As the Chinese economy maintains its phenomenal growth, Duncan Grimes asks how can qualitative research help Chinese brands grow here in the UK?
2012 is the year of the Dragon, one of the most soughtafter birth signs in the Chinese zodiac, symbolising success, enthusiasm and good fortune. These lunar predictions could foreshadow another big year for the Chinese economy.
JWT recently predicted the rise of Chinese brands in worldwide markets as one of its 2012 trends, in which case qualitative research should begin to think about how it can add value to those with sufficient courage to enter the UK market.
China has been the fastest growing economy for the last 30 years and is now the second largest in the world, so you didn't need to be Mystic Meg to see this one coming. Despite this economic success, however, awareness by the general public of Chinese brands outside of China remains low, so the prediction may be bolder than it seems.
Last year there were 12 Chinese brands on Millward Brown's 100 most valuable brands list, yet 80% of consumers outside China failed to name one of them. This level of global brand awareness hardly matches its economic standing, nor does it suggest a global audience that is demanding more Chinese brands. So, as China shifts from the world's manufacturer to become the world's consumer as well, can it also become the world's marketer and brand innovator? Perhaps this could be the year China makes this step.
Value for money tag
So what are the challenges? And why hasn't this happened sooner? Recent research conducted by TNS and HK4A suggests that the term "made in China" successfully communicates value for money but fails to communicate trust and quality.
It is argued that this makes Chinese brands potentially successful in emerging markets, but presents significant barriers to penetrating European and American markets, where a stigma of low quality still haunts the country's products.
This conclusion is supported by the fact that so far the most successful Chinese brands worldwide have decided to de-emphasise the country of origin. Lenovo has aligned itself with IBM and Haier created Haier America to sell outside of China; both feeling that the "made in China" message won't help an electronics brand build a relationship of trust and reliability with the consumer.
This trend is continued by recent news of a Chinese brand attempting to break into a product category where trust and safety is certainly a key purchase driver: condoms. Despite outperforming leading brands in safety tests, the Chinese condom manufacturer Safedom believes that it needs a European brand for success outside of China, and is currently seeking a European partner to this end.
Importance of aesthetics
This approach is even being adopted by products where trust and reliability are less important than aesthetics and brand identity. The trainer brand Feiyue was established in Shanghai in the 1920s, with a design particularly suited to martial arts.
Popularised by Shaolin monks, the brand achieved cult status but this interesting brand story has not been used to communicate with consumers outside of China. Instead, to grow beyond the country's borders the brand has partnered with a French firm to communicate a more fashionable French image, one that moves away from its traditional roots.
If, as predicted, Chinese brands are really going to make an impact worldwide this year then they need to develop the confidence to communicate directly with global consumers about these roots.
Qualitative research has a key role to play here in uncovering what the essence of being "Chinese" means to consumers in local markets. It will also have a similar role in determining what kind of brand values that communicates in terms of country-of-origin effect.
Fitting the American dream
Li-Ning has begun to do this is in the US. The sports brand makes no secret of its origins, but communicates it in a way that fits American values. Marketing communications tell the story of one man's passion and drive to succeed, which fits well with the American dream. Even its advertising makes a tongue-in-cheek reference to US perceptions of the inferior quality of Chinese goods. Li-Ning is managing to communicate directly with consumers there with a perception of "made in China" that is relevant to them.
So far, no Chinese brand seems to have managed this in the UK. And maybe the notion that "made in China" is a universally bad proposition is worthy of challenge here. Over the last 30 years the country has undergone several transformations, yet none of these seemed to have affected the significant negative perceptions of Chinese products that exist. Could it be time for qualitative research to test exactly what the perceptions of "made in China" is, whether quality is still an issue, and if so, how?
What is "brand China"?
In a recent interview with the BBC, Mike Amour, CEO of Project Worldwide Asia Pacific, argued that Chinese brands need to first decide to what "brand China" is all about. They have a great opportunity to "positively and proactively engage people about its values, history, culture and critically — its ambitions". Amour takes the long view, by comparing how Japanese goods broke into Western markets in the 1980s despite significant negative associations with the country after the Second World War. He argues that it took the success of one brand to change the negative perceptions of "Japaneseness" into a strong asset: Sony.
Once Chinese brands develop an identity and set of values to communicate worldwide, it is the challenge of qualitative research in the UK to unpick how these values can be made relevant to UK consumers across different categories. The opportunity appears to be there for a Chinese brand to break the UK market in 2012. Maybe this time next year we will all be able to see the brand that has managed to do it.
Research Manager, YouGov
This article was first published in InBrief magazine, April 2012
Copyright © Association for Qualitative Research, 2012