Brand creation, creating global Chinese brands, has been the official policy of the Communist Party Central Committee of China since 2004. The Ministry of Commerce launched China’s Brands Promotion Committee in a ceremony in Beijing on June 11 of that year. The goal of the committee was to help companies build internationally valued brands.
Global Chinese Brands Seen as Path to Prosperity
China has become the world’s factory. But making things cheaply cannot support the country’s economy in the long term. Already, manufacturing is moving out of China to countries that can supply even cheaper labor. Premier Wen Jiabao put more pressure on companies to create global Chinese brands this year, asking them to innovate and make “brand-name export products.” Chinese leaders know that the real money isn’t in the making of things, but in the making of brands.
Yet years of exhortations from leaders have not created successful global Chinese brands. Lenovo, China’s best-known brand, does not dent the top ten computer marketers in the U.S. market and continues to lose money. No other brands (other than Western brands acquired by Chinese companies) have made it in this market.
I have spent time traveling to China talking to Chinese business leaders about branding. It has become evident to me that they really didn’t understand what a brand is or how it works, much less how to create one.
Branding Requires Thinking and Acting in Ways Foreign to Chinese Culture
Creating a brand begins with understanding what the customer wants. Such an approach has had no place in the state-run enterprises that have dominated the Chinese business landscape for decades. For hard-scrabble new entrepreneurs, the idea of starting with customer wants is just as foreign. Walk into most Chinese stores and you’ll be bombarded with sales messages: “Pearls, ma’am. Very cheap. We have silks. We have jade. Cheap price for you.” And so it continues. I have never walked into a store in China and been asked, “May I help you? What are you looking for?”
In speaking at conferences, to a university marketing class, and with start-up branding agencies, brand is understood to be merely a name and logo. Market research and strategy development are not part of the mix. The idea that a brand has to communicate a compelling and relevant story was not known. Indeed, Chinese marketers are frustrated that Chinese names and logos don’t command a market premium like Western brands do—they somehow lacked that magic.
China Makes the Shoes, but Nike Makes the Profit
You cannot create a brand if you do all the shouting, and never ask a question or listen for an answer. Chinese marketers cannot create winning brands until they take that first step. The real money is in the brand, not the product. China might make most of the world’s Nikes, but Americans make most of Nike’s profits.