China’s First Famous Consumer Brand

Betting odds on the top 5 brands most likely to become China’s first globally revered consumer brand

When Sony was opened for business after the devastation of World War II, its corporate mission was simple: to become the Japanese brand that made all Japanese brands respectable. Or as they said it, to “embody changing the image of Japanese products as being of poor quality.” Sony wasn’t just a electronics brand, it was a national brand. And over the next decades, Sony would indeed serve as a barometer of Japan’s rising stature in the world.

Coca-Cola, McDonald’s, Nike, Apple, the United States. Louis Vuitton, Chanel, Peugeot, France. BMW, Adidas, Allianz, Germany. Aston Martin, Burberry, the UK. Ikea, Sweden. Samsung, South Korea.

A country’s prestige is often correlated to the number of its globally recognized brands. Brands are national “soft power” exports— embodiments of national values and ambitions that can be “bought” by consumers anywhere in the world.

Today, China is already the world’s 2nd largest economy, but there is yet to be a consumer Chinese brand in the top 100 of the Fortune Global 500. And while this year’s Brand Z Report cited China Mobile, ICBC and China Construction Bank as the most valuable consumer brands in China, all of them have benefited significantly from their protected, state-backed status. Furthermore, a consumer in Bangkok or Milan would be hard-pressed to recognize, much less seek, any these brands in the same vain as an Apple iPhone.

Ultimately, while there is no question of flourishing China economic might, the world waits for its first mighty global consumer brand.

Here are our completely non-statistical odds on the top 5 Chinese brands most likely to take that mantle and the factors that stand in their way.

#5 Tsingtao (10:1)

Established in 1903 by German settlers in Qingdao, the beer brand is now distributed in over 60 countries and accounts for over 50% of China’s beer exports.

Argument for: It’s beer, people like beer. Low costs mean low barriers for trial. The advent of so-called “craft” beers means there is a strong global interest for non-traditional provenance.

Argument against: Confounding spelling and pronunciation to order from a bartender. China’s relatively young history to beer-making may hamper its credentials abroad. Brand doesn’t stand for anything beyond the city-origin

#4 Haier (15:2)

Over the past decade, Haier has aggressively expanded its product portfolio into air conditioners, refrigerators, microwaves, DVD players and more. Its appliances have won industry awards for superior quality and design. It is currently sold in over 160 countries

Argument for: Manufacturing quality household appliances is a tried-and-true entry path to brand power (e.g. Bosch, Sony, LG, Samsung).Their 2008 Olympics sponsorship instantly increased global visibility.

Argument against: A “value” brand perception that will linger until the brand innovates— difficult to do in a staid appliance category. May be benefiting from Consumers not knowing it’s a Chinese brand.

#3 Li-Ning (6:1)

Founded in 1990 by an Chinese Olympic gymnast, Li-Ning offers footwear, gear and apparel for a huge breadth of sports. Basketball, running, ping ping, handball, badminton— there’s something for every kind of athlete.

Argument for: Recent big name endorsements like NBA-star Dwayne Wade lend it real performance credibility and aspirational brand power. Strong risk-taking appetite— in 2010, Li-Ning opened a flagship store in Portland, Oregon (i.e. Nike’s backyard).

Argument against: Expanded too quickly without a unified brand strategy. 2012's surplus inventory and revenue loss has prompted down-sizing and a refocus on the homeland. Product technology feels like “copycat” version of Nike and Adidas’.

#2 Lenovo (4:1)

Founded in 1980's as a manufacturer of motherboards, Lenovo quickly rose to PC category leadership in China. Its 2005 purchase of IBM’s PC division loudly announced its entrance as a player in the global PC market. In 2012, it became the world’s largest PC maker— surpassing stalwart Hewlett-Packard.

Argument for: Well-established reach and success outside China. Pockets of true innovation like in its ThinkPad products. Beginnings of a differentiated brand positioning in “For Those Who Do.”

Argument against: They are the category leader in the dying PC category. Heavily dependent on continued popularity of Windows OS. To continue growing, they must win it the already crowded smartphone and tablet market. One word: Apple.

#1 WeChat (5:2)

Introduced in 2011 by Chinese tech giant Tencent, WeChat is now the most popular messaging app in the world by registered users. It is offered in over 18 languages across iOS, Android, Blackberry, Windows Phone platforms. It combines messaging, social media, geo-location, photo-sharing, voicemail, emoticon, walkie-talkie functionality all in app.

Argument for: Already more than 100 million users outside China. Free, no barriers to entry and packed some truly innovative features. This is a brand that its consumers interact with many times a day. Willingness to spend millions on celebrity spokespeople like Lionel Messi to make TV ads.

Argument against: Intense competition from all sides. Skype, KakaoTalk, WhatsApp, Instagram, Facebook— all over-lapping in features. Sensitivity about the Chinese government’s oversight. Long-term investment may be difficult for Tencent if a revenue model is not established.

///

Send us your thoughts @BBHShanghai.

And as always, stop by our for more insights on Chinese consumers, culture and contradictions. http://www.blacksheepchina.com/