The Chinese are coming
Here come the Chinese brands. The slumbering giant has been awoken and will soon be developing big brands to take on the big boys in their own back yard. Some say that the biggest challenge to Chinese global domination in certain markets is the lack of marketing skills and, in particular, brand building skills.
However, China’s low labour costs allows them to manufacture less expensive goods which in turn, allows them to invest heavily in branding and/or share some of the savings with channel partners and ultimately customers. China has a large and growing pool of talent and also has money to invest in new products and brands. So China can manufacture quality products – but can it create marketing strategies for the wave of new products which they can now manufacture? If they can’t, perhaps they know a man who can. Perhaps distribution channels, pricing skills, service networks and brand savvy can be bought or developed for them by high power strategic consultants, alliances and joint ventures?
Or will they just buy, merge or acquire some established (or even ailing) Western brands and eventually move the manufacturing to China? To gain scale in these highly competitive global market places, these Chinese brands will also have to compete in the Western home markets too. Watch out for Haeir refrigerators, Legend Computers, Kejian mobile telephones (Everton FC’s sponsors), SVA electronics (and plasma screens) and SAIC Cars (Shanghai Automotive Industry Corp) from whom Britain’s MG Rover would, apparently, welcome a take-over.
So in classic marketing mantra - mind your customers but also be mindful of your competitors and potential partners – including the ones you haven’t yet seen.
© PR Smith December 2004