China Inc. Wants to ...


Brand China 08-14

Teaming with the BBC and Campaign Asia, we’re participating in a roundtable in Beijing on August 18 that takes on the topic of Chinese companies pursuing global brands.

Because of our strength in Asia, we’ve had a fair amount of experience over the years in helping Asian companies — including many from China – establish a footprint in the U.S. market. With the roundtable less than two weeks away, I’ve been reflecting on our campaigns for Chinese companies, what worked, what triggered pain and the life-is-better-than-fiction moments.

Yet — like a bungee cord — my mind keeps snapping back to a Businessweek cover from 10 years ago.

Businessweek China Cover A 08-14

I view this as the No. 1 obstacle that Chinese companies must overcome in their quest to build global brands.

Even though this Businessweek cover feature appeared in 2004, I would argue the issue is even more pronounced — and more complex — today.

With that said, the issue by itself is not a “deal killer.”

From my own experiences, what hurts Chinese companies is their failure to acknowledge the perception. As a result, they often charge forward with no plan of action on how to diffuse it.

I wrote a post called “The Top 10 Reasons Why Americans Companies Fail at International PR.” At the top of the list was what I termed “Americanitis,” a failure to recognize that success on your home field means little when venturing overseas. All companies, not just American companies, seem to have the same blind spot.

Ironically, the stronger a company is in its home market, the tougher the transition can be in expanding overseas. When a company “owns” the local market, it can breed a false sense of security. When it hits a pothole on the global stage, the reflex can be defensive when it should be introspective.

Turning back to Chinese companies, it’s easy to conclude that they’re stuck forever with the value proposition that spooks American industry: “Buy us. We’re cheaper.” Such a conclusion would be a mistake.

When I was growing up in the 1960s, Americans associated cheap and low-quality goods with the “made in Japan” stamp. Today it’s just the opposite. Americans view Japanese products as high in quality and worthy of a price premium. Sure, it takes time, but there’s no reason that Chinese companies can’t climb up the food chain.

Of course, discussing how Americans in general perceive Chinese companies is incomplete without touching on the Chinese telecom juggernaut, Huawei. In 2012 when the U.S. House of Representatives Intelligence Committee released a report that essentially said, “Don’t trust Huawei (and ZTE),”and “60 Minutes” used the same information to pile on, the image of all Chinese companies suffered.

Since the report, we’ve witnessed the NSA debacle and more recently the U.S. federal government indicting five Chinese military officials for allegedly stealing U.S. corporate trade secrets, the Chinese government pushing state-owned enterprises to sever ties with U.S. consultancies, and just last week a raid on Microsoft’s China offices as a prelude to an anti-monopoly probe.

The point is, the geopolitics and the inevitable tit for tat between China and the United States aren’t going away. To rise above this fray, Chinese companies with global aspirations need to recognize that people fear the unknown.

That’s why they should take matters into their own hands and tell their stories.

This dialog on Chinese companies going global will continue next week when I interview Jason Wincuinas, managing editor of Campaign Asia-Pacific.

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