One of the world’s most high-profile China experts, Shaun Rein made his name by highlighting new trends in the Chinese economy years before the Western media caught on. In 2012, his first book, The End of Cheap China, highlighted that China’s low-cost manufacturing miracle was coming to an end. Two years later, he correctly predicted the rise of a new generation of innovation-led Chinese companies in The End of Copycat China. In his third book, The War for China’s Wallet, he tells us that it has never been more critical for brands to understand the Chinese market.
Companies are dying fast these days. In the 1950s, the average age of a company on the Standard & Poor’s 500 index was 60 years, now it is less than 20. But International Business Machines (IBM), known as “Big Blue”, seems to be an exception. Over the past few decades, it has managed to keep up as others were dying and has successfully transformed itself. Now it has become a provider of cognitive solutions and cloud services. How has such a giant company managed to transform? Gill Zhou, chief marketing officer of IBM China, offers an answer in this interview with CKGSB Knowledge.
If you think ‘Made in China’ is always associated with cheap and low quality goods, think again. DJI—the first choice for any drone fan—is headquartered in Shenzhen and dominates 70% of the consumer drone market globally; Huawei, the telecommunication company that developed its first branded smartphone only five years ago, has already become the third largest player in the sector with a 9.4% market share worldwide, behind Samsung and Apple. In this interview, Doreen Wang, author of the BrandZ Top 30 Chinese Global Brand Builders report, makes sense of China’s “glocalized” brands and the bumpy roads they may face in the future.
China’s apparel market is now one of the fastest growing markets in the world. Euromonitor statistics show many foreign brands doing well: Uniqlo currently holds 1.6% of the market for specialist apparel; and Danish company Bestseller Fashion Group China, which operates brands like Only, Jack & Jones and Vero Moda, is holding 2.3% of the market share. Where are the local apparel brands? VANCL, a Chinese ecommerce clothes retailer, is almost a forgotten name. It used to have a 4.5% market share in 2011, but its dream of IPO lie in ashes—how did the once mighty retailer become China’s diaosi (loser) brand?
Between rapid technological change and global competition, it’s becoming harder for anyone selling a product or service to maintain a competitive edge–especially when that product is more or less the same as everyone else’s. But companies with products caught in this trap have more options than they realize. Even if you can’t win by being the cheapest or the best, you don’t need to simply resign yourself to commodity status. Creating a consumer brand for the industrial commodity, branding the product in a way that makes it familiar to the users, and sometime even raising price can be a positive differentiator.
Having conquered China’s smartphone market, Xiaomi now wants to take over your living room—and the world
Online video platform LeTV believes its new smartphone can demolish competition. Is that too wild an ambition?
University of Minnesota’s Carlos Torelli on how Coca-Cola and Elvis leveraged cultural equity to create brand loyalty.
What industry incumbents can learn from the forces that guide market entry.
Sheena Iyengar, author of The Art of Choosing, on the limitations of choice—and how to choose wisely.