Chinese manufacturers are frequently told that one way to become more profitable is to develop their own brands and invest more in product design. But what's often missing in that advice is how to make that complicated leap.
Some experts at a recent Hong Kong conference offered one piece of seemingly counterintuitive advice for those interested in taking that path: Even if you're going after global markets, don't ignore your local culture for inspiration.
One problem for Chinese firms, they said, is that 30 years of being the world's workshop and making things according to orders from global companies like Nokia and Apple has them downplaying their own cultural influences.
Speaking at the Design for Asia and China conference, held June 22 in Hong Kong, brand-management expert Peter Heskett suggested some of that might be understandable, since “Made in China” often still translates in consumers' minds to poor quality, at least in Western markets.
For example, he said an opinion poll that his firm, New York-based global advertising agency JWT, did of consumers in the United States and the United Kingdom found that Chinese firms are at or near the bottom in consumer perceptions of quality, ethical behavior and environmental responsibility.
Additionally, more than half of those consumers surveyed said they had very little interest in seeing Chinese brands in their stores, Heskett said.
“There is not a strong sense of consideration of Chinese brands,” he said. “Clearly this is a challenge.”
But one solution, he and others said at the conference sponsored by the Hong Kong Design Centre, is not to hide Chinese roots, but rather to look for advantages in them. For example, the survey showed strong interest among Western audiences in topics like traditional Chinese medicine or martial arts.
Or if it's a mass-market consumer product, tackle quality concerns head-on, often with humor, suggested Heskett, who is Southeast Asia planning director for J. Walter Thompson Singapore Pte. Ltd. Heskett advises companies on brand development in India, Southeast Asia and China.
He pointed to a viral marketing video used by Chinese shoemaker Li Ning in the United States, which features a young Chinese man trying to import Li Ning shoes and being harassed by some comically overbearing U.S. government customs inspectors.
At first, the inspectors mock the shoes but then test them out with some acrobatics on a basketball court and decide they're good, and by implication, good enough for the American market.
Heskett also mentioned New Jersey-based shoe brand Ospop, which markets more-expensive versions of China's popular canvas “Liberation” sneakers in Western markets.
Ospop, which uses a circled version of the Chinese character gong, or worker, as one of its corporate logos, embraces its Chinese roots. The