The globalisation of Chinese brands.
The globalisation of Chinese brandsThe AuthorsYing Fan, Brunel University, London, UK Abstract Purpose – To examine the state of health of branding in China, focusing on the performance of major Chinese enterprises in creating brands (as distinct from brand names), sustaining them in the huge domestic market and expand them into global markets. Design/methodology/approach – The study begins with a historical review of the development of marketing in China, discusses the transition from price competition to branding in the domestic market, and explains the role of government in the process. Thereafter, case histories describe, analyse and discuss the routes to internationalisation followed by taken by six of China's biggest brands. Findings – Modern Chinese companies are large and successful as manufacturers, but uncertain about the relative merits of branding and global marketing versus continuation as OEMs for established global brands. If they do have international ambitions, they seem unsure about strategy, or even about where to look for precedents and advice. Many initiatives have met with comparative failure; only one, the Lemovo-IBM merger, seems to offer a blueprint for success, but has been in operation only since 2005. Many lessons remain to be learnt, applied and tested. Research limitations/implications – Six case histories, however well chosen, cannot be considered a definitive picture of the Chinese approach to international brand marketing. The findings are nevertheless highly indicative. Practical implications – International marketing strategists are obliged to have an interest in China, by virtue of the simple fact of its size and dynamism. Several of the companies discussed are the largest of their kind in the world. Despite the limitations noted, the actual and potential conclusions to be drawn from the findings reported here are therefore a significant contribution to the body of applicable knowledge. Originality/value – Whereas many authors have studied Western brands in China, little has been known about the potential of Chinese brands in the West.Article Type: Case studyKeyword(s): Brands; International marketing; Globalization; China. Journal: Marketing Intelligence & PlanningVolume: 24Number: 4Year: 2006pp: 365-379Copyright ©Emerald Group Publishing LimitedISSN: 0263-4503Note on currenciesThe contraction “RMB” for the Chinese yuan stands for renminbi, translating as “people's currency”. In early March 2006, the conversion rate for the yuan (RMB) was 0.12 to the US dollar (USD), 0.07 to the pound sterling (GBP) and 0.10 to the euro.Historical backgroundIt is now difficult to find a shop in the West that does not sell products with a Made-in-China label. China has overtaken Japan within the last decade to become the largest manufacturer and exporter of consumer goods. It is believed that China is now the world's number one producer in 172 categories of different consumer and industrial products (Barboza, 2006). In the 1990s, the country's trade growth was three times faster than the global average. Between 2000 and 2002 its exports and imports rose by 30 per cent while world trade stagnated (WTO, 2003).And yet, as “the world's factory” China has yet to create a single brand that is recognised worldwide. This paper discusses the current brand revolution in China, focusing on the unique challenge faced by major Chinese enterprises: how to sustain their brands in domestic competition and how to expand in the global market. Key issues that affect brand transformation and internationalisation have been identified, using case examples of manufacturers of white goods, television sets, personal computers and microwave ovens. The main research input was a variety of web sites, among which www.globrand.com (in Chinese) alone yielded more than 400 relevant articles.Despite its political history in the twentieth century, China has had a long history of commerce and marketing. The world's first print advertisement appeared during the Northern Song Dynasty (960-1127), for Liu's Needle Workshop in Jinan City in Shandong Province. The first European advertisement, a poster promoting the Bible in Britain, did not appear until 300 years later (Xinhua, 2004). “Made-in-China” was for many centuries a label for high quality and prestige goods, imported exclusively for royals and the rich. When China's economy went into a long decline in the nineteenth century, the reputation of Chinese-made products suffered a setback from which it has yet to make a full recovery.Contemporary advertising in China dates from the 1920s, since when it has experienced many ups and downs. Examples from the 1920s to 1940s include calendar posters featuring beautiful women, produced in Shanghai, which are now collector's items. After the first advertising boom in the 1930s, the advertising industry suffered restrictions when the People's Republic, founded in 1949, began to implement a Russian-style centrally planned economy. During the Cultural Revolution of 1966-1976, advertising was branded evil and deceptive, and virtually disappeared. It