China has no brand name recognition

[Armand2REP]

There are 6 major telecom equipments manufacturer in the world, and Huawei is one of them,and more importantly, Huawei ranks the second. And you denied Huawei is a wrold famous brand. I guess you will still deny that if Huawei becomes the first.

China has the biggest bank in the world, no common depositor outside China knows what it is. SAIC Motor Corp is one of the top automakers, but average consumers outside China have never heard of it. Its only stint to expand globally ended in disaster in Korea. Huawei is just another of these Chinese giants that the average guy on the street has no idea what it is. Only the few thousand people that pick up a Fortune 500 copy knows what. You do not have a brand until consumers recognize your name. This is when you can command higher prices, something that Huawei cannot get as they underbid by 40%.

 

[nitesh]

This is when you can command higher prices, something that Huawei cannot get as they underbid by 40%.

No armand this is way more then 40% If I remember correctly Huawei bid was 5$ per port as compared to others hovering around 70$ for a GSM contract (country name Nepal I may be wrong here)

 

[Armand2REP]

No armand this is way more then 40% If I remember correctly Huawei bid was 5$ per port as compared to others hovering around 70$ for a GSM contract (country name Nepal I may be wrong here)

I don't know about Nepal, I do know what they underbid in the EU and that was 40%. Whether the underbid is 40 or 80%, there is no room for profit in the venture. Huawei is an untraded company for a reason, it leaves lack of transparency that they are hiding accounting and records they do not want to disclose. If one delved into the records, you will find a strong link to the PLA in research funding and perhaps even espionage related activities.

 

[Daredevil]

Is Huawei is listed in any of the stock exchanges???. I couldn't find any information on it. If it is not listed means the company is held by few rich guys/institutions which essentially makes the allegations true that it is close to PLA. I'm awaiting answer from our Chinese posters.

 

[badguy2000]

Is Huawei is listed in any of the stock exchanges???. I couldn't find any information on it. If it is not listed means the company is held by few rich guys/institutions which essentially makes the allegations true that it is close to PLA. I'm awaiting answer from our Chinese posters.

Huawei is a employee-owned companies. its shares all are held by its employees. Huawei provides unqie promissory shares to its employees.

However, Huawei publishs its yearly report every years and its yearly reports are endorsed by KPMG international .

here is the yearly report 2009 of Huawei. you can google or baidu it easily.

http://wenku.baidu.com/view/8e85830ef12d2af90242e679.html

 

[Armand2REP]

KPMG... That is like Exponet auditing Toyota for break defects.

Face it guy, you have a company operating in the shadows that has a very big secret to hide. Even ZTE is publicly traded. Huawei is hiding the fact it works for the PLA and is funded by it.

 

[Phenom]

Don't forget Infosys and Wipro, ask any techie from around the world and they would tell you what these companies are. They are not as famous as MS or Oracle, so the common people of other countries wouldn't know them, but people in the IT field would.

 

[p2prada]

Before i decided to reply to this, i didn't plan to defend Huawei any more, because i have done that enough times. But after seeing so many Indians bragged about TATA and belittled Huawei, i said to to myself, why not?

There are 6 major telecom equipments manufacturer in the world, and Huawei is one of them,and more importantly, Huawei ranks the second. And you denied Huawei is a wrold famous brand. I guess you will still deny that if Huawei becomes the first.

Ok then. I will give it to you. Huawei is the best technology company you have. And then.

You are the second largest economy in the world. What else do you have? Come on it cannot stop just there.

Huawei's work has major military inclinations. In a few years India may also reject the European and US systems and go for a whole new indigenous telecommunication system. If you haven't noticed Europe, US and Soviet union have telecommunication systems that vastly differs from each other. This is because neither of them want their systems compromised if they were at war. Because of China's economic capabilities you are able to deliver a new system and also begin work on a 4G system because of the threat of the US compromising and disabling your entire telecom system in just a few days. To prevent that from happening you have to develop your own system instead of buying from outside.

Right now India is at the threat of having its entire civilian communication system being nullified by the US. It cannot be undone by tomorrow. It will require massive funding to the telecom companies by the govt or the military to create a whole new network. And that is what China did with Huawei. If it wasn't for that requirement even Huawei wouldn't have existed as a big entity. It would have been doing back office work for European companies. Why else do you think Huawei is not trusted here? It is a major risk and their only presence in India is down south where China is not a threat.

At the same time US is not a threat to us, so we can use US or even European systems as of now.

