12 BANDT.COM.AU APRIL 29 2011 COMMENT When the topic of China comes up in marketing conversations it usually seems to be about how ‘we’ can get our brands into this booming market. For example, Sir Martin Sorrell, chief executive of the global WPP group recently said: “I would like China to be clearly our third largest market”. There’s rarely any talk of Chinese brands getting out of China – by which I mean Chinese domestic 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 50 brands: Lenovo (computers), Baidu (search engine) and Haier (white goods). In my ignorance, the only other Chinese brand I know is Great Wall Motors. But then 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 the loop when it comes to what’s going on in China with branding. According to one expert on the Interbrand blog, one of the biggest challenges for many Chinese brands over the medium term will simply be satisfying the booming domestic levels of demand. For this reason, the push for global growth might not be as intense as witnessed from Asian countries with smaller domestic markets, such as Japan and South Korea. But in the longer term, international expansion will be firmly on the agenda and we should expect to see many more Chinese brands marketed here. Robert Rath is General Manager of Digital Sensis. He recently returned to Australia after spending four years in China as CEO of Telstra Sensis China. Rath says: “Under the current five-year plan China is focused among other things on taking China to the world. We see this in China’s interest in acquiring foreign assets and businesses, along with China’s brands making a concerted push into the hearts and minds of overseas consumers, along with taking on global giants like Boeing and Airbus.” On this note, my boss Rupert Murdoch recently commented in an AFR interview that “China is buying up and developing half of Africa”. Indeed, a recent report on ‘The Impact of Chinese Investment in Africa’ , published in the International Journal of Business & Management, observed: “China’s African policy is being driven by its domestic development strategy. First, it wants to access energy resources. Second, it wants to establish export markets for its light manufacturing, services, agro-processing, apparel and communications offerings. Already, Africa is full of low-cost motorcycles, electronic and consumer 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. If you ever go to the African national of Mali and visit the capital you’ll be struck by the sheer number of mopeds on the roads, and the dominant brand of moped is Power K. which is made in China, and ridden all over the largest country in West Africa. Africa aside, one Chinese brands said to be destined for Australian shores in future might be NE Tiger, which describes itself as “China’s leading luxury brand”, specialising in furs, leather and haute couture. And looking beyond physical goods, what about Chinese service brands? A recent story in BRW looked at the accounting industry in China. It argued BIG TALK Adam Joseph Herald & Weekly Times readership director, News Limited MADE IN CHINA, BRANDED IN CHINA China is extending the presence of its brands into Africa at the moment, but we should expect to see more global players coming 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 time cracking the Chinese market. For one thing, they will face increasing competition from fast-growing domestic accounting firms. Perhaps in the not- too-distant future we’ll be talking of “The Big Five”, with a Chinese firm emerging as a major auditing player on the global stage. Of course, it’s not just Chinese brands that will be exported out of China in greater numbers in years to come. The flow of Chinese talent, students and tourists will also boom. According to Robert Rath from Digital Sensis: “With the recent liberalisation of travel for the mass Chinese population we will see tremendous outbound tourism and one thing China does well is numbers. Over the next few years we will see ‘Brand China’ be far more visible than ever before and the influence of China in tourism and global politics increase.” Perhaps the most telling evidence of brands Made in China can be found in the recent BRANDZ Top 100 Most Valuable Global Brands 2010 report. Five years ago, just one chinese brand made the BRANDZ global top 100. According to the most recent report, seven of the top 100 most valuable brands are now Chinese. These include China Mobile, Industrial & Commercial Bank 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 chinese takeover 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 solid presence in the US,” according to ICBC chairman Jiang Jianging. For now, the banks are branded “Banks of East Asia” – but I wonder if in five or ten years’ time americans might know them instead as ICBC, just as we are famiiar in Australia with a bank branded HSBC. ■ CHINESE BRANDS (CLOCKWISE FROM TOP): LENOVO, BAIDU AND HAIER BT.APR29.PG012.pdf Page 12 19/4/11, 4:18 PM