Comments on: Chinese Brands Are Coming

By: Paul Barsch

Paul Barsch — Tue, 27 Apr 2010 14:14:58 +0000

Ryan, For Western companies, complacency isn’t an option! Thank you for commenting.

By: Ryan Ding

Ryan Ding — Sun, 25 Apr 2010 06:53:10 +0000

Thanks, Paul. It’s very impressive to see such an article of Chinese brands and products. We are also working on this area, and try to bring our Chinese branded products into the global market. In fact, in China, there are so many unknown brands which have good quality and huge potential. I will try to dig them out and through our system, as a direct channel, to bring all these products into the global market.

By: Charles brooks

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By: Stanley

Stanley — Sun, 15 Nov 2009 17:34:02 +0000

China’s sports brands coming on fast

By: Andras Bodrog

Andras Bodrog — Mon, 07 Sep 2009 07:32:26 +0000

Love the article and strongly agree.
Check out our site that is tailored to the effect China is having on the world economy and in particular it’s explosion of brands.
Post, rate and discuss news for free.
http://chinaeffect.com

By: Paul Barsch

Paul Barsch — Sat, 11 Jul 2009 19:06:46 +0000

BK, thank you for commenting. China’s manufacturing prowess is unparalleled for durable hard goods (electronics, clothing etc). They are also coming on strongly (via IP gleaned from Joint Ventures) to auto and heavy machinery manufacturing. There was a time, maybe 30 years ago that Japan was in a similar stage, and now Toyota Motor is the largest car company in the world. We should definitely be on the lookout for Chinese brands!

By: b k mahapatro

b k mahapatro — Sat, 11 Jul 2009 17:44:00 +0000

Great postings reg Chinese brands of consumer products and the Western Concern. MAY I TAKE THE SUBJECT A LITTLE FORWARD!So far as Heavy Engineering Products(Capital Goods, Machinery, power plants etc) and Developing-World (markets) are concerned chinese companies appear to be quite stongly poised to take on. Obeservations in this regard are two: (1)technical capability for manufacturing is great(or should I say “threat”)vis-avis westeren /EU Suppliers. where they probably need to improve upon is in System Integration,( and/or packaging).
(2)work-discipline and industrial productivity is high. It, therefore, may not be surprising that they can efford to sell things ‘competitively.
Big country, great intellects, hence perception of Quality and Trust too has wide variance. this said,”chinese are comming” is a factor cannot be ignored any more.

By: gianandrea facchini

gianandrea facchini — Fri, 19 Jun 2009 06:59:12 +0000

Paul, well said! US needs to fix his brand in financial market as well as redesign the national debt…

By: Trevor Long

Trevor Long — Thu, 18 Jun 2009 11:32:41 +0000

For years we have been reading about China growing up in the business world. It’s exiting to see how their brands are climbing the value chain.

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led panel — Thu, 18 Jun 2009 10:24:19 +0000

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By: gianandrea facchini

gianandrea facchini — Thu, 18 Jun 2009 06:02:56 +0000

Dusan, I think that China is underdelivering for a significant amount of safety and health features. Then, as they produce for many global corporation, these corporations should be blamed too, because of lack of control.
And in a world that we hope to be more and more discerning about human rights, China has a long way to go to match a decent level of freedom.
Don’t you think that consumers will want to know how a product has been manufactured? The environment impact, how workers are treated, etc. these are all factors which will impact on consumers’choice.

By: Paul Barsch

Paul Barsch — Wed, 17 Jun 2009 19:38:32 +0000

Dusan, thanks for the nice words. I try to respond to each commenter because in my mind it takes a bit of bravery to leave a comment. Sometimes readers think they don’t have anything substantial to add, or don’t want to subject their opinion to critique. I’ll speak for myself in that I believe the conversation is mightily enhanced by the perspectives of others because of our countries of origin, experiences, and even genetic makeup. So, love these posts or hate ‘em, I really want to hear the perspectives of my fellow business executives. The conversation is richer because of your input!

By: Dusan Vrban

Dusan Vrban — Wed, 17 Jun 2009 18:19:03 +0000

@Gianandrea (and others): do you think it is about chinese bad products or western PR? I’m sure there’s a lot of bad products made in USA and EU as well. Why is it that there’s so much buzz about bad china products?
@Paul: Thxs for staying so loyal to us and commenting every thought. You’re great!

By: Paul Barsch

Paul Barsch — Wed, 17 Jun 2009 15:02:34 +0000

@ Laurel; Appreciate the cross link and that you had a few good comments on the topic on your blog!
@ Gianandrea; I believe you are correct in that China needs some brand repair in the next five years to fix quality perceptions. Maybe the United States can also use this same five year timeframe to fix our “brand” in the global financial markets?

