Markrting

October 2005

The Strategy for Chinese Brands

A series of two white papers

Part 1 – The Perception Challenge

Interbrand 130 Fifth Avenue New York, New York 10011 Telephone: 212 798-7500 www.interbrand.com

The Strategy for Chinese Brands



Jeff Swystun, Global Director jeff.swystun@interbrand.com Fred Burt, Senior Director fred.burt@interbrand.com Annie Ly, Senior Analyst annie.ly@interbrand.com Interbrand

While many companies outside of China contemplate the riches to be made, they must be aware of the increasing competition originating from that country into global markets.

Introduction There are numerous papers, articles, books and television reports on the size and attractiveness of the Chinese market for foreign brands. Interbrand recognizes the interest and importance of the subject and is equally if not more intrigued with the impact Chinese brands will have outside of China. The various brand acquisitions Chinese companies are making globally represents a carefully orchestrated and coordinated strategy. In addition to acquiring recognized, valuable brands, they are absorbing the accompanying expertise in brand management that comes with each deal. So while many companies outside of China contemplate the riches to be made, they must be aware of the increasing competition originating from that country into global markets. This is a deliberate two-pronged strategy for China – organically grow brands that are imbued with new meaning reflecting the changes in China itself, while acquiring the talent, credibility, and equity of established brands. It reflects the transition from a country largely viewed as a land of original-equipment manufacturers (OEMs), one that remains in the background by supplying global brands with unbranded product, to one that creates and manages leading global brands. The strategy is sound and, if well executed, will go a great distance to achieving the policy objective set by the Chinese government. The People’s...