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1、Chapter 1 The Long March“Made in China” lost its novelty long ago. The label has become ubiquitous in much of the world, affixed to shoes, toys, apparel and a host of other items produced for global companies. What is a novelty, however, are China-made goods sold under Chinese brand names. Only a ha
2、ndful of Chinese firms so far have the money and the management expertise to establish international brands; most of the vast remainder are struggling to attain even national recognition. But the pioneering companies testing the waters overseas could be on the threshold of something big.Some believe
3、 that individually, with the help of enterprising local management or eager multinational partners wanting to add new products to their stable, Chinese brands could become a global phenomenon within a decade, marketed on quality and exotic appeal, as well as competitive pricing. Says Viveca Chan, Ho
4、ng Kong based managing director at Grey China, an advertising agency: “If theres one country in the world that has ample potential for taking brands global, its China.”In the short term, the strongest promise is in Chinese medicine, herbs and specialty food, as well as goods that play to the romanti
5、c foreignness of China whether in cosmetics, fashion or music. Says Kevin Tan, general manager for China of market-research firm Taylor Nelson Sofres in Shanghai: “Theres still a lot of mystique associated with China. If youre taking something like cosmetics, which is image-drivensuddenly youve got
6、a strong player.” Also making a bid to go global are a few trendsetting Chinese beverage and beer brands. Further down the road there is brand-potential for products such as home appliances that can offer quality at a competitive price.Some of these brands will eventually go abroad via joint venture
7、s of mergers and acquisitions. For their foreign owners, the brands will provide speedier access to Chinas consumer market and distribution channels, while at the same time serving to complement the owners premium brands in global markets.The concept of Chinese brands has been evolving through the 1
8、990s, but is mow getting greater attention at home. Although the domestic market is still robust, a handful of state-owned enterprises, or SOEs, including listed Chinese companies, are now looking to establish international brands because they reckon the quality of both their products and their mana
9、gement has improved. Chinese joint ventures think their products can compete on quality with foreign brands anywhere, while enjoying the advantage of being perceived as exotic.Besides bringing in additional revenue, a global brand also burnishes a companys image in China, stimulating sales among sta
10、tus-conscious domestic consumers. For example, state-owned soft-drinks maker Jianlibao has developed its overseas market in part to “establish a good image”, which in turn enhances consumption at home, says Chief Executive Han Weixian.But building a brand takes time, money and marketing savvy. Some
11、Chinese brands have nudged into the international market on the back of competitive pricing, but have also utilized other strategies. Jianlibao has highlighted its Asian appeal, presenting itself as the preferred rehydrating sports-drink of Chinas athletes, while Meidi, an air-conditioner maker, is
12、pushing for greater brand recognition. Others like Haier, one of Chinas leading home-appliance producers, have pointedly steered away from price, competing instead on product quality and an efficient distribution and after-sales service. In another example, the American direct investment firm, Asian
13、 Strategic Investment Corp., or Asimco, has positioned its recently acquired Five Star beer as a premium brand.Of course, global sales dont mean global brands, as Grey Chinas Chan points out. And its still early days of Chinese companies. For a start, investment funds for brand promotion are hard to
14、 come by, says Chu Liangjin, the Qingdao-based director of the overseas division of Chinas Tsingtao brewery. “No more than 5% of our total export sales can be reinvested in promoting our brand overseas,” explains Chu, adding that Tsingtao is trying to persuade the foreign-currency authorities to cha
15、nge this standard practice for SOEs. With the governments emphasis on preventing the outflow of foreign currency, the chances of the restrictions being lifted are slim.Although targeted at SOEs private companies have greater spending freedom the 5% limit is bound to hamper Chinese brands. Jianlibao,
16、 for example, has invested about $10 million to sell its brand in the U.S. market, but Li Jingwei, the companys general manager, knows thats just a drop in the bucket. Sitting in his office at Jianlibaos industrial complex in Sanshui, a 40 minute drive from Guangzhou, Li reckons that to successfully generate brand recognition among Americans, the company needs to spend at least $50 million 100 million on marketing. He has no doubt that consumers w