China has no brand name recognition

Discussion in 'West Asia & Africa' started by mattster, May 25, 2010.

  1. mattster

    mattster Respected Member Senior Member

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  2.  
  3. tarunraju

    tarunraju Moderator Moderator

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    If they can't make brands, they'll buy them. Hummer, for example, is now a Chinese brand.
     
  4. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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  5. mattster

    mattster Respected Member Senior Member

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    Can someone please print out the whole article in full. I am not sure how to do that.
     
  6. nitesh

    nitesh Mob Control Manager Stars and Ambassadors

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    yes boss here it is:



    Quick: Think of a Chinese brand name. Japan has Sony. Mexico has Corona. Germany has BMW. South Korea? Samsung.

    And China has . . . ?

    If you're stumped, you're not alone. And for China, that is an enormous problem.

    Last year, China overtook Germany to become the world's largest exporter, and this year it could surpass Japan as the world's No. 2 economy. But as China gains international heft, its lack of global brands threatens its dream of becoming a superpower.

    No big marquee brands means China is stuck doing the global grunt work in factory cities while designers and engineers overseas reap the profits. Much of Apple's iPhone, for example, is made in China. But if a high-end version costs $750, China is lucky to hold on to $25. For a pair of Nikes, it's four pennies on the dollar.

    "We've lost a bucketload of money to foreigners because they have brands and we don't," complained Fan Chunyong, the secretary general of the China Industrial Overseas Development and Planning Association. "Our clothes are Italian, French, German, so the profits are all leaving China. . . . We need to create brands, and fast."

    The problem is exacerbated by China's lack of successful innovation and its reliance on stitching and welding together products that are imagined, invented and designed by others. A failure to innovate means China is trapped paying enormous amounts in patent royalties and licensing fees to foreigners who are.

    China's government has responded in typically lavish fashion, launching a multibillion-dollar effort to create brands, encourage innovation and protect its market from foreign domination.

    Through tax breaks and subsidies, China has embraced what it calls "a going-out strategy," backing firms seeking to buy foreign businesses, snap up natural resources or expand their footprint overseas.

    Domestically, it has launched the "indigenous innovation" program to encourage its companies to manufacture high-tech goods by forcing foreign firms to hand over their trade secrets and patents if they want to sell their products there. Since 2007, thousands of Chinese businessmen have attended government-sponsored seminars on "going out," learning everything from how to do battle with domineering Americans and Britons during conference calls to why a Chinese boss should think twice about publicly humiliating his wayward foreign workers -- as he'd do to his staff at home.

    China has also moved to re-brand China itself. Late last year, when memories of China's poisoned pet food and deadly milk were still fresh, the Ministry of Commerce contracted with the global advertising giant DDB for a $300,000 ad showing a series of high-tech products, from top-of-the-line running shoes to an iPod. As a guitar wails, a voice intones: "When it says 'Made in China,' what it really means is made in China, made with the world."

    Remaining insular

    In recent months, the Western media have hyperventilated with stories about China's going-out strategy and about Chinese firms buying up the globe -- Oil! Gas! Cars! -- and even investing in the United States. In 2000, China had $28 billion in overseas investments; this year, it could break $200 billion.

    But a little perspective: Even if China's total foreign direct investment hits $200 billion, it still pales in comparison to smaller economies, such as Singapore's, Russia's and Brazil's. And China has plunked down only about $17 billion in rich countries, equivalent to the overseas assets of a single medium-ranked Fortune 500 company.

    The 34 Chinese companies on the Fortune 500 list basically operate in China only. The world's three biggest banks are Chinese, but none is among the world's top 50, ranked by the extent of their geographical spread.

    "Moving forward another 10 years," said Kenneth J. DeWoskin, chairman of Deloitte's China Research and Insight Center, "it's hard to see how viable Chinese companies will be if they just stay in China."

    China's attempts to fight what it sees as the stranglehold of foreign patents and intellectual property rights have also had hiccups.

    China is estimated to have paid foreign firms more than $100 billion in royalties to use mobile telephone technology developed in the West, according to executives of Western communications companies.

    So in the late 1990s, it decided to develop its own. But after more than $30 billion in development costs, its unique technology still has fewer than 20 million users in a market of more than 500 million.

    Handset makers have told China's government that they won't produce phones equipped with the new technology unless they are given subsidies. And China has resorted to giving away the technology to Romania and South Korea to encourage broader use. "China is still stuck," said Joerg Wuttke, former president of the European Union Chamber of Commerce in China and a 25-year veteran of doing business in China. "There is a huge disconnect between the money spent in universities and the lack of products."