When it comes to high-tech sectors, it all depends on the technology. Of course innovation is also important, but technology is the foundation. It is the technology accumulation that gives the birth to Apple, not just innovation. Products like Apple can never be born in China or India, if the two stay where it is in the term of technology. And the accumulation of technology is time-consuming.

Wrong. Products like Apple can be done here. Both our countries have the money to do it. The difference is you don't have a private sector while we do. Neither govt will start a company to challenge Apple or Microsoft. It has to be the private companies.

This was done by a young Indian student in MIT. Check the video and see for yourself what is the meaning of innovation.

http://www.youtube.com/watch?v=mUdDhWfpqxg

It just takes a bright spark to to it. Innovation isn't just for the rich.

It all depends on technology and it comes through innovation or by spending big money. TATA did both. They created the Nano as a home made product and bought Jaguar and Land Rover at the same time. If you cannot innovate then you can buy. They built a brand name doing both.

Microsoft could be founded in USA because American owned the most computers in the world at that time. When Bill Gate set up Microsoft, what were most Chinese and Indians doing? Operating a computer? Most of our families could not even afford a TV set. Do you expect Chinese or Indians to use their magic innovation to build a company like Microsoft at that time?

Silly reason. It did not prevent both our countries coming up with 2 different worlds. One belonging to the rich and one belonging to the poor. It is not your problem, it is your govt's problem to make your people richer. But, why is this stopping the rich people in your country from innovating? Don't tell me they will not do it until everybody in your country becomes rich.

BTW, inventing a car like NANO can not be called innovation.

Really then. Why is it the cheapest car in the world? More importantly, why are all other competitors who want to make the cheapest car can quote a price that is only higher than the Nano. Even the cheaper more cost effective China is not able to deliver a car at the same price.

Did you know that even after creating cars like Ferrari Enzo, Mclaren F1, the F1 cars, Nano is still the most discussed car in the world. It is considered the greatest achievement in automobile history since Ford's T car.

 

[p2prada]

Don't forget Infosys and Wipro, ask any techie from around the world and they would tell you what these companies are. They are not as famous as MS or Oracle, so the common people of other countries wouldn't know them, but people in the IT field would.

Boll*cks. Infosys and Wipro suck. They do nothing but back end jobs for bigger companies. A bunch of overhyped f*ked up companies. Infosys is the worst when it comes to employee relations. They treat employees like donkeys with periodic evaluations and homework and stuff. Nobody in these companies are happy. I have seen it.

 

[Daredevil]

Huawei is a employee-owned companies. its shares all are held by its employees. Huawei provides unqie promissory shares to its employees.

However, Huawei publishs its yearly report every years and its yearly reports are endorsed by KPMG international .

here is the yearly report 2009 of Huawei. you can google or baidu it easily.

http://wenku.baidu.com/view/8e85830ef12d2af90242e679.html

Then my suspicion is true. It has very strong military connections to PLA and that is one of the reason India banned Huawei from further telecom infrastructure deals.

 

[thakur_ritesh]

Creation of brands was never really a forte of the Asians, and especially for economies which mostly consist of the far east which can at best be dubbed as suppliers to the international brands, and when you are a supplier then one wants to curtail as much costs and creation of a brand name does not really help so why waste the money on creating a brand which makes your product uncompetitive .

The need is not really there and even today the need is not felt much and so one hardly ever comes across any recognizable brands coming out of china. Along with that DD raised two very important points as to why there are no strong brands coming out of china:

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.

To that I want to add another very important reason and that of the CCP, which even today remains largely suspicious of its own people and they because of this suspicion do not let the private sector prop up in china and till the time that is not allowed they wont be able to create the wealth of brands, all that one will hear of are the government owned companies and of certain private companies which have either proprietors or the board members as CCP workers.

On the contrary, though I did not want to make this post a "this versus that", but it gets important to highlight India where private sector has been given full freedom to prosper which has led to huge brand creation in almost every industry one comes across which remains largely independent of the PSUs. Take any sector and you will have some very well performing Indian brands though majority of them have not scaled the heights of international market but then they are not even far from it either. Be it the telecom sector, or the banking sector, or the airlines, or the auto sector or the fmcg sector, or the fmcd/cd sector or the IT sector, so on and so forth there is a strong presence every where and the path I see most of them taking to move international is by way of acquisitions and by 2020, the time by when IMF indicates India presenting more MNCs than china, the Indian companies would have exploded internationally the credit of which I give to the vision these people have and which is to be amongst the top 3 to 5 internationally and surprisingly that is a zeal found in most of these companies, and they will do that for they have faced an extremely stiff competition back home so experienced gained will play a huge role and then with Indian brands you will get cost/price benefit with quality.

