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Reaching beyond 'Made in China' to household name brand

By Chris Davis | China Daily USA | Updated: 2015-01-14 11:50

Chinese brands are facing an uphill climb among US consumers. China may be the largest source of imports to the US, yet, according to a couple of surveys done recently, only 6 percent of American consumers can name even one Chinese brand.

According to Millward Brown's new study, Chinese consumers know a lot about brands, especially luxury ones. The Internet and travel have broadened their catalogue of name choices. Last year 70 million Chinese traveled abroad, returning with brand awareness and sophistication to spread by word of mouth.

"Chinese consumers have explored the brave new world of products from the West," the study said. "They now want to mold it to fit more organically into the 5,000 years of Chinese history and culture."

When it comes to Chinese product names, however, Westerners are largely in the dark and know little beyond the ubiquitous brand called "Made in China".

Doreen Wang, head of Millward Brown's global brand database BrandZ, thinks it's because most Chinese companies are still in the early phases of marketing their brands to the US.

"Putting Chinese-branded products into US stores does not mean that you have established a brand in consumers' minds," she told Voice of America. "You need years of effort to accumulate 'brand equity'."

Contributing to the lack of recognition, other experts say, is that for decades China has been serving as an original equipment manufacturing hub for foreign brands.

E-commerce firm HD Trade services found that Chinese companies broaching the US have struggled, noting as an example Chinese sportswear maker Li-Ning, which closed its only US retail outlet in 2012 two years after opening it because of poor sales.

Li-Ning hasn't given up, however, as it has signed a deal with Finland-based L-Fashion Group to launch a product line in Europe and also set up a website to try to penetrate the US market aggressively through cyberspace.

A few Chinese brand names, of course, have been making a noticeable mark - appliance maker Haier and computer maker Lenovo, both studies found. Since buying IBM's personal computer division in 2005 and rebranding it as Lenovo, the company has become the largest PC maker in the world. And Qingdao-based Haier is the also the world's top-selling appliance brand.

Chinese brands are starting to compete more effectively for several reasons, the Millward Brown report said. "Chinese brands have improved in quality, leveraged their deep market knowledge and maintained a price advantage," it said.

In 2013, only one Chinese company - China Mobile - made it into BrandZ's Top 10 most valuable global brands. Last year, 13 Chinese brands were included in the top 100. The top 10 Chinese brands globally include Tencent, Baidu, China Construction Bank, Petrochina and Sinopec.

Sinopec, which runs China's largest chain of gas stations, builds its brand internationally by sponsoring events such as Formula I racing.

The growth of export sales of Chinese brands is relatively slow, the Millward Brown study found, with the greatest success coming among populations of overseas Chinese. Along with beer and spirits, traditional Chinese medicines are also gaining traction. One of the better known brands is Tong Ren Tang, which was founded in 1669 during the Qing Dynasty.

Chinese brands have more than name recognition to overcome in the US. There is also the "Made-in-China" syndrome to contend with. As recently as 2012 a survey by research group JWT Intelligence found that most adults in the US regarded Chinese-branded imports negatively - as being "cheap", "mass produced" with bad safety standards.

Chinese manufacturers earned a bad reputation in the US after decades of exporting poorly-made, unsafe and forged products, according to JWT Intelligence's Jessica Vaughn. "So now there is a really tough environment for Chinese brands that are seeking to expand internationally," she said.

JWT Intelligence's survey turned up some positive trends, however - 20 percent of respondents aged 18-34 and 48-67 said they found Chinese products "interesting".

Pointing to a promising future, the best opinions of Chinese brands were among the US "millennials" aged 18-34. Vaughn said that it was probably because a lot of Americans in that age group have been going to China for work, while at the same time a lot of Chinese students are coming to schools in the US.

"Millennials are interacting with Chinese on a daily basis and are more open than previous generations to the idea of Chinese brands," Vaughn said.

The report found that 25 percent of millennials would be interested in trying Chinese video games, foods and beverages, appliances, electronics and clothing.

What can Chinese exporters do to keep this kind of momentum going? Wang said to keep products innovative and simple to use.

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