began to reappear in 1978, with the start of economic reform and the “open-door” policy. However, even in the dark days of the Cultural Revolution, such brands as Panda radios and Flying Pigeon bicycles remained sought-after products. The last decade of the twentieth century witnessed dramatic growth in the advertising business, with average annual growth rates of jus under 40 per cent. Total advertising revenue increased more than 28 times to 72.2 billion RMB (US$ 9 billion) between 1990 and 2000, taking China into the top ten largest markets for advertising services.World-class brands?Does China have any major brands, as they are understood in western terms? In a recent interview, the chief executive of the global Ogilvy & Mather advertising agency asserted that are only brand names that “aspire to be brands” not real brands ( Business Week , 2004 ). Chinese companies “think branding is important, and they want to understand what a brand is. But they don't have any experience”. The Co-Chairman of Ogilvy & Mather Asia Pacific commented in similar vein that “brands don't exist in Korea” (Sudhaman, 2004). The majority of brands in China today are no more than well-known names, lacking the key attribute of a real brand. There is yet a single Chinese brand that is recognised worldwide. “Giants with feet of clay” was the pessimistic assessment from an influential source of the ability of Chinese enterprises to compete on the world stage ( Economist , 2004 ). Only 11 Chinese companies rank in the Fortune 500 list of top global firms by revenue, and only two are in the FT 500, ranked by market value. Not one brand figures in Interbrand's top hundred list.Although Chinese brands have made evident and impressive progress in terms of internationalisation, they still have far to go to compete with their global rivals, and the gaps are even widening in some respects. This is demonstrated by the revenue of China's largest consumer appliance company, Haier, which in 2002 amounted to only about ten per cent of Sony's total electronics sales. In that same year, the combined gross electronic-systems sales of the top 30 Chinese OEMs corresponded to only 64 per cent of Hewlett Packard's sales alone ( Twice , 2003 ). In terms of profitability the gap is even larger. China's domestic TV market has been dominated by the so-called Big Four (Changhong, TCL, Konka and Skyworth) for some years, but the combined profits of more than 20 domestic TV manufacturers are less than that Sony's.However, there is also an optimistic side. The highly influential British advertising figure, Lord Saatchi, has argued that: China is always going to be an important element of the global ad business … but we have been struck with the reverse potential: we don't see any reason why Chinese brands cannot have the same impact in the US, as US brands have had in China (Xinhua, 2004).He further points out that the laws of economics come into play in international brand development: There is an economic inevitability to the process. In Stage One of a nation's economic development, a country manufactures products for others; in Stage Two, it manufactures products to its own specifications; during Stage Three, it manufactures its own specifications for its own brands.In the same way that established and often complacent firms in the West were challenged by the emergence of Japanese electronics and automotive brands in the 1960s and 1970s, and Korean brands in the 1980s and 1990s, the world might expect the same of China. It is worth noting that many top Chinese enterprises were barely in existence 20 years ago. They have all the potential and opportunities to become global players in the not too far distant future.From advertising to brandingThe development of marketing and branding in China since transition to a market economy began in 1978 can be roughly divided into three stages. The first, in the 1980s, was the production stage, the country still reeling from the consequences of the centrally planned economy, in which virtually everything was in short supply. The consumer goods markets were all dominated by international brands and those made in foreign joint ventures. The 1990s was the stage of selling and advertising. There were major changes in the market, and supply outstripped demand in many sectors. Competition was intensified and price wars became common. Domestic companies established themselves, notably in the television and home appliance sectors, and took market share from international brands. Advertising was widely regarded as the most powerful weapon after price. Chinese companies confused advertising with branding in a naïve belief that it could create brands, that heavy spending would create big brands, and that sales would automatically follow. Corporate identity was also in fashion during this period. Firms spent millions trying to change their logo and promoting their new image. Many companies were initially seduced by the “successful” effects of such campaigns, but were almost always disillusioned eventually. For instance, in 1997, one small brewery in Shangdong Province