China's hunger for respect grows with each success. Its flourishing manufacturing, flawless Olympics and flush cash reserves endow Chinese leaders with justifiable pride. Yet, Chinese leaders lust for innovative native companies with famous world-class brands. Case in point: yesterday, The Washington Post's John Pomfret detailed China's failure to create any well-known brands and illustrated the Chinese government's ill-fated effort to build or buy world-renowned brands.
Pomfret also accurately described China's strong and growing reputation for quality manufacturing while depicting its struggles with innovation and the lack of any corporate brand strength. Indeed, not one Chinese company is on the Interbrand annual listing of the top 100 brands globally.
I can see China's challenge in my post as head of a trade association--which includes some one-third of the top 100 brands--and, which produces the nation's biggest marketing and innovation event, the International CES. That said, to innovate and build powerful brands, China must change not only its marketing -- but itself.
Here are some basics for China:
China's brand as a country matters considering that the "national parent" gives context and helps shape an opinion. This is true for the United States, which houses most of the world's leading brands and conveys innovation, intense competition and cutting edge quality. Similarly, German brands convey precision workmanship while French brands mean style.
We should admire China...simply feeding 1.4 billion people and achieving a modicum of the desired social "harmony" is incredible. But the costs of this success subdue our admiration. The lack of free speech--including the censoring of Google--the rampant piracy of intellectual property, the political difficulties with Taiwan and Nepal and the well known Chinese support for repressive regimes in North Korea, Cuba and Venezuela invoke a stain on China which counter the positive images needed for successful branding.
More, the Chinese government has hurt the brand of Chinese companies by insisting on rules that unfairly tilt the market to Chinese companies. The Chinese government emphasizes and encourages a view of Chinese brands as weak that cannot stand upright without unfair government support. The "indigenous innovation" rule requires the Chinese government to buy Chinese branded products and only use Chinese innovation. Even doing business in China requires world-class companies to agree their Chinese partners will receive their intellectual property and share the knowledge behind the inventions. The Chinese view is that their market is so large they can impose what they want to encourage and protect their domestic industry.
While the Chinese have purchased well-known brands, like RCA and IBM personal computers, they did not recognize that the acquisition cost is just the beginning of owning a brand. A brand is like a child, which must be schooled and disciplined and taught to adjust to change. A brand must be built through quality and through PR and marketing including advertising, media, sponsorships and events.
At the International CES, we see many Chinese companies exhibiting in the hope of securing distribution to enter the global market. But few take advantage of the 5,000 media at CES to build up their name or introduce products.
Chinese companies have a shot at being world class brands if they invest in quality, play by the rules and invest in marketing and in the countries where they want their brands to gain market share.
Ralph Waldo Emerson said, "Men are respectable only as they respect." If China wants respectable brands it must respect those who must decide whether to buy its brands. To build global brands, China must change how it treats its citizens and how it approaches its customers.
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