This comparison between India and china gets inevitable because if we were to take the size of chinese economy if their exchange rate was to adjusted to actual market rates then their present day economy would be around 6.5-7trillion usd, and now compare it to an economy which is a mere 1.2-1.4t usd, and look at the way the brands from these two countries have performed and now imagine a huge surge India and our brands would have seen by the time we become a 7t usd economy.

Chinese if anything have wasted the opportunity atleast on one given front and wasted it one big time.

PS:- I really haven't had the time to go through the previous posts nor the introductory post which started this debate, so no clues what direction this discussion has taken. Wanted to reply to the header of this thread so woke up early, otherwise running very short on time.

 

[amoy]

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.

I agree MOST of Chinese brands are only well known inside China but not world-wide recognized.

But further to Dare's summary above (frankly I disagree with some of them to some degree), I'd add one more observation --

Actually many of well-known manufacturers like Midea (best known for Air-con) and Galanz (biggest in the world of microwave ovens) are doing OEM or ODM for big names like Electrolux, Whirlpool or Daikin or Trane or York... galore... When asked why not market their own brands like they do in China so that they gain more recognition and long-term loyalty at a premium, Midea / Galanz would say foreign consumers only recognize and are willing pay more for those well-established brands for a LONG LONG time with a 'proven' track record even though many of them have stopped manufacturing or 'innovaiton' such as Electrolux (at least in Aircon). But it's a long way to go to change consumers' perception or behavioral pattern.

Of course those great brands have made tremendous efforts / promotion, to build up consumer stickiness , trust, credibility and sales network/channels which most Chinese brands lack overseas this moment. That could probably be one of reasons Chinese brands seem invisible in the world market while leaving the lion's share of profit with those big names at the front end of marketing (Nike, Adidas, Footjoy, or Armani or Springer...).

That sounds rather similar to Japan or Taiwan Or S Korea at their very early stage of industrializaiton as a 'sweatshop'.

As for 'motivation' for innovation or management skills in private sector - - not really hitting the core of the problem.

 

[badguy2000]

Well u have point just an example, little old but handy:

http://indiatoday.intoday.in/site/Story/4602/NATION/Small+is+the+new+big.html

cost performance is the king. he rejected CHina-made ,just because he insisted that china-made have a poorer cost performance here.

 

[nitesh]

cost performance is the king. he rejected CHina-made ,just because he insisted that china-made have a poorer cost performance here.

Well the point is proven what was raised by the poster low cost defeated by high quality

 

[Energon]

A very interesting topic and some really great posts, particularly TR and Nimo_cn. Here are a few points I'd like to put out there...

1. China has so far created its presence in most industries either as suppliers of generic components or as the low cost manufacturing base. In fact they have done the job so well that they are suppliers to most world renowned vendors whose products they manufacture at low cost. This automatically puts potential Chinese competitors at a disadvantage. It is always a dicey endeavor to bite the hand that feeds you; by default all of their competitors are unionized, all one has to do is make issue of the inherent fallacies in the Chinese system or point out to the dangers of giving unfettered access to the Chinese in order to stunt the product's success and risk the already successful business model as suppliers and manufacturers.

2. Funnily enough I find the "going out strategy" to be paradoxical in many ways. A vast portion of China's industrial capacity is geared for export which then requires companies to orient themselves to market strategies and consumer preferences that are entirely alien; this is never easy, and often disastrous, as elucidated in the Murray lawnmower example. The Germans and Japanese and later on the Koreans may too have geared their industry toward export, but they also catered to highly critical domestic consumers which helped shape the high standards that eventually made their brands behemoths. So while it may be true that "going out may be the secret to staying alive at home" it also begs the question why lenovos in China still cost almost 2 to 6 times as much.

3. The constant governmental interference is most probably an issue too. I'm not saying this simply out of allegiance to the American ethos, but seriously, its ridiculous that a government has to micromanage the inculcation of free thought, creativity and entrepreneurship through their established social engineering practices when they are also busy doing exactly the opposite. This by default assures that there's no free thinking of any sort.