paid five times its turnover for the 30- second slot called the “golden time” immediately after the Central Television's Evening News, which delivered about 700 million viewers nationwide. The brand instantly became a household name and sales tripled. But the brewery could neither meet the demand nor guarantee quality. Two years later the company was close to bankruptcy (Globrand.com, 2005). Some Chinese companies have tried innovative ways to communicate their brands to the market. Kejian, a mobile phone company, is a purely domestic brand that has found a unique way of developing brands through its £2-million sponsorship of the English Premiership football club, Everton. It does no business in the UK, but 93 million Chinese watch Premiership matches on television every week (Fan, 2005).The early twenty-first century has seen the start of a third stage of branding and globalisation. In November 2001, China became a full member of the World Trade Organisation. Its domestic market is characterised by intensified competition, mass over-capacity and decreasing margins. The average life cycle of a Chinese brand is seven and half years, and most seem to be short. In 1995, more than 200 brands competed in the household electrical/electronics industry. By 2000 only about 20 remained in business. An important sign of market maturity has been the social development of consumers, who have become better informed and more sophisticated. A recent survey of 600 in four cities by a US consulting company found that they were no longer concerned only about price; quality, service and choice were the top three criteria in their purchasing decisions. They also developed loyalty to preferred brands ( China Quality News , 2004 ). Facing a changing environment, Chinese companies have begun to take branding more seriously, but their understanding of the concept remains vague and superficial. In every advertising campaign and every advertisement, it is the company that is promoted. A typical message would speak of the firm's history, its production capability, its technological competence, its position as a market leader, and the number of prizes it has won. What is promoted is a corporate name, rather than brand value. Without product branding, it is very difficult to differentiate competing offerings, and there is no emotional incentive for the consumer to buy. As a result, there is only sales competition, which often leads to vicious price wars.The importance of branding is well captured by the Chairman of Interbrand, “He who owns the brands owns the wealth” (Cass Creative Report, 2004). The world's 100 largest consumer goods and retail companies that rely on overseas production collectively recorded sales of US$ 3,578 billion and profits of US$ 228 billion. By contrast, the top 100 OEM manufacturers in the Asia Pacific region supplying those companies achieved sales of only US$ 85 billion and profits of US$ 4 billion. ( Business Week , 2003 ). That represents an extraordinary ratio of 1:50 between the brand owners and the OEMs.Diversification: a blessing or a woe?Many Chinese companies embarked on diversification in the early 1990s, when the fierce competition in their original business sectors drove down the margin. A classic example is the now very large Haier Company, a thumbnail case history of which is presented later in this paper. It started as small factory making refrigerators and later expanded into washing machines and other household appliances. It now manufactures more than 15,000 product items in 96 categories, covering a wide range of white and brown goods, and consumer electronics. Since, 1995, it has undertaken wholesale diversification into totally unrelated businesses: pharmaceuticals, logistics, catering and financial services. The company declared diversification and internationalisation to be the two main elements of its long-term growth strategy. However, most of the unrelated diversification ventures ended in failure after modest initial success.Haier is not alone in its seemingly careless pursuit of diversification. In 2003, the personal computer manufacturer Lenovo (also the subject of a case history) announced an investment of RMB 3 billion in real estate. It is now hard to find a Chinese company of reasonable size that is not diversified; these are described as “jituan gongsi” or “group companies”. This misapplied strategy does not help to solve the problems of the existing business, and may even indirectly aggravate them by distracting management attention and diverting resources from the core business (Kapferer, 2001). In the marketing arena, it causes confusion amongst consumers about brand positioning and dilutes brand values. Many Chinese companies do not understand multiple branding, and use the same corporate name for various diversified products. For example, Huoli28 sells a detergent and mineral water under the same brand name, while Yuetu extended its branding from cigarettes to female sanitary protection.Many Chinese companies see diversification as the only route to new growth in revenue when price wars destroy the industry margin. This