perhaps in the not-too-distant future we’ll be talking of “The Big Five”, with a Chinese firmemerging as a major auditing player on the global stage.

Of course, it’s not just Chinese brands that will be exported out of China ingreater numbers in years to come. The flow of Chinese talent, students andtourists will also boom.

According to Robert Rath from Digital Sensis: “With the recentliberalisation of travel for the mass Chinese population we will seetremendous outbound tourism and one thing China does well is numbers. Overthe next few years we will see ‘Brand China’ be far more visible than everbefore and the influence of China in tourism and global politics increase.”

Perhaps the most telling evidence of brands Made in China can be found inthe recent BRANDZ Top 100 Most Valuable Global Brands 2010 report. Fiveyears ago, just one chinese brand made the BRANDZ global top 100.According to the most recent report, seven of the top 100 most valuablebrands are now Chinese. These include China Mobile, Industrial & CommercialBank of China (ICBC), Bank of China, China Construction Bank, PetroChina,Baidu and China Merchants Bank.

If you haven’t already spotted it, four of the seven are in financial services.The chessboard is already in play, Erlier this year the ICBC launched a chinesetakeover of a US retail bank, buying 80% of Bank of East Asia’s American unit.This acquisition gave ICBC ten branches in California and three in New York.According to Bloomberg, the acquisition “will enable us to establish a solidpresence in the US,” according to ICBC chairman Jiang Jianging.

For now, the banks are branded “Banks of East Asia” – but I wonder if infive or ten years’ time americans might know them instead as ICBC, just as weare famiiar in Australia with a bank branded HSBC. ■

CHINESE BRANDS (CLOCKWISE FROMTOP): LENOVO, BAIDU AND HAIER

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