Why China failed in creating own brands

Discussion in 'China' started by abhi_the _gr8_maratha, May 12, 2014.

  1. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
    Why not indeed. Something happened
    that had not been predicted by the
    economists and analysts. It wasn’t the
    western markets that were dominated
    by Chinese brands. It was the Chinese
    market that became dominated by
    foreign brands.
    Ten years ago, Chinese brands
    controlled 70% of the local market.
    Now they have been reduced to 45%. If
    you exclude the barebones pickup
    trucks and minivans that make up the
    light commercial vehicle market,
    domestic brands have only 29.5% of
    the market.
    Even in a globalized world, it is
    distressing to watch foreigners come
    to dominate a local markets. This is
    especially, true for an important
    industrial segment like automobile
    manufacturing. Even in the US, where
    the Japanese cars have been present
    for 40 years, there are places where it
    is considered unpatriotic to own one.
    Why have the Chinese failed to build
    successful brands even in their home
    market? Obviously, they have not
    been able to match the quality of
    developed countries’ manufacturers.
    Until recently, they were very
    competitive on price. Why can’t they
    seem to develop successful brands?
    The reason for the failure is the way
    the Chinese government use their
    legal and regulatory system. Foreign
    companies coming to China to produce
    products for export were lightly
    regulated in every way. China wanted
    to encourage exports and follow the
    Japanese model. In contrast, foreign
    companies that wanted to sell into
    China faced discrimination.
    In theory, this sort of protectionism
    should have worked, but instead it
    backfired. The first problem for local
    brands was a lack of trust. For
    example, large Chinese dairies were
    only subject to minimal safety
    regulations. They took advantage of
    this by lacing infant formula with
    melamine a byproduct of coal.
    Melamine was put into the formula to
    allow substandard milk to pass protein
    tests. The result was a national
    scandal in 2008. Six children died and
    over 300,000 were sickened.
    To this day, Chinese consumers go to
    great lengths to buy foreign brands.
    They even ask their friends traveling
    to other countries to send back infant
    formula a few cases at a time.
    Rather than force local dairies, many
    of them government owned, to adhere
    to stricter standards, the Chinese
    government used laws, policy and
    even the state media to strike back at
    foreign brands.
    The state television has accused
    Danone, the French food company, of
    bribing hospitals in Tianjin to use its
    infant formula. It restricts importation
    of foreign infant formula created for
    other markets imported by third
    parties into China. To help local dairies
    it has created subsidies.
    The auto industry has similar
    problems. Domestic Chinese auto
    companies didn’t do well in crash tests.
    In surveys, local brands get criticized
    for poor quality and engineering.
    Foreign companies are required to form
    50-50 partnerships with local firms.
    The Chinese were thinking of dropping
    this requirement. Trading partners
    might retaliate if China were ever to
    start exporting cars in large numbers.
    But since they don’t, the largest
    politically connected; state owned
    Chinese companies were able to keep
    the restriction in force. With this type
    of protectionism in place, it is even
    more unlikely that China will be able
    to develop export markets.
    The Chinese required foreign
    companies to produce “indigenous”
    brands. For example BMW Brilliance
    makes the local Zinoro. Dongfeng
    Nissan builds the Venucia. The most
    successful is the SAIC-GM-Wuling
    Automobile Company’s Baojun. They
    sold 100,000 Baojins in 2013 up 20%.
    This would be great except that
    Baojun’s achievement came at the
    expense of local Chinese brands.
    China has also inhibited foreign
    competition by failing to enforce
    intellectual property laws. Stealing
    intellectual property in China is done
    on a massive scale including wide
    spread computer hacking to steal
    information.
    Stealing from foreigners may seem like
    a good idea in the short term. But if
    Chinese companies can steal from
    western companies they can also steal
    from each other. A brand is one of the
    most important and valuable assets of
    any company. If it cannot be protected,
    then companies do not have an
    incentive to build it up.
    Consumers in India, Indonesia and the
    Philippines do not have the
    overwhelming preference for foreign
    brands. Indonesia and the Philippines
    actually have a clear preference for
    local brands. India gives the foreign
    brands a slight edge.
    What is interesting is that although
    their preferences are slightly different,
    the views of local and foreign brands
    in these three countries are quite
    similar. Foreign brands are considered
    to be more fashionable and of better
    quality. Local brands are believed to
    offer a better price. There is a
    universal preference to support local
    companies. As to reliability, consumers
    in all countries rated both local and
    foreign brands about equally.
    It’s not that Chinese companies cannot
    compete with foreigners. Jin Duo Bao is
    a cold herbal tea that outsells Coca-
    Cola in China even though it is more
    expensive. It sells well because it is
    appeals to local beliefs and
    preferences.
    Rather than attempt to regulate the
    market, the Chinese should take a
    lesson from the Indian processed foods
    market. The local companies view their
    competitors as positive. With large
    advertising budgets foreign firms have
    been able to increase the size of the
    market and create new market
    segments that nimble local companies
    with better distribution and local
    knowledge can exploit.
    Every policy, every law, every
    regulation created by governments to
    solve a problem will have unintended
    consequences. These are sometimes
    worse than the issue that was meant
    to be solved. Sometimes the best use
    of power is not to use it at all.
     