may explain why China is struggling to build home-grown brands ( Economist , 2004 ). Most domestic businesses are broad rather than deep, preferring to diversify rather than concentrate on a core business. This reflects a perception that there is a very large range of opportunities to make money combined with a lack of individual patience. The consistency and quality that builds trust with consumers is not part of the Chinese management style. This is paradoxical, in that opportunist diversification is in apparent conflict with traditional Chinese cultural values, which emphasise the long-term outlook and stability (Fan, 2000).Should Chinese companies hold the earlier view favouring conglomerates for their stability of revenues and earnings, or hold to the contemporary view in developed countries that focused companies build greater shareholder value? The Kotler Marketing Group (which is unconnected with Philip Kotler, beyond overtly espousing his principles) believes the answer is the latter. It argues that all multinational companies today are focused companies, sticking to one industry and investing capital in core technologies to achieve and sustain dominance (Kotler Marketing Group, 2002a). However, there are exceptions. Many Japanese companies are diversified, and European examples such as Virgin also show that conglomerates can be as successful as a focused firm.The role of governmentRealising that the development of brands is essential for the nation's continuous economic growth, the Chinese Government has made constructive efforts to help companies to promote their brands. By the end of 2000, brand strategy administration departments had been established all over the country. In 2001, China's consumer quality watchdog (the State Administration of Quality Supervision, Inspection and Quarantine, or AQSIQ), promulgated regulations on the appraisal and management of state-level top brands. Under its aegis, the State Commission for Brand Promotion (SCBP) was set-up in 2002, to focus on the role government was to play in pushing forward the national branding strategy. Composed of government officials, industrial leaders, technological experts and journalists, it conducts annual product quality appraisals of new national brands, in strict accordance with formal rules and regulations (Xinhua, 2004). Entry to the appraisal scheme is by voluntary application. Successful applicants receive the official designation “China's famous brand” and are entitled to exemption from any further quality inspection for three years. Though there are now 547 brands with the title, some famous brands could not sustain their economic performance, even with government support, and failed the test of market competition. Furthermore, almost one in five of the 1,600 “famous and old brands” certified by the government in 1990 are now on the verge of bankruptcy, and only one in ten consistently generates profits (EIU, 2004).Some Chinese analysts have questioned the legality and effectiveness of such state intervention in commercial branding (Zhu, 2004). They see it as nothing but another form of covert protection, leading to abuse by corrupt officials and businessmen. Every year, Chinese companies typically receive many invitations to participate in similar competitions or appraisals that are not organised by SCBP. In one event, 34 participating firms all received the top prize, a golden cup, simply because they had paid the high entry fee. In other cases, the grade of a prize or merit certificate was decided entirely by the level of contributions received. The appraisal process needs to be open and transparent. The criteria for the China's famous brand scheme itself have also been challenged.It is impossible to build brands effectively in a closed environment after Chinese accession to the WTO. Truly powerful brands will emerge only from market competition via consumer choice and not at the behest of bureaucrats. However, state intervention has some support from the West. The President of the Kotler Marketing Group, mentioned earlier, believes that China needs a state marketing policy, pointing out that the task of a state marketing policy is to change the Chinese mindset from production manufacturing to brand and channel ownership and management (Kotler Marketing Group, 2002b). He argues that a state marketing policy is the key to post-WTO Chinese economic growth. Important ingredients he identifies include guidance and investment support for brand and channel acquisition, investment in product innovation and global brand design, and encouragement of the discipline of market research.Case histories of routes to internationalisationThe main basis for selection of the six case histories that follow was the market-leader status of the companies in their respective sectors, as well as demonstration of the variety of strategies and approaches adopted by Chinese enterprises, covering a whole spectrum of internationalisation, from OEM exporting to full global production and marketing. Their profiles and internationalisation strategies are summarised in Table I.Galanz Galanz