From an era of blindly following and aspiring to Western brands, China is fast developing its homegrown international brands. And they will pose a much greater threat to the Western world than cheap products "made in China".
Despite horror stories about the quality and safety issues of products made in China, the truth is that they have improved a great deal in quality, while safety issues affect only a tiny percentage of total exports.
Chinese products offer superior value for money, displacing production jobs in developed nations. So it's understandable why this has become a trade issue of much debate.
However, a much bigger threat to foreign brands has received little attention: the rise of Chinese brands. When the country first opened up in 1979, branding was a foreign concept. Western brands created markets that never existed.
Chinese brands were synonymous with low quality and low price. They seemed to pose little competition to Western marketing-savvy brands. However, they learned quickly and began to occupy the lower market with low-cost products and vast distribution. They began to gain size and share.
Many Chinese companies have come and gone, but those that remain have financial strength and market presence. They are moving upmarket, and no longer making cheap copies of foreign brands: they are creating international products with "Chinese characteristics".
The new premium car, Roewe, launched by the Shanghai Automotive Industry Corporation, is a perfect example. SAIC owned two successful joint ventures in China: one with Volkswagen and one with General Motors.
In 2005, it bought the intellectual property rights of the Rover 75 and 25 models, and launched its own brand that combined British engineering expertise and Chinese engineering inventions. The launch was supported with sophisticated marketing and advertising, successfully building market share and brand image.
The number-one sports shoe and sportswear brand in China is Li Ning, not Nike or Adidas. Li Ning builds on Chinese philosophy and wisdom in product design. It projects the image of an international brand, using Chinese as well as international sports stars as endorsers.
China is still miserably missing from the list of top 100 global brands, but that will change soon. China recently took the Miss Universe title, and soon we could become the "Miss Universe" of global brands. President Hu advocates "Socialism with Chinese characteristics", so these will likely be "International brands with Chinese characteristics".
Let's see if the 2008 Olympics act as a catalyst for this change.
- Viveca Chan is the chairman of WE Worldwide Partners in Shanghai.