By: Paul Barsch

Paul Barsch — Wed, 17 Jun 2009 14:50:01 +0000

Dusan, thank you for lending your considerable expertise to this post. You were right to point out that no matter which country, there will always be individuals who do the right thing and those that don’t. Scandal, lack of ethics and poor decision making is not confined within country boundaries.
I also enjoyed your comment on the need for Chinese companies to build HRM processes to tackle Western markets. I don’t want to paint all Chinese companies with a broad brush, but human capital management seems like an area where Chiense companies can extract much more value.
Final point; flush with cash, Chinese companies will be buying brands or investing in their own. I agree that it’s just a matter of time before they own 5-10 slots in the top 100 brands.

By: gianandrea facchini

gianandrea facchini — Wed, 17 Jun 2009 14:05:56 +0000

Paul, most if not all of us use tech product built in China and they work well. But mass audience perception is that China make low quality products or fake. And only Chinese are to blame for this. You mention food, dog food, toys. When this attitude disappear in 5 years, maybe, overall perception will significantly change in better.

By: Laurel Delaney

Laurel Delaney — Wed, 17 Jun 2009 13:52:19 +0000

Hi, Paul,
We cross-posted your contribution over at The Global Small Business Blog:
http://bit.ly/YcUBx
Thanks for letting me know about this.
Regards,
Laurel

By: Dusan Vrban

Dusan Vrban — Wed, 17 Jun 2009 06:33:25 +0000

Paul, this is really much more important then Twitter.
I was teaching chinese students for a semester. What I’ve learned in that amazing experience:
1. China is big. Bigger than USA and EU. We’re talking about such a variety of people and places, that it is amazing we even have 1 single name for them.
2. Since they’re so big, they have very bad and very extraordinary people and companies. Some produce bad toys and others produce the very best of whatever.
3. Since they present arround 20% of the world population, it will be weird if they don’t make it to the top 100 brands with at least 5.
Now to the questions:
* Chinese companies are moving up the value chain and building global brands. Should Western companies worry, or is this much ado about nothing?
Owners of some western companies should worry, since their business will most probably shrink one day. Companies as people must not worry, since some of them will get another job (working for chinese company most probably) and others will remain where they are?
* Brand experts, other than those listed above, what processes must Chinese brands adopt to fully compete in Western markets?
HRM processes mostly. Marketing strategies they can buy. But they need to work on their employees and organisational culture. If they want to work in west, they need to have people from west that are quite different (not better, just different). And they must learn how to give western people freedom while keeping their people in another form they’re used to.
* What global brands–perhaps on the decline–are fodder for Chinese purchase and invigoration? Which Western brands should be wary of Chinese brands?
Each and every one. Including small businesses like Kainoto. Or MarketingProfs.
Yet, I’ve liked some responses here – yes, China has to build on their reputation to get back customers. Many people in my area are heavily avoiding Chinese products. Actually looking at each item to check where it is produced.
And I think western PR won an important victory on short to middle term here.

By: Paul Barsch

Paul Barsch — Tue, 16 Jun 2009 18:35:34 +0000

@ Dr. Wright, you said, “American companies should always be aware of who is coming into their markets.” Easier said than done, right? Especially when US companies are fighting a nasty recession, the tendency is to look inward.
@ Fang, you are absolutely correct that for now, most Chinese consumers don’t know know what they’re missing in terms of product quality. However that will all change very soon as more Western brands enter Chinese markets. I will paraphrase James Fallows who said, “Chinese will soon no longer be happy with crappy.” Consumer expectations will certainly rise.
There is much opportunity for improvement for Chinese companies and brands. I have a feeling though that when they get it mostly right, “look out”!

By: Paul Barsch

Paul Barsch — Tue, 16 Jun 2009 18:07:31 +0000

Gianandrea, you said, “In the Western world, Chinese means cheap, right or wrong but this is it.” This may be a current perception for some, but I’ll disagree to an extent.
From my extensive research I have seen Chinese companies steadily climb up the ladder in product quality. In fact, for some very technical products (such as electronics) that must be mass produced with quality, China is one of the few countries with such capability.
I also won’t disagree that in an effort to keep their factories humming, some Chinese companies have strayed from their core competencies and jumped into other markets that have little or nothing to do with their strengths. This strategy tends to produce sub-optimal products. That said, Chinese companies are starting to realize that if they want to be the “best” at X, Y or Z, they’ll need to focus on their core and innovate.
This is my take; give them 5 years or so, I think you’ll see a drastic turn around in overall perceptions regarding Chinese product quality.

By: Paul Barsch

Paul Barsch — Tue, 16 Jun 2009 17:51:16 +0000

Camille, I loved all your points, but I’d like to drill into one in particular. You said, “With more competitors, the marketplace is more dynamic. Monitoring the global environment is critical because new competitors can come from anywhere.”
As markets are more tightly woven together through globalization processes, and of course, the more people get out and travel, I think you’ll see an increase in demand for products that could once only be found in home markets. Case in point, as emerging economies grow and middle classes gain more disposable income, one logical outcome is a growth in tourism. So tourists will be exposed to new brands and perhaps clamor for those brands once they get back home.
In addition, you’ll have expatriates like Jeff Machado (see above) who get exposed to in-country brands and become brand loyal. If and when they return to their country of origin, they may ask, “why can I not have the brand I like in my home market”?
So indeed as travel restrictions fall and tourism becomes more pronounced, your statement, “new competitors can come from anywhere” becomes more true each day.
Thank you for commenting!