was established in 1978 as a textile factory and began to manufacture microwave ovens in 1993. Following rapid growth over the past ten years, it is now the largest manufacturer of that product in the world. It dominates the Chinese market with a 67 per cent share, and is the largest OEM exporter in the world, selling more than 10 million units overseas to more than 248 companies in 2004. Out of every 10 microwave ovens sold in the world, at least four were made by Galanz (www.galanz.com).The company's policy of internationalisation is OEM first, branding second. The Marketing Director of the company has ruminated: What is a brand? A brand is made of a pot of gold. How much gold do we have? We cannot afford to develop a brand in the world market at the moment so we have to do OEM (Fan, 2005).Galanz's stated goal was to become the world's largest factory, and it has already achieved that goal. So what is the next step? The company may lose the opportunity to internationalise forever if it is content to be an OEM exporter.Changhong Changhong was founded in 1958 as a factory producing radar for military use. It diversified into television in 1993 and is now one of the largest manufacturers in the world, with a product range covering 13 sectors, including television, information technology, air-conditioning and digital components. Changhong (//en.changhong.com) sold more than 12 million TV sets in 2003, held a 16 per cent share of the domestic market, and exported to more than 90 countries. Overseas sales are OEM, with only a few exceptions. In Australia, Changhong sells all its products under own brand, Celestial. In the last four years the company has invested heavily in Indonesia, as the part of an expansion strategy in Southeast Asia. It has built production facilities with the capacity for 350,000 TV sets, 150,000 air conditioner units and 300,000 DVD players, and set-up distribution networks with more than 1,000 dealers across the country. The company claims a “huge” success for the Changhong brand, though no sales or market share data are available. Like Galanz, Changhong has taken a cautious approach in overseas expansion, remaining largely an OEM exporter in the world market. At its web site, it is still eagerly seeking new opportunities in OEM.SVA SVA (Group) Co. Ltd, established in 1995 by the merger of three major television manufacturers in Shanghai, has transformed itself into a leading electronics company, with four major business units covering broadband value-added services, information-product manufacturing, photoelectric display devices, and more. The company has a technology laboratory in the USA, and production and sales presence in nine countries around the world. Within China, SVA is still a relatively less familiar brand, ranking only ninth among Chinese companies in 2003. Its sales volume of 15 million units is about a tenth of the figure for the market leader, Changhong. Total sales turnover reached US$ 4.6 billion in 2003, of which about 43 per cent was overseas. Unlike other TV exporters in China, SVA decided to focus on upmarket products such as plasma-screen television sets, TFT-LCD displays and DLP projection units, in order to avoid the intense competition from other Chinese companies selling on an OEM basis at the low end of the colour television market. The company has proved itself by mass-producing quality products at low cost, and made a breakthrough in the highly competitive US market.In marketing strategy, SVA (www.sva.com.cn) has adopted a cautious approach by working first with distributors, to learn more about the local market, rather than selling directly to big retailers. It also sells through internet outlets such as Amazon.com. The company used trade-level promotional activities rather than spending millions to build brand awareness. Its pricing strategy sets a level well below those of its Japanese and South Korean competitors but above its low-price competitors (Gao et al. , 2003 ). TCL TCL was founded in 1981 as a small factory making tape cassettes, switched to telephones in 1985, and became the market leader four years later. In 1993, it entered the television sector and is now the world's largest manufacturer, its products including multimedia equipment, mobile phones, personal computers, domestic appliances, lighting and digital hardware. The company has achieved a record of 42.7 per cent average annual growth for the last 12 years, becoming one of China's fastest growing companies.In contrast to Haier's strategy, TCL (www.tcl.com) decided to first test “easy” neighbouring markets, such as India. In 1999, it chose Vietnam as the key market for overseas production and expansion. The company invested in three production lines, with capacity for 500,000 TV sets and 300,000 DVD players. But the easy option in fact proved to be hard work. Vietnamese consumers at first believed TCL to be a Hong Kong brand. Once its origin was known, brand image became a problem, because most Chinese products exported to Vietnam in previous years were cheap and low quality. This negative perception proved to be very hard to