Marx to marques

As China’s economy continues to grow and its consumers become wealthier, indigenous companies are anxious to rival the global awareness of established Western marques. Sarah Woods looks at how businesses there are discovering the importance of an effective branding strategy

China is no stranger to progression. This vast country’s economy is developing as fast as the Shanghai maglev train. Despite this growth, the nation’s perception of ’brand’ is still in its infancy.

Gradually, designers close at hand are spotting a shift in brand awareness for the few home-grown businesses.

It is now well known within the industry that the country’s government has a policy to move from ’made in China’ to ’designed in China’. There is more than one reason for this – it is becoming difficult to compete with other Asian countries when it comes to manufacturing, while Chinese consumers are becoming more brand-savvy through a combination of international travel and the introduction of Western products and retailers.

According to Jonathan Cummings, managing director of Start Creative Hong Kong, Chinese companies are realising the importance of creating their own products and positioning themselves within the market.

’Over the past 20 or 30 years, Chinese businesses would build themselves through advertising, or become known off the back of manufacturing for Western companies. But now some want to develop themselves as a brand in their own right. This creates a need to develop a powerful brand strategy – a long-term project which should underpin everything a company does,’ he says. He admits this is not a substitute for advertising, but it should be in place to build a ’consistent, enduring relationship with consumers’.

Of the minority of forward-thinkers, Cummings mentions Start’s own client, jeweller Chow Tai Fook, which has 800 stores. Appliance producer Haier and technology expert Lenovo are also among those that are successfully adopting international brand status.

Significantly, this business tactic applies mainly to the manufacturing industry, while much of the service industry remains under monopoly.

This still fledgling use of design means there is a need to tread carefully. Christine Losecaat, creative industries adviser to UK Trade & Investment, says ’The concept of brand in China is not clearly understood as they have not had to worry about it before. It’s not about brand. It’s about a fundamental change in business model. Until very recently, China was closed to international competition and now the government is asking manufacturers to go into competition with existing clients. It’s a big ask.

’China is certainly the most cash-rich country in the world, but for its companies to become international businesses they will have to move up the value chain. If they are not making their own products, then there is nothing to advertise and this needs to happen first.’

While China is beginning to grasp that design makes a difference, the level of awareness differs throughout the country depending on proximity to developed areas. There is also a marked contrast in brand awareness between mainland China and the commercial hub of Hong Kong.

Regardless of its relatively small population of seven million people, compared with 1.3 billion in mainland China, Hong Kong is firmly Westernised and claims some of the biggest international brands in the world.

Phil Gray, managing director of Cambridge-based consultancy Quadro, which is a member of the UKTI Design for China taskforce, agrees that the way to Chinese consumers’ hearts and minds is to develop home-grown brands. ’China has gone from being a regimented country with no choice to [one where consumers now have] the ability to choose things,’ he says. ’The Chinese have a thirst to learn and are doing so rapidly. There are emerging brands, and they can’t succeed without brand strategy.’

Gray adds, ’China has recognised that it can sell something cheaply and make money, but it might take 20 years to build a brand. A company can throw money at an advertising campaign but it’s not enough – there is a level of naivety around that. Brands need substance, not just a marque or a bit of promotional material. Chinese businesses are starting to realise that design is a much better proposition.’

Chinese consumers have never been so aspirational. Clearly, there is a need to respond to this by creating equally ambitious native products bolstered by a positive design approach.

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