In the long run though my money is still on China. This is primarily because:
1. China has successfully set off an industrial revolution. Building up competency in mass scale industrial production which more so than not assures success in the market place in the long term. It is also a phenomenal achievement that requires a lot of time and effective resource management.
2. As obstructive as the CCP's constant interference may be, it is clear that the CCP itself is an incredibly effective organization, and no, not simply because they do not have to contend with democracy.
3. China's industrial skill sets are pretty diverse and highly impressive. This notion that China makes nothing but low quality cheap goods is patently false. China can produce pretty much anything on the quality scale based on the allotted capital, so this includes everything from arsenic laden plastic pediatric death traps to sophisticated communication and other high tech hardware.

As long as the industrial capacity keeps growing China will remain on the path of success.

 

[badguy2000]

Well the point is proven what was raised by the poster low cost defeated by high quality

it is example how low cost performance is defeated high cost performance.

high quality can not assure high cost performance always.

another such example is how "Iridiumsatellite sysem" bankrupted.

"Iridiumsatellite system" could provide much better serice than "GPS". however due to much high price, "Iridiumsatellite system" was asskicked by "GPS" and bankrupted.

 

[Daredevil]

I agree MOST of Chinese brands are only well known inside China but not world-wide recognized.

Actually many of well-known manufacturers like Midea (best known for Air-con) and Galanz (biggest in the world of microwave ovens) are doing OEM or ODM for big names like Electrolux, Whirlpool or Daikin or Trane or York... galore... When asked why not market their own brands like they do in China so that they gain more recognition and long-term loyalty at a premium, Midea / Galanz would say foreign consumers only recognize and are willing pay more for those well-established brands for a LONG LONG time with a 'proven' track record even though many of them have stopped manufacturing or 'innovaiton' such as Electrolux (at least in Aircon). But it's a long way to go to change consumers' perception or behavioral pattern.

Midea/Galanz may be the largest manufacturers of electrical goods but they are manufacturing for branded names like Electrolux, Whirlpool etc but the designs for such products are supplied by these companies not Midea/Galanz who are mere contractors for manufacturing the goods nothing else. A brand in electrical goods is created because of quality, novelty, durability and after sales support these companies provide. When Midea/Galanz reach that stage they can have their own brand and can sustain them not by just being back end manufacturers.

Of course those great brands have made tremendous efforts / promotion, to build up consumer stickiness , trust, credibility and sales network/channels which most Chinese brands lack overseas this moment. That could probably be one of reasons Chinese brands seem invisible in the world market while leaving the lion's share of profit with those big names at the front end of marketing (Nike, Adidas, Footjoy, or Armani or Springer...).

Again its the same point. China needs to create brands instead of manufacturing for others which is also not bad as it brings in jobs and economic sustainability.

That sounds rather similar to Japan or Taiwan Or S Korea at their very early stage of industrializaiton as a 'sweatshop'.

As for 'motivation' for innovation or management skills in private sector - - not really hitting the core of the problem.

China is no longer in the early stages of industrialization. Japan/Taiwan/S. Korea have created world famous brands decades ago and China is yet to catch up with them and the reason for this not happening in China can be laid down at the door step of CCP and its policies of curtailing free thinking and seamless information flow.

Motivation for innovation and management skills in private sector are important because they increase competency, efficiency to sustain in the world of cut-throat competition form others. All boils down to perform or perish.

 

[nitesh]

it is example how low cost performance is defeated high cost performance.

high quality can not assure high cost performance always.

another such example is how "Iridiumsatellite sysem" bankrupted.

"Iridiumsatellite system" could provide much better serice than "GPS". however due to much high price, "Iridiumsatellite system" was asskicked by "GPS" and bankrupted.

Blah blah blah what my example proves it the point raised by the poster India works for quality which is basis of brand building whereas Chinese are just low cost soft toys

 

[Armand2REP]

it is example how low cost performance is defeated high cost performance.

high quality can not assure high cost performance always.

another such example is how "Iridiumsatellite sysem" bankrupted.

"Iridiumsatellite system" could provide much better serice than "GPS". however due to much high price, "Iridiumsatellite system" was asskicked by "GPS" and bankrupted.

Guy, Iridium satellite was never a competitor for GPS. It is a satellite provider for data and voice.

 

[badguy2000]

Guy, Iridium satellite was never a competitor for GPS. It is a satellite provider for data and voice.

Iridium satellite is a competitor of GPS, it not only provides data and voice ,but also provide satellite navigation like GPS. it is asskicked by GPS ,just because it had a poorer cost performance.

case is that most advanced products are not best products for consumers. Instead, best cost performance products are the best products for consumers.