By: Paul Barsch

Paul Barsch — Tue, 16 Jun 2009 17:37:38 +0000

Jeff, thank you for commenting. From my reading, I have seen that major US softdrink manufacturers see a majority of growth outside of soda sales. Fruit juices, bottled water, tea drinks, vitamin enhanced drinks etc are gaining market share. This is a roundabout way of saying that your wish to see WangLaoJi – or some derivative thereof in US markets, may be closer than you think!

By: Paul Barsch

Paul Barsch — Tue, 16 Jun 2009 17:25:33 +0000

Claire, you bring up some excellent points. Let me tackle just a few.
First, perception of quality issues will be important for Chinese brands to minimize. Press articles over the past 1-2 years haven’t helped. That said, there was a time when products made in Japan weren’t all that terrific in quality -many moons ago– and now those quality issues are almost non-existent.
I also liked your point about Chinese companies hiring marketing executives with branding, advertising, packaging etc expertise. There will be many opportunities for marketing executives to help Chinese brands gain market share.
In some respects, the next skill set marketers may need to adopt is the need to speak Mandarin!

By: Paul Barsch

Paul Barsch — Tue, 16 Jun 2009 17:14:04 +0000

Lewis, thank you for taking the time to post a comment.
Product safety is definitely an issue of primary concern for products coming from China, and as I recall, the issues came from things as various as toys, dog food and toothpaste to medications. That said, it is also my recollection that a fair percentage of these products were branded by Western companies which puts the ultimate onus for product safety on these already established brands.
I also love your quote, “American brands need to step up to the plate and compete in every area–price, value, and quality.” Absolutely concur.

By: Fang Fang

Fang Fang — Tue, 16 Jun 2009 16:38:47 +0000

Great post. In fact, many Chinese friends and I were always talking about this issue. Why China has so few good brands. We are proud of Haier. I have even bought one small fridge in my office. However, should Haier differentiate itself in the market of small appliances or go bigger?
There are so many brands with huge potential. However, admittedly, the business operation and quality control needs to improve dramatically before any of those brands can survive global market. — Western market is much more picky about quality comparing to our domestic consumers. The regulations and law enforcement are much harder to bypass. — Those are all much more serious than a Chinese company could imagine, letting along the existing negative imagine widely propagated by the western media.
But thinking another way, what happened in China in the recent 20 years has been so fast and so beyond any Chinese’s imagination, it might still be possible that we can see more and more Chinese brands here some day some where. The question is when and where. I am waiting.

By: Fang Fang

Fang Fang — Tue, 16 Jun 2009 16:38:44 +0000

By: Dr Letitia Wright

Dr Letitia Wright — Tue, 16 Jun 2009 16:27:07 +0000

American companies should always be aware of who is coming into their markets. As things grow and change, we have to keep up. If not we become a company that has no relevance in today’s market.
Dr. Wright
Wright Place TV Show
http://www.wrightplacetv.com

By: gianandrea facchini

gianandrea facchini — Tue, 16 Jun 2009 16:08:23 +0000

I think that Chinese companies should start to worry about the very low appreciation about their attitude towards environment, civil and animal rights. Yes, in a connected world, these will be the tougher obstacles for Cinese companies, along with poor safety standard. In the Western world, chinese means cheap, right or wrong but this is it.

By: Camille Schuster

Camille Schuster — Tue, 16 Jun 2009 15:19:05 +0000

Just as not all companies in the US operate the same way, so not all Chinese companies operate the same way. Yes, there have been problems with product quality from some Chinese companies. But that does not mean quality is a problem at all Chinese companies.
Consider that the Chinese government has been spending a good deal of money sending Chinese businesspeople and government officials to the US, Canada, and Europe to learn how to do business in the West. Each group spends several months in the US. In addition, many Western companies have been doing business in China for 30 years.
The US is an attractive market because of the size of our consumer market. US companies need to compete with world class companies having world class products from wherever they come. Certainly US companies have had to learn to compete with products from Japanese, South Korean, and Taiwanese companies. Newer competitors are from India and China.
With more competitors, the marketplace is more dynamic. Monitoring the global environment is critical because new competitors can come from anywhere.

By: Jeff Machado | Internet Marketing Virtual Assistant

Jeff Machado | Internet Marketing Virtual Assistant — Tue, 16 Jun 2009 15:10:10 +0000

I actually lived in China for 10 months and have a few Chinese brands that I would love to see in the USA, especially a beverage called WangLaoJi which is an herbal tea beverage.
In fact, I would love to see the tea brands in China have a larger presence in the US market. I’m a big proponent of decreasing soda intake and all the iced tea companies they have over there would be perfect for the US market to help Americans transition out of soda.
I don’t think American businesses should worry too much if the Chinese companies look at what demands are not being met in the American market.