    TrueSpirit1 likes this.
  2.  
  3. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
  4. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
  5. rock127

    rock127 Maulana Rockullah Senior Member

    Joined:
    Aug 12, 2009
    Messages:
    8,935
    Likes Received:
    10,277
    Location:
    India
    TrueSpirit1 likes this.
  6. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
    .
    .
    bro, I have a retard mobile (rex 60 of samsung ) and I can only type 1024 letters
    .
    so copy paste is more convenient
    .
    and few can't read it so gave the link
     
    TrueSpirit1 likes this.
  7. s002wjh

    s002wjh Senior Member Senior Member

    Joined:
    Jul 9, 2009
    Messages:
    1,209
    Likes Received:
    126
    How many American can name an Indian brand? It's sample both china and India are still developing coutry
     
    Illusive and Singh like this.
  8. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
  9. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
    many like hinduja, mittal have famous brand in uk
     
  10. s002wjh

    s002wjh Senior Member Senior Member

    Joined:
    Jul 9, 2009
    Messages:
    1,209
    Likes Received:
    126
    Last edited by a moderator: May 10, 2015
  11. s002wjh

    s002wjh Senior Member Senior Member

    Joined:
    Jul 9, 2009
    Messages:
    1,209
    Likes Received:
    126
    really i live in the state, so does family friends, co-worker etc etc, i haven't heard it nor does the people i know, but i do see heirer, lenovo etc in sams club, also chinese brand clothing, sport gadget in dicksportingood, cabela etc. most american don't know many chinese brand, much less with india brand. until both country in a status of developed country, there won't be any quality brand that can be recognize by everyone such as apple, intel etc.
     
  12. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
    Last edited by a moderator: May 10, 2015
    TrueSpirit1 likes this.
  13. Singh

    Singh Phat Cat Administrator

    Joined:
    Feb 23, 2009
    Messages:
    20,305
    Likes Received:
    8,270
    Location:
    011
  14. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
    Ashok Leyland
    Hinduja Foundries Ltd
    Hinduja Bank (Switzerland) Ltd
    IndusInd Bank
    Hinduja Leyland Finance Ltd
    Hinduja Global Solutions Ltd
    Hinduja Ventures Ltd
    Gulf Oil Corporation Ltd
    Gulf Oil Middle East Ltd
    Hinduja National Power Corporation
    Ltd
    IndusInd Media and
    Communications Ltd
    IDL Specialty Chemicals Ltd
    Hinduja Realty Ventures Ltd
    Ashok Leyland Wind Energy Ltd
    Defiance Technologies Ltd
    Hinduja Group India Limited
    P D Hinduja National Hospital and
    Medical Research Centre
    Hinduja Healthcare Ltd
    KPB Hinduja College of Commerce
    Houghton International
    Albonair GmbH, Germany
     
  15. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
    and I know mittal is not indian but he have indian blood
     
  16. Singh

    Singh Phat Cat Administrator

    Joined:
    Feb 23, 2009
    Messages:
    20,305
    Likes Received:
    8,270
    Location:
    011
    Yeah none of these "brands" are popular in the UK as @@s002wjh had argued.

    [video]www.youtube.com/watch?v=Ln5QgeCL1fs[/video]
     
  17. s002wjh

    s002wjh Senior Member Senior Member

    Joined:
    Jul 9, 2009
    Messages:
    1,209
    Likes Received:
    126
    Last edited by a moderator: May 10, 2015
  18. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
    Last edited by a moderator: May 10, 2015
  19. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
    in india walmart has been downplaced by bigbazaar ,reliance etc malls
    .
    .
    apple is foreign brand for china .
    .
    .
    wipro, infosys etc. Are brands in IT sector
     
  20. Singh

    Singh Phat Cat Administrator

    Joined:
    Feb 23, 2009
    Messages:
    20,305
    Likes Received:
    8,270
    Location:
    011
    @abhi_the _gr8_maratha

    Saar,

    Nobody has heard of Hinduja owned brands in UK.
    Wipro,Infosys are actually quite shitty brands @LurkerBaba is a better guy to respond here.
     
    Last edited by a moderator: May 10, 2015
    PredictablyMalicious likes this.
  21. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

    Joined:
    Apr 15, 2014
    Messages:
    2,194
    Likes Received:
    598
    Location:
    aurangabad
    may be I put wrong point ok
    .
    but actually its not india who says to surpass america and make great comments on economy like china do which later found out to be hollow
    .

    .

    that's the point , china calls itself economic hub of asia though they have not even single brand
    .
    and chinese are way backward in innovation than japanese or korean firms even indian firms have better research for eg tata,bajaj etc.
     
    Last edited by a moderator: May 10, 2015

Share This Page