overcome in the short term. Facing strong competition from two long established rivals, Sony and Samsung, TCL struggled to reach a market share of only10 per cent.The last two years have seen a total change of direction in its international strategy. Instead of the expensive and time-consuming effort required to promote the TCL brand overseas, the company decided to buy-in international brands through acquisition and strategic alliances. In 2003, it purchased two companies with headquarters in Germany and the USA. A year later, it set-up a joint venture TTE Corporation with French multinational Thompson, which was destined to be the world's largest TV manufacturer, with capacity of 40 million units. It also signed an agreement with Alcatel to form a joint venture manufacturing mobile phones. TCL now has a portfolio of six brands: TCL and Lehua in China, Schneider and Thompson in Europe, and RCA and Govedio in the USA. In the short term, it could continue to benefit from using these brands in different geographical markets without large investment. But this strategy is only transitional, because it does not make economic sense to maintain multiple brands in the long term, and that could cause difficulty in brand positioning and confusion among the consumers. A recent example is Matsushita. After using the dual brands Panasonic and National for more than 40 years the company decided to discontinue National. Similarly, TCL will have to undertake brand reduction in future, and decide if and when to promote the TCL brand in the world market.Lenovo Established in 1988, Lenovo is the largest information technology enterprise in China, engaged primarily in the sale and manufacturing of personal computers, mobile telephone handsets, computer servers and printers, in China. It has been the market leader for seven consecutive years, commanding a 27 per cent share of the domestic PC market in 2003. It is also the market leader in the Asia Pacific region (excluding Japan), with a market share of 12.6 per cent in 2003.The company was forced to change its English brand name from Legend to Lenovo (www.lenovo.com) in 2003, because the former had been registered in various sectors in many countries, making it difficult to promote the brand overseas. The new name, combining the Le of Legend with the universally recognised Latin prefix signifying newness, is intended to build an innovative image for the group worldwide.Lenovo made a first attempt in internationalisation in 2001, opening of seven overseas offices. Three years later, overseas sales accounted for less than 3 per cent of total revenue, whilst share of the domestic market slipped from more than 30 per cent to 27. In early 2004, the company announced its decision to concentrate on the domestic business, disguising a retreat from the international markets. In a surprise move later in the same year, it bought IBM's personal computer division for US$1.75 billion in cash, stock and assumed liabilities, after an approach from IBM three years earlier that had been rejected. IBM took an 18.9 per cent ownership stake in the new company; 26 per cent is held by the Chinese government. Lenovo acquired rights to the IBM brand for five years. It is relocating its world headquarters from Beijing to Armonk, N.Y., and will be responsible mainly for production, with experienced IBM management retaining responsibility for design, sales and service. Thus, Lenovo acquires a world-class brand name, whilst IBM is free to concentrate on its high-end computer business.It might well have beyond the wildest dreams of many, even a few years ago, that such a potent icon of capitalism could metaphorically change from blue to red almost overnight, but the new Lenovo has become a symbol of the modern East-West collaboration. The combined company has an 8.6 per cent share of the PC market, in third place behind Dell at 16.8 per cent and Hewlett-Packard at 15. This massive transformation in Lenovo's internationalisation was described by the company's chairman as “a turtle on the back of a rabbit”. Some Chinese commentators believe that this acquisition has accelerated Lenovo at least ten years along the road of internationalisation. At the same time, IBM in partnership with Lenovo gains direct access to China's lucrative corporate market, which was forecast to double from US$ 24 billion in 2003 to US$ 47.9 billion in 2008, and eventually to overtake Europe to become the world's second largest IT market after the USA ( Business Week , 2004 ).Lenovo now faces daunting tasks of integration, and culture clashes both outside and within. It is also confronted by a particular branding dilemma: should it invest in promotion of the IBM brand or its own? The new company will inevitably lose some of IBM's corporate customers, but the real challenge will come after five years, when it can no longer use the IBM brand. The crucial question is whether or not Lenovo will have grown into a credible global brand by then. While it may be too early to attempt an answer yet, it is certain that Lenovo cannot win the race riding on the back of a rabbit; it must become an equally agile and swift animal itself.Haier Haier was incorporated in 1984, producing only household refrigerators. Its foreign sounding name comes from Lieberhaier, a technology transfer partner of its early years. The company has become the world's largest manufacturer of domestic appliances, and fifth largest overall in the electronics industry. Its range of electrical appliances encompasses 15,100 varieties of items in 96 product lines, which are exported to more than 160 countries. Global sales turnover was RMB 100 billion in 2004; market share overall was 21 per cent, made up of 34 per cent for white goods and 14 per cent for small electrical appliances. In the world market, Haier (www.haier.com) is ranked fourth [...]