Well established on their own turf, China’s big brand companies have arrived in the UK as they consolidate the process of global reach and change perceptions forever.
China has many huge, well-established brands, yet many of them have some way to go to make themselves household names in international markets.
The brands most of us have heard of include Lenovo (computers); Huawei (telephones) and Alibaba(sourcing). Yet, a third of exhibitors at Las Vegas’s CES show are Chinese and as China’s Shenzhen Silicon Valley begins to evolve, is it time for a rethink on Brand China?
Take for example, Tencent, an internet and messaging business, with more than one billion monthly users signed up and worth more than $132.2bn (March 2018). We’re talking about a business bigger than Coca-Cola and a giant compared with Nike (at only $15.9 billion – September 2018). Despite this, hardly anybody in the UK has ever heard of Tencent. Now with an eye on Western expansion, Tencent is promoting its WeChat messaging app and gaming platforms, seeking another opportunityto make more growth.
Yet, to westerners, Chinese brands have historically have been linked to concerns around counterfeiting and product quality. Through the use of savvy marketing techniques and persistence, Brand China is determined to address these perceptions.
What are the three key strategies Brand China has employed to change perceptions and entice Western consumers?
China’s previous reputation of ‘pile it high and sell it cheap’ appears to be on the wane. By pricing goods in line with reputed products, Chinese newcomers electronic brands Oppo and Mi, aim to increase not only brand awareness , but to alter perceptions of quality and product craftsmanship.
Some Chinese brands have engaged Key Opinion Leaders (KOL) to help with ‘word of mouth’ promotion through dynamic social media campaigns. And, Western celebrities are increasingly on China’s product launch speed dial, with Scarlett Johansson cashing in amongst others. Huawei’s trendsetting young smartphone brand, Honor signed Brooklyn Beckham as global brand ambassador in 2016. Whatever your view, Honor now has over 80 million global users, most of whom are in the Millennial 18 to 34 years age bracket. Huawei has since been in the headlines as primary sponsor of the extreme sports event, Festival International des Sports Extremes (FISE). It’s becoming increasingly clear that brands that focus on building their reputation, rather than just pushing products are seeing enhanced performance.
Developing a global identity
Dropping the focus from national identity and taking on a more agnostic brand image can also work well – as Lenovo did before it bought IBM’s personal computer arm in 2005 and subsequently Motorola in 2014. The result is that 26% of Lenovo’s revenue now comes from EMEA, compared to 28% from within China.
Chinese brands are beginning to build compelling brand stories by using TV campaigns, sports sponsorship and pop-up events to crack the West. They know that it’s essential to grow their street credibility and they are using their smarts to get ahead.
Recent performance at Huawei is equally compelling. In the 2ndquarter of 2018, Huawei made more shipments than Apple. Huawei also entered into an interesting partnership, working with Google to deliver a German camera on its collaborative Nexus 6P.
What does Brand China’s growth strategy mean for UK marketers?
The UK’s creative industries generate more than £100bn a year to the UK economy and are globally renowned. Is there now an opportunity for the British creative industry to lead Chinese firms through a transition into other markets?
Clearly, it will help credibility for any exporter to work with established local businesses, in addition to being a route to avoiding the pitfalls of entering new territories.
Many British creatives have an edge with their forward thinking collaborations. StoryFutures is an example of a UK creative hub on a mission to drive innovation in “creative, immersive storytelling connecting businesses, creating jobs and developing next-generation talent as the sector seeks to harness data-driven personalisation, smart devices and AI to reach audiences in new and complex ways”. And Chinese brands are mightily interested in AI, research and big data in marketing intelligence.
What opportunity does Brand China’s globalisation offer you?
The trusted advisor is an age old concept, yet has never had such value. UK creative companies that can support Chinese exporters to bridge the cultural divide and build their brand presence and following in the UK, may have a real window of opportunity. There’s a view that China’s own creative industry has not got the maturity to keep pace with its thriving technology sector. This is likely to change as quickly as Brand China has developed its reputation. China is a place where resources and brainpower are being rapidly directed towards the next quantum technical revolution. If you want to join the party, it’s no time to sit back.
Is it time to evolve your company’s relationship with Brand China? Not only is there a chance to build new profitable partnerships, but also to work on high-budget, innovative projects across the globe. Chinese businesses are certainly considering entering the UK market as part of their global strategy. And they might be looking for a UK marketer just like you to nail their ambitious growth plans.
So, what are you waiting for?