    China also faces enormous challenges to creating globalized firms. Studies of Chinese executives show that they spend far more time with government officials -- who in China are the key to their profits -- than with customers, who are the key to "Chinese executives like me need to spend a generation outside China to learn how business is done around the world," said Hua Dongyi, who chairs a massive Chinese mining company in Australia but has also built roads in Algeria and infrastructure in Sudan. That's definitely true for Hua. In April, he was forced to apologize to his Australian workers after he told Chinese media that the workers were money-grubbing and lacked the "loyalty and sense of responsibility existing in many Chinese enterprises."

    Lenovo's lessons

    The Chinese computer maker Lenovo, which bought IBM's ThinkPad in 2004, wasn't the first Chinese company to acquire a big foreign brand, but it's still considered the pioneer.

    That's probably because China's other forays into buying foreign brands have ended in disaster. An attempt by the Chinese electronics firm TCL to become the world's biggest TV manufacturer in 2003 fizzled when its French subsidiary lost $250 million.

    A move by a private Chinese company to take over a once-dominant U.S. lawn mower company, Murray Outdoor Power Equipment, ended in bankruptcy because, among other mistakes, the Chinese firm didn't realize that Americans tend to buy mowers mostly in the spring.

    Lenovo purchased IBM's laptop division for $1.25 billion -- a gutsy move considering that IBM's renowned ThinkPad brand lost $1 billion from 2000-2004, twice Lenovo's total profit during that time.

    Although Lenovo's move was portrayed by many in the West as a sign of China's rise, Lenovo acted out of desperation, said Yang Yuanqing, who has been a senior executive at Lenovo since it was founded in the 1980s with government funds.

    Lenovo was losing market share in China. Its technology was middling. It had no access to foreign markets. With one swoop, Lenovo internationalized, purchased a famous brand and got a warehouse of technology as well.

    But from the start, things were tough.

    Lenovo's American competitors fanned anti-Chinese flames in Congress, insinuating that Lenovo could insert spyware into the computers it was selling to the U.S. government. The firm also faced enormous challenges bridging cultural divides among U.S. workers at its Raleigh, N.C., headquarters, the Japanese who made ThinkPads and the Chinese who made Lenovos. William Amelio, the firm's second chief executive who had been lured from a top job at Dell, remembers his first trip to Beijing as the new Lenovo boss in late 2005.

    "I was greeted with rose petals and the red carpet treatment and company songs. In Raleigh, everyone's armed were crossed. It was like, 'Who died and left you the boss?' " he said. "You had the respect for power in the East and the disdain for authority in the West." Meanwhile, Lenovo's competitors were moving. In 2007, Acer, the computer powerhouse from Taiwan, snapped up the European computer maker Gateway, effectively cutting Lenovo off from European customers. Lenovo slipped to fourth place worldwide behind HP, Dell and Acer. Then the global financial crisis hit, and Lenovo, which sold a large percentage of computers to businesses, was hit hard.

    Lenovo responded by following the lead of an increasing number of Chinese firms: returning to its roots. Yuan Yuanqing was reappointed its chief executive and refocused Lenovo on the company's one bright spot: the China market. Sales skyrocketed, despite lackluster performance overseas.

    Lenovo, according to Bob O'Donnell, a longtime expert on personal computers at IDC, "became a Chinese company again."

    Still, analysts said Lenovo's rocky foreign adventure saved the company.

    Lenovo might not have much of a brand overseas, but its association with a foreign firm has helped it in China. Lenovo's computers routinely command twice the price in China that they do in the United States. Lenovo offers its top-of-the-line ThinkPad W700 to the Chinese government at $12,500; in the United States, it runs for $2,500.

    Chinese officials pushing the going-out strategy have looked at Lenovo as a model for Chinese firms seeking to become known multinational brands. But for China's companies, going out might be the secret to staying alive at home.

    This year, the Chinese car company Geely bought Volvo from Ford. Pundits figured it was to expand China's economic heft -- and its brands -- overseas. But as Geely's founder, Li Shufu, put it, "Volvo will find a new home market in China."
     
  7. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    The article documents well the point I have been making about China's failed business acumen. They only know how to operate inside the safe confines of the Chinese market where the CCP protects them like spoiled children. Every foray into the developed markets have ended in disaster. It is telling just how oblivious Chinese executives are that they have to attend seminars not to treat their overseas employees like crap as they do at home. Acquiring foreign brands is not the answer to making a name for Chinese products. You have to first address the stigma that accompanies "Made in China." With the internet it is now readily available to see who makes the quality products and who doesn't, online customer reviews have made it difficult to hide. Some of the traditional big brands who have outsourced to China have taken a hit from this as many of their products have decreased in quality. The phrase "They don't make them like they used to" really took a life of its own when this phenomena began 20-30 years ago. If Chinese companies start making quality products and make smart business decisions in marketing, they would have little problem making a brand that would grow in China and then compete globally. Chinese executives have been bred with greed in their hearts and a spoiled relationship with Chinese banks who keep funding their unprofitable ventures. Keeping this system going will only breed the same results, a screwdriver industry for export.
     
