Branded in China (Sold Everywhere)

Related entries: Corporate News, General, Strategy

Branding of foreign products in China was covered in a recent post (see here), as was China’s overseas investment drive (see here). But what about Chinese brands in the international market?

When David Tang (Hong Kong’s entrepreneurial cigar king) came up with his Shanghai Tang brand in Hong Kong in 1994, he aimed to make it the first global Chinese brand. He launched a range of luxury products that were “Made by Chinese” (or, as on this blogger’s 1997 Hong Kong handover watch…“Watched by Chinese”) rather than the already over-familiar “Made in China”.

Back then (and it seems like a long time ago!) few people imagined how strongly the leading Chinese businesses, their Harvard MBA’s – and their brands – would emerge on the world stage. And this is just the beginning…so nobody can afford to be complacent!

Some examples of Chinese brands “going global” include:

• Haier: Based in Qingdao, it has half he market for small fridges in the US – and recently tried to takeover the US brand Maytag. It is also making strides in Europe.
• TCL: The largest maker of televisions in China. TCL did manage to take over the French company Thomson Electronics (and thus the RCA brand in the US). Their aim? “We want to be the next Sony; we want to be the next Samsung.”
• Huawei Technologies: The company, which makes telecoms networks, is focused on international growth (and is very aggressive on price). Foreign sales rose 117 percent, to US$2.3 billion, in 2004 – and last year account for around 41 percent all sales.
• China Mobile: Although only operating in China for now (as noted on the China Herlad Blog), the company was listed as the fourth most valuable global brand by Milward Brown.
• Chery Automobile: Seeking to enter the US market in 2007 – having recently been under a cloud of IPR lawyers from GM.
• Nanjing Automotive: Buyers of MG Rover cars of the UK last year.
• Pearl River Pianos: Which accounted for about 10 percent of the American piano market by 2002 and is on track to reach 25 percent.
• China National Offshore Oil Corp. (CNOOC): China’s third-largest oil company – which was blocked (for what seem to have been ill-informed, superficial political reasons) in its bid for the US oil company Unocal.
• Lenovo: This is the company that has made all the headlines recently, with its US$1.5 billion takeover of IBM’s personal computer business.

Having already re-branded itself from Legend to Lenovo (implying “new”) the company now plans to double its US$13 billion sales by 2010 – another Chinese 5-year plan, but this one is focused on the international, not the China, market. And the strategy is supported by the company’s brave decision to move its headquarters from Beijing to New York State. The surprise to many is that Lenovo started marketing computers under its own brand overseas so soon – instead of using the IBM name. However, the company’s aggressive approach has also caught the eye of suspicious US regulators, who have investigated possible risks associated with a purchase of 16,000 computers by the State Department.

Another victory for short-term protectionism? Perhaps. But the long-term trend is clear. Products of all sorts will no longer just be “made in China” – they will be branded there too.

See news sources:

Ever heard of Lenovo, Haier, CNOOC? You will.
By Todd Crowell | Contributor to The Christian Science Monitor
CFO Asia — May 2005 — Feature — China’s New Globalizers
Huawei initially concentrated on China, where it rode the amazing growth of the telecom sector. … Instead of building a global brand like Huawei is doing, …

China’s Chery cars to make US debut in 2007
Imports into the United States of cars manufactured by China’s Chery Automobile will likely begin at the end of … North American International Auto Show …
Nanjing Auto starts construction of MG Rover plant in China …

BEIJING (AFX) – Nanjing Automobile Corp said it yesterday began construction of
a plant to produce MG Rover cars, as part of its plan to revive the MG Rover …
CEBIT China’s Lenovo to double sales by 2010 – chairman
Forbes – USA

… Top-line growth will be driven by an expansion of the firm’s busin ess client operations outside China, Yang told a conference at the CeBIT technology fair. …
People’s Daily Online — Lenovo unveils its own brand in US

Lenovo began as a Chinese company, and Asia accounts for more than half its PC
… Laptops bearing the Lenovo brand start at US$599 and PCs with flat-panel …

Lenovo caught up in US security panic
Asia Times Online, Hong Kong – Apr 4, 2006
… Broadcasting Corp, Lenovo believes that “an open investigation or probe … IBM has a 19% stake in Lenovo as well … While China would love to have a multinational PC …

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