The term “Made in China” has been considered by many to be a liability to brands, and certainly the 2007 Interbrand survey of 569 marketing & business professionals confirmed this. It found that 69% of respondents said “made in China” damages a brand.
However, some Chinese manufacturers are breaking this image and appear to have a legitimate shot at the international marketplace. The problem is that most have had to play down their Chinese origins and hence their success isn’t likely to make it any easier for other Chinese manufacturers to shed the “made in China” liability.
Lenovo
Their Olympic sponsorship certainly won’t hurt their chances of increasing their international recognition levels. They may have turned over $14.6 billion last fiscal year but they are still way behind other Asian brands such as Sony. However, they do have a reputation for quality, albeit most people don’t appear to even know their products come from China. Our survey of 400 people who had purchased IT in the last 3 months in Australia showed 65% aided awareness of Lenovo but only 6% awareness that they were a Chinese brand. So whilst Lenovo is likely to make it as a serious international player in the IT market, their impact on the image of Chinese manufacturing is questionable.
Tsingtao
As a beer brand Tsingtao is obviously huge, with sales of $1.6billion in 2006. However its primarily a domestic brand, with only 3% of its sales coming outside the mainland. Its capacity to turn around China’s manufacturing image is questionable unless they increase exports.
Haier
Haier reportedly have foreign sales of approx $3.3 billion and most of their success in international markets has been through joint ventures and strategically targetting niche markets in each country. They have done very well with mini-refrigerators for US college students and extra-large washing machines for extended families in Pakistan. Again they are not well known as being manufactured in China but according to Interbrand they appear to be the most well-known Chinese manufacturer with a good reputation. Within Australia, our survey of 350 purchasers of whitegoods in the last 6 months, indicated that they were certainly a well-known brand (being commonly featured on special in catalogues), there was some scepticism over the quality of the brand not because it was Chinese (as only 8% knew this) but rather because it was generally so heavily discounted.
Hauwei
They aren’t well known in Australia, in fact they’re virtually unknown. However this telecom equipment manufacturer is moving strongly into Europe and the US after establishing a fairly good image in the Middle East and Sth East Asia. Currently they derive 65% of their 8.5 billion sales from foreign markets and they are well known as a Chinese operator.
Other manufacturers
Other brands such as Chery (cars), ZTE (phones), Brilliance Auto (cars), Midea (air conditioners) & Gree (air conditioners), certainly are global players but do not sell under their own name. Rather they manufacture for well known brands around the world and their goods are rebadged. Consequently whilst their goods may have good reputations, little of that flows back to the image of Chinese manufacturing.
There appears to be two choices for China. Either it has to shed its negative image as a quality manufacturer in order to establish international brands originating from China, or else its going to have to settle for being a factory for world brands.
The fairly evident fact is that despite some problems in China with manufacturing, they are capable of producing quality goods. The problem perhaps is more one of consistency. The next few years should prove an interesting challenge both for the Chinese government and those Chinese manufacturers who are making it in the global arena – to turn around the liability of their heritage or to hide from it.
