China shaking off stereotype perception of poor quality
ASIA PACIFIC, March 6, 2014 – China ranks #9 overall in research conducted by FutureBrand, Interpublic Group’s global brand consultancy, into the reputation of countries of origin with consumers worldwide. In this inaugural 2014 “Made In” report, three Asian countries
entered the top-ten list of Country of Origin brands, Japan #4, China #9 and South Korea #10. FutureBrand, the largest brand consultancy in Asia Pacific, released the “Made In” report and “Made In China” addendum today in Shanghai.
FutureBrand President, Asia Pacific, Sarah Reiter explained: “Country of Origin serves as an important heuristic that provides consumers with a frame of reference to guide their brand choices. Based on our research, where a product ‘originates from’ is more important to consumers than its price, availability or style.” Country of Origin has multiple layers of definitions. These include where raw materials are sourced, where the product is designed, where manufacturing takes place, where final assembly is completed, and finally, where the company is incorporated.
Overall, China was ranked #9 as Country of Origin and performed most strongly in the electronics (#5), automotive (#9), and fashion (#10) sectors. Sarah Reiter comments: “This is good news for China business and brands, which are shrugging off negative stereotypes, ‘cheap, low-skill, low-tech’. Like Taiwan and Japan in previous decades, China is now shifting towards being associated with ‘modern, sophisticated, high-tech’.”
Some of the companies at the forefront of changing the China’s stereotype perception are technology companies, such as Alibaba, Xiaomi and Lenovo, carmaker Geely and meat producer Shuanghui (now WH Holdings). These companies have mostly come to global prominence through major strategic acquisitions of foreign firms, such as Lenovo’s acquisition of IBM’s ThinkPad and Geely’s marriage with Volvo, through which they upgraded their brand perception. However, Xiaomi, the maker of affordable, but feature-rich devices, is a homegrown business and represents a new generation of Chinese brands. It is ranked on #3 of Fast Company’s 2014 Most Innovative Companies list and also features on BCG’s list of innovative enterprises.
However, while global consumer perceptions of “Made In China” are indisputably changing, Chinese companies will have to pull key three strategic levers if they want to continue to shift consumer preferences. These include building Chinese global power brands as origin ambassadors, building country of origin into domestic products and brands, and focusing on three growth drivers: increased expertise in key industries, heightened authenticity of Chinese brands, and greater reference to “City of Origin”, rather than “Country of Origin.”
“Based on these insights, it is clear that China’s future challenge will be to build its own brands, not just products or corporations, that have real emotional appeal for consumers. This means both focusing on delivering ‘authenticity’, a key driver of consumer preference, as well as understanding when, where and how to leverage China’s unique Country of Origin for its own future brands,” Reiter concluded.