Thursday, June 21, 2012

We Will Brand You

'Made in China' gains acceptance:

"Made in China" is a phrase Americans know mainly as an indicator of pervasive offshore manufacturing. But increasingly it's being attached to products originating in China from domestic companies - and gaining acceptance in the West.

A recent survey by Li-Ning, a leading Chinese athletic footwear and apparel company, found that a growing number of consumers in the United States are willing to buy products of Chinese origin.

Li-Ning Co, which was founded by 1984 Olympic gold medal-winning gymnast Li Ning, set out in 2011 to launch a sportswear line in the US. The Beijing-based company partnered with Acquity Group, an e-commerce and marketing consultant, to help expand its US consumer base.

They came up with Digital Li-Ning, a joint venture with a $10 million investment that entailed the launch of an online retail site,, and development of a new apparel collection for the US market. Digital Li-Ning is based in Chicago.

According to the study, there has been a significant shift in US consumers' perception of Chinese brands over the past five years. About 62 percent of Americans said they were more likely to purchase products from Chinese companies today than they were in 2007.

Two consumer groups, those aged 18 to 25 years old and those with annual household incomes of over $225,000, were most likely to regard Chinese brands favorably.

This is the next challenge facing China as it attempts to emerge as economic power. It has proven itself adept at making stuff, but much of that stuff has been for non-Chinese companies and brands. You’ll really know that China has arrived when Chinese brand names have the same recognition as do those of companies in the United States, Western Europe, Japan, and Korea.

After spending last week in Beijing (at least in and around the airport) and Nanjing, I am not convinced that this is going to happen anytime soon. For all the talk we hear about how China is going to eclipse America as a global superpower, that’s not the reality that you see today on the streets. Despite having once been the capital city of China and having a population somewhere around eight million, Nanjing is now considered a second-tier city in China. People in Shanghai, Beijing, or Guangzhou look upon Nanjing they way that people in New York or Los Angeles might look at Minneapolis. It’s sort of a Chinese version of flyover country.

When I walk or drive the streets around here, I rarely see people wearing shirts with Chinese phrases or characters from Chinese children’s television on them. I don’t believe there is a single chain restaurant of Chinese origin. Billboards don’t advertise movies made in China. In other words, the impact of Chinese brands on the local culture is nil.

By contrast, the streets of Nanjing are teeming with people wearing t-shirts with English phrases (often oddly incongruous) or SpongeBob Squarepants. If you so fancy, you can eat readily eat at McDonald’s, KFC, Pizza Hut, or Papa John’s. You can pick up a coffee from Starbuck’s or an ice cream cone from Cold Stone Creamery. You can watch the latest (well, almost latest) Hollywood blockbuster at a nearby multiplex. If you look closely, you would notice that many of these people are also wearing jeans or shoes bearing a US or European brand name.

While some would decry this as the tragedy of globalization and corporatism, I took comfort and even a sense of pride in seeing this. While China might be making a lot of the stuff today, we’re still making the brands. And the brands and the images that they’re selling along with their product have a lot more influence than the stuff itself does.