... benefited from the Seoul Olympics in 1988, Chinese companies have great opportunities in the next five years to build their brands on the world stage via such major world events such as the Olympic Games in Beijing in 2008 and the World Expo in Shanghai in 2010 The rise of Chinese- owned global brands can help to restore the former strength of the Made-in-China label Figure 1The globalisation of Chinese brands.. . in the writings of Philip Kotler (again, not to be confused with the Kotler Marketing Group cited elsewhere in this paper) or Jack Trout, co-author of the definitive text on “positioning” or they simply imitate Procter & Gamble, IBM and Siemens, regardless of the special characteristics of the Chinese situation The other view rejects the need to learn Western ideas, arguing that new ideas from the. .. knowledge of managing large complex businesses Many still have not truly grasped the art of marketing and brand building in the Western sense of the word They are aware of the necessity, but not of how to do it (Cass Creative Report, 2004) There is a serious shortage of branding experts in China Those with experience in international marketing are even harder to find The biggest challenge faced by the Chinese. .. research is needed in this vital area to identify the key factors that influence the success of brand globalisation Conclusion In a recent article entitled “This is the Chinese century” the former editor of The Times, asserted that world economic growth and many economic indicators now depend on China, including the prospects of the dollar, the Euro, the oil price, industrial commodities, global equity... China is that for the first time we have a huge, poor country that can compete both with very low wages and in high tech ( Business Week, 2004) The recent acquisitions of international brands by Chinese companies, including the takeover of MG Rover by Nanjing Automobile in 2005, herald not only the arrival of Chinese companies into the world market place but also the beginning of their long march to... downplayed its Chinese origin What is the best way for the Chinese companies to build global brands? There is no clear or simple defining method, and it is still too early to assess the effectiveness of different globalisation strategies, as the impact of some recent developments remains to be seen Chinese companies have a long road to travel in the internationalisation process, given the complexity,... once they are in international markets, they will be cut off from the sources of most the competitive advantages derived largely from the low cost base at home There is an urgent need to develop or acquire new competence In an earlier study of internationalisation of five state-owned enterprises in China, Young et al (1996) emphasise that Chinese companies have to undergo a formidable process of education,... the initial capital investment requirement) if the R&D, manufacturing and marketing know-how acquired is to be assimilated throughout the corporation There is no doubt that Chinese managers are very keen on developing new skills in marketing and branding, but they disagree on the sources of such learning One view advocates the wholesale transplant of American theory For every problem in marketing they... the West find their origin in ancient Chinese culture Both views are biased and harmful Chinese companies should learn from all available sources, and in the meantime strive to develop indigenous marketing theory that combines the best of East and West In global marketing, they could probably learn more from Japanese or Korean companies (Taylor et al., 2000; Cho et al., 1994) The history of Samsung is... profitability, and must succeed globally in order to win the domestic market Only 10 per cent of China's top 50 firms by sales have yet to formulate an overseas expansion plan, according to a recent consultancy report (Prystay, 2003) Even these relatively few differ greatly in terms of their goals and strategies Globalisation strategy involves a wide spectrum of commitment and control, and requires the . by virtue of the simple fact of its size and dynamism. Several of the companies discussed are the largest of their kind in the world. Despite the limitations. The globalisation of Chinese brandsThe AuthorsYing Fan, Brunel University, London, UK Abstract Purpose – To examine the state of health of branding