  8. Daredevil

    Daredevil On Vacation! Administrator

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    China's inability to produce world recognizing brands can be pointed to 3 main things

    1) Lack of innovation and motivation to innovate (most time is spent on ripping off others products).
    2) Lack of management skills in private sector.
    3) Image of China as producer of low quality products.

    As long as they don't shed these abysmal qualities they will not produce world famous brands.
     
  9. Oracle

    Oracle New Member

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    Here are two brands from China:
    1. Gulsar (stopped production, after it was found out that it is a copy of Indian Pulsar)
    2. BlackCherry (in production)
     
  10. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    I'll tell you a story as to why it is one example of why India will surpass China at some point. I used to work as a contract negotiator in a Euro steel company. 3 months after I got there it was taken over by Indian managers. Now India runs the largest steel empire in the world. There are growing examples of successful expansion of Indian companies into the top markets. China has failed at this.
     
  11. badguy2000

    badguy2000 Respected Member Senior Member

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    I am very happy that soooo many indians happily buy the idea that "China has no brand name recognition !!! ",when Simens and Nokia are asskicked by Huawei all over the world.

    BTW, is India government still being afflicted by whether Huawei and ZTE should be banned?

    to MR. Armand, is French companie be afflicted by Chinese highspeed railway ?
     
    Last edited: May 25, 2010
  12. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    They are not asskicked by Hauwei all over the world. The vast majority of Huawei's business is located in China. As for the branding of the Huawei name... it isn't there.
     
  13. SHASH2K2

    SHASH2K2 New Member

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    HOW DARE YOU ALL.
    They have creativity and brand as well.
    they have blackcherry(cheap sister of blackberry)
    They have Gulsar (again cheap brother of Pulsar)
    and similarly many cheap brothers of Indian or other good international brands.
    so they have Brands but they are cheap ones .
    /////////kkkkkkkkkkkkkkkkkkkk
     
  14. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    Holy Hell
    Those are not what you call brands. Brands invoke loyalty.

    It is like people saying I only use Intel Processors, I don't like AMD.

    I would rather prefer Sony Ericcsson phones to Nokia.

    I like Honda. I hate American cars.

    I like Armani. I like Mc Donalds. I like Lee. I like Nike. These are brands that people can identify with.
    Brands encourage personal opinions about the products. Huaweii does not do any of those. It is just a business not a product. You don't like a company you like products it makes and that's brand value.

    In India, TATA Nano invokes that brand value. In Britain it is Jaguar and Rolls Royce. In the US it is Ford. In Italy it is Ferrari. In France it is clothes and fashion. in Japan it is the electronics. In Germany it is the Engineering hardware. Every country has something. China has still not yet shown that "something."
     
  15. amoy

    amoy Senior Member Senior Member

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    On the contrary it proves Chinese consumers have a good sense of brand recognition. Otherwise why so many try to make their brands confusing and misleading for fans? such as Samseng (Samsung), Pansonic (Panasonic), and Honde (Honda). Becoz people go after them.

    Really need to keep our eyes wide open in the bazaar!
     
  16. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    For real... China rips off everything.

     
    Last edited by a moderator: May 10, 2015
  17. badguy2000

    badguy2000 Respected Member Senior Member

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    well, 75% of Huawei's revenue comes from oversea sales.

    here is Huawei's 2009 yearly report and it is open.
    http://wenku.baidu.com/view/8e85830ef12d2af90242e679.html

    But I can understand why you have to understand China by accepting second-hand information from CNN-style medias and imagination ,instead of reading soo many open available first-hand information in cyber space,such as Huawei's yearly report.

    it is because you can not read Chinese ,so you are illiterated ,measued by Chinese-reading capacity.so, even Huawei's report are open and available there, you are still blind to it.
     
    Last edited: May 25, 2010
  18. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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  19. badguy2000

    badguy2000 Respected Member Senior Member

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    hahahahah, Huawei is a 100% private company..haha you word is another proof how you understand china by CNN-style report and imagination. all of Huwei shares are held by its employees and it doesn't want its shares to be held by its non-employees.

    all employees of Huawei can have right to own shares of Huawei as their bonus,after they have worked Huawei for enough long time.
    the oldest employees of Huawei are all millionaires at least,and some of them are even billionaires.
     
  20. badguy2000

    badguy2000 Respected Member Senior Member

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    besides, although Huawei is not a listed company, it releases its yearly report every year,endorsed by KPMG international.
     
  21. badguy2000

    badguy2000 Respected Member Senior Member

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    guy, cost performance is the king while "brand" is just the servant.

    all brands are based on cost porformance.

    "Brand" is accepted by People, just because people think "brand" itself is a guarantee of " good cost performance".

    however, once "brand" can not guarantee good cost performance , any "brand" would die and replaced with "better cost performance " product.

    "losing cost performance" is how those bankrupted "old brands" such as Nortel died and got replaced with Huawei.
     

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