My 2 rupees on global brands from China

Bruce Einhorn brings up a fascinating question in his post today "Why can’t Chinese build global brands?". It intrigued me enough, since it falls squarely in the midst of my interest in global brands emerging from these rapidly developing economies to dig in and see what I could find. Here’s the key snippet,

The Japanese did it. The Koreans did it. Even the Indians are managing
to do it now. So why can’t companies from Greater China have more
success building global brands? For years now, companies from China and
Taiwan have been trying to develop global brand names – and do it fast.
Rather than slowly, slowly, slowly building their brands overseas, the
way that the likes of Sony and Samsung did, many have tried to go
global overnight
by buying famous but troubled brands in the West and
trying to lower costs by shifting production to China.

While I’m going to follow up with a more thoughtful researched post in an attempt to answer this question, my off the cuff response is that the answer is embedded right in the paragraph I’ve quoted above. I’ve highlighted my first impression. Speed kills, methinks.

Back soon with more.

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6 Responses to My 2 rupees on global brands from China

  1. Matt Huebert says:

    Hmm. If you’re right, wouldn’t it make sense that we aren’t yet seeing major global Chinese brands blossom? If they key is to grow slowly, then growing slowly may be exactly what a wise few of them are doing, and their slowness is exactly why we aren’t seeing the results yet. The fact that we’ve seen a few high-profile acquisition flops may only be distracting from the slow-movers beneath.

  2. niti bhan says:

    Matt, your comment is one that certainly makes sense. Quick results and the pressure to meet quarterly earnings figures is a ‘motivator’ that may not apply to other markets and the slow and steady approach of the Koreans in India with their resultant ranks as top consumer brands are all pointers to underline your observation.
    On the other hand, China Mobile, Huawei, Haier and Hisense are certainly making some waves as brand builders – aspiring global brands certainly. I’ll be coming back to this topic soon.

  3. niti bhan says:

    Here is the study on China’s most valuable brands that I’d noticed in June 2006. http://www.chinadaily.com.cn/bizchina/2006-06/20/content_621490.htm
    Begin quote:
    The 2006 World’s 500 Most Influential Brands also released by WBL are from 28 countries. The United States has built 245 of them, accounting for 49 percent; France, 46 brands, accounting for 9.2 percent; Japan, 44 brands, accounting for 8.8 percent.
    China has only six brands on the list, including Haier, Lenovo, CCTV, Chang Hong, China Mobile and CREC.

  4. The Japanese did it. And the Koreans did it. Why hasn’t China? Well here are two guesses…
    1. The United States played (and still plays) an enormous role both structurally and culturally in post WWII Japan and Korea–not China. Its not a strech to imagine American values and methods having a significant impact on Japan and Korea. One such impact being America’s approach to developing business.
    2. China’s Great Leap Forward and Cultural Revolution are still very much in living memory (something the govt is seeking to erase from history by erasing it from history books–the only shame a mistake can bring is if you forget it and never learn–good luck Hu). These decimated the educated and creative classes. A nation doesn’t recover from this kind of damage quickly (despite the cirriculum rewrite). Only in the late 70s under Deng Xioapeng did China even start to rebuild these classes. This means that China simply doesn’t have the depth of business development history Japan, Korea or the US have.

  5. niti bhan says:

    And the british influence in India. Yes, your observation makes good sense. I wouldn’t be surprised if it wasn’t one of the key reasons for the discrepancy. Even the WEF has recently shown that India’s overtaking China, not that one would want to compare or anything 😛

  6. I think you know my bias… India will surpass China. In terms of financial, human and cultural capital Open trumps closed, markets trump command and control, and freedom trumps opression.
    There are, I believe, dire economic consequences to the political expediencies of authoritarianism. I suspect China will soon experience them.

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