US data reveal Chinese firms' uphill branding battle
Updated: 2013-05-13 11:44
By Michael Barris in New York and Zheng Yangpeng in Beijing (China Daily)
A woman talks on a mobile phone in front of an advertisement for Lenovo Group Ltd in Beijing. Chinese brands are still less known in the United States, a recent survey shows. Tomohiro Ohsumi / Bloomberg
Chinese companies have their work cut out in raising their profiles in the United States and beyond, judging by a new survey showing that a third of Americans would shun a Chinese brand.
The survey from HD Trade Services Inc, a New York-based marketing and brand-development firm, asked 1,500 Americans in a survey: "Would you buy a product if you knew the brand was owned by a Chinese company?"
Sixty-eight percent of respondents said they would, but 32 percent said no. In contrast, 81 percent said they would buy a product if they knew it was Japanese-owned.
"We believe this stigma toward Chinese brands is based predominantly on the perception that Chinese products are of lesser quality, and a general disapproval of Chinese policy," said Daniel Sperling-Horowitz, president and co-founder of HD Trade Services.
This is the second HD Trade survey in two months to explore US consumers' attitudes toward Chinese brands. Last month, the firm reported that 94 percent of Americans it had surveyed couldn't name a single Chinese brand. The exceptions were PC maker Lenovo Group, (2.53 percent), Internet search engine Baidu.com (1.2 percent) and telecommunications-equipment maker Huawei Technologies Co (1.07 percent).
That finding "contrasted with the fact that China is the world's second-largest economy and nearly half of all durable consumer goods purchased in the United States are made in China," Sperling-Horowitz said.
Leo Liu, HD Trade's director of China operations, said the latest results show how important it is for Chinese brands to work on raising their international standing. The findings also underscore the challenges that even well-known companies in China face in cracking the competitive US market.
Among those striving to break through is Hisense Electric, the leading maker of televisions in China for nearly a decade. The company, based in Qingdao, Shandong province, aims to become No 4 in terms of the US market share within five years. But Hisense, which had just 3 percent of that market last year, is battling the view many Americans still hold of Chinese-made products as inferior, Lawrence Li, Hisense USA's CEO, told China Daily in an April interview.
"This stereotype is common in the market," Li said. "The fact is that in past decades, many Chinese companies tried to get a foothold in the US market."
But most lacked a "long-term strategy to develop their brand in the market, and they didn't pay enough attention to product quality", causing them to ultimately fail in the US, Li said.
Hisense, which won two creative-product awards at this year's International Consumer Electronics Show in Las Vegas, is determined to be known as "not just another Chinese brand," the executive said.
"We are shooting for advanced technology. If we can't be successful in the US, we can't be successful in the global market."
Another big-name company in China striving to put stereotypes to rest in the US is networking-gear and mobile-phone maker ZTE Corp. The world's No 4 manufacturer of phone handsets has been gaining on competitors in the US market through increased sales of low-cost smartphones.
The lingering negative view of Chinese products' quality has made it hard for ZTE to compete with the likes of Apple Inc. and South Korea's Samsung Electronics Co in the US. As a relative newcomer to the American smartphone market, ZTE lacks the brand cachet of more-established companies.
ZTE, along with Huawei, is also dealing with damage to its image as a result of effectively being frozen out of the US telecommunications market since some members in Congress 2012 cited the companies as potential threats to US national security.
But Neil Shah, an analyst with research firm Strategy Analytics, said last week that ZTE has become the fifth-largest and the fastest-growing smartphone vendor in the US, drawing near to Nos 3 and 4, respectively, Motorola and Research In Motion's Blackberry. That was on the strength of a first-quarter surge of 86 percent in ZTE-made smartphones.
A major reason for Americans' limited awareness of Chinese brands, according to Sperling-Horowitz, is that many Chinese companies are focused on establishing and perfecting their brands at home and haven't dedicated enough resources to marketing in the US and elsewhere. Many companies from China have entered the US other international markets by acquiring Western companies with an existing footprint, rather than launching on their own, the marketing executive said.
But there is room for Chinese companies to improve their marketing strategy, Sperling-Horowitz believes. He said Chinese companies should strive to improve the impression they make at US trade shows by presenting staff members who speak fluent English and distributing brochures and other promotional materials that are free of grammatical mistakes. They also need to improve in telling their success stories, he said.
David Brain, Asia-Pacific president and CEO for public relations firm Edelman Inc, said it takes years to build a country's brand recognition. However, it can take just a few recognized corporate brands to change public perceptions about an entire nation. For example, he said, Hyundai, Samsung, LG and Kia Motors have managed to improve the perception of South Korea.