Until lately, Chinese companies have essentially been following a business-to-business (B2B) model.
To compete internationally, they were satisfied with the combination of good products and
low prices. For instance, the Chinese home appliance manufacturer Galanz Group, based in Guangdong, produces about 50 percent of the world’s microwave ovens sold under some 80 different brands.
The difference between a good corporate name – e.g., Lucky Skydust – and a brand is in the way it competes along emotional dimensions. On a jet engine, travelers might prefer the name GE, which connotes time-tested seriousness, over the made-up name Lucky Skydust.
The Chinese government is aware that, to conquer the hearts and minds of consumers, it will be necessary for China to master the art of branding. The People’s Republic has set aside a US$ 15 billion budget for acquisitions of companies and brands, preferably with a brand management team.
In 2005, for example, the Nanjing Automobile Group wanted to acquire the British car maker MG Rover Group for £53 million (US$ 100 million). The deal would include a brand portfolio including Austin, Morris, MG and many other illustrious car brands.
Do you remember the 80ies, when “Made in Japan” mostly meant “of poor quality”?
Ten years from now we expect to see Chinese brands among the top brands like Sony today.