Mainland Chinese product brands may still be largely unknown but executives say European and Asian consumers will soon be buying them as eagerly as they do Japanese or Korean products. While mainland products still suffer from consumers' perceptions of poor quality, Chinese corporations are gearing up to challenge more established rivals, determined to shed their shoddy image with innovation and competitive pricing.
A recent survey by Millward Brown found that 85% of Chinese and Hong Kong companies were already selling products abroad while another 67% of companies had a strategy in place to do so.
One Chinese company long on the vanguard of building its brand reputation is Haier, the country's largest household appliance maker that began setting up manufacturing bases in the Philippines and Malaysia in 1996. Its strategies have since won the admiration of businessmen worldwide as the state-owned enterprise cracked tough foreign markets including in the U.S. with cheap but high-quality refrigerators. "It's not just about advertising," said Elaine Reolfi, global brand director for Timken Company, a provider of bearings and mechanical parts to manufacturers such as Haier. Part of Haier's success is a result of strong product positioning built on the back of relationships with distributors and retailers, Reolfi said at a conference in Shanghai.
For two decades, as China transformed from plodding central planning to a more market-based system, its cumbersome and uncompetitive state-enterprises took advantage of home court, which was both cheaper and less risky. But since China's accession to the World Trade Organization in late 2001 the economic landscape has changed. Heated foreign and domestic competition have forced mainland corporations to battle against thinning profit margins by seeking new markets, as occurred in televisions and is now happening in the auto industry.
Copyright Agence France-Presse, 2005
