Chinese MNC’s want to shed the Chinese part of their name
By Jason Barber
I will name a few MNC’s (Multi-National Corporation) and I want you to quickly determine in your mind what country they are from:
Siemens, Panasonic, Nokia, GE, Research In Motion (Blackberry), HTC, Vizio, Land Rover, Westinghouse, Philips, IKEA, Bayer, Toyota and Rio Tinto.
If you ask an average American they would most likely say that they are all American companies (they are not), except for maybe Toyota, but most people (including most Americans) don’t differentiate where these companies are from, (or even originally from) or where their products are made. They have become large enough in size and in their presence in certain countries that as far as users are concerned, it really doesn’t matter where the company has it’s headquarters. Toyota may be a Japanese brand, but if you live in Atlanta, Georgia chances are your sedan was made in the USA. (If you live in the US) Bayer is aspirin, does it really matter that it is a German company. The writing on the bottle is in English, isn’t that good enough?
Land Rover and Vizio are two good examples of perception vs. reality. Land Rover is a British brand owned by an Indian automotive company and manufactured in England, Spain, Brazil and even Iran. While Vizio on the other hand was started by a Taiwanese businessman who is also a US citizen and is manufactured in China, but is clearly perceived and even advertised as an “American Brand.”Chinese companies do not get mixed-up as easily.
From Forbes.com Chinese Brands Go For Global Gold
“The current obstacle is that consumers don’t associate quality with ‘Made in China,’” says Lucian James , founder of Paris-based brand consultancy Agenda. “These brands need to hone their message, that way the consumer can get excited about it.”
Now let me name a few additional MNC’s and have you guess where they are located.
Lenovo Group, Li NIng, Royal Furniture, Haier, Anta, Shanghai Tang, Tsingtao, Gree, Changyu.
The companies listed above are all Chinese brands hoping to branch-out to the rest of the world. Most have already begun their international expansion with differing levels of success, but all face the same challenge; they will forever wear the “made in China tag.”
The following snippet is from an older Forbes.com article titles China Multinationals creep Abroad by Paul Maidment:
“Global companies also need global brands. No Chinese company has yet turned a domestic brand into a well-perceived global one. All Chinese companies are weighed down by a general impression outside the country of quality matching price, something that will have to change as the country moves up the development ladder.
Computer maker Lenovo is closer than most Chinese companies to having a global brand, and it took a shortcut by buying IBM’s personal computer business. More than 70% of Lenovo’s top team are not Chinese nationals. An American, Bill Amelio, who used to run Dell’s (nasdaq: DELL – news – people ) Asia-Pacific business, is chief executive.”
For most Chinese companies there is no shortcut. How Chinese MNC’s will succeed: Hyundai motors success in the United States (and abroad) is a great example of the power of time and the brand growth of a foreign MNC succeeding in a foreign country. In the US, Hyundai was considered a cheap Korean brand for years simply because it was true. They made cheap cars. Then they got serious and improved their vehicles. In 2006 they really made a big step and consumers and critics alike began to notice. But they are not there yet. There is still a stigma and a stereotype to break, and although it is happening, it has been a very time intensive process (well over a decade of gradual improvement.) China has a stigma and stereotype not just attached to one product or brand, but an entire countries collective goods and brands. “Made in China” is deeply ingrained into the minds of the world’s consumers and the only thing that will change their perception of Chinese manufactured goods is for China to make high quality goods; FOR A LONG TIME. “The proof is in the pudding.” Or in China’s case, in the LCD TVs, remote control cars, backpacks and circuit boards and..
Jason Barber, Arrow Quality International, Rise of The Dragon Blog
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February 25th, 2009 at 4:13 am
Yes, there is a negative general perception of chinese made products and this has to do mostly with the ‘make cash quickly’ culture that has sprung shortly after the country opened up in 1978.
But I perceive that things have started to change, slowly but surely, and more emphasis is put now on ‘quality culture’, it has begun with more attention paid to packaging and the general image of the products, then an upgrade of the product itself with a readjustment in price to reflect the ‘better’ quality product.
And with the competitors also readjusting to give better quality products, thus a subtle shift has been achieved.
There is still margin for improvement, there always is, and as competition gets stiffer both in the local and export oriented market, the chinese will have to rethink their strategies.
February 27th, 2009 at 12:22 pm
Yes, they will forever wear the ‘Made in China’ tag, you speak of, but I don’t think this will necessarily be a bad thing forever.
I remember talking to my 80 year old grandmother about this very subject. She said how over her lifetime she had watched the goods developing countries produced go from very low-end to high-end in the space of a few decades. Finland, Japan and Taiwan are such examples.
Although China will quite possibly be perceived as the ‘world’s factory’ for a long time to come, I do believe the world’s perception of products made in China has already begun to shift. I think all of us will be surprised by the technology that comes out of this country in a few decades.
March 4th, 2009 at 12:28 am
In a decade this conversation will be moot. America was recently listed as the 6th most innovative country in the world and I believe South Korea was listed as number 2. The trajectory for the debate to be over is mid to end of arc in regards to China. Branding location will be agnostic, what will count will be the product experience. The larger MNC’s in fact are mini-states within themselves with their own security, global presence and influence.
March 4th, 2009 at 3:44 am
I think the issue is that the Chinese companies that are trying to branch out are already huge in China with established brand – so why would they consider to change their name to be more international? Hence it will take time to change the perception. Consider, however, LG (from Korea) which was renamed to current 2 letters specifically to fit in with their international ambitions.
November 13th, 2009 at 10:14 am
I still find it funny that one buys something thing that it is in fact local but as soon as you see the tag, 9 out of 10 time it will say made in China, I would have to agree with Lings comment she has a very good point there with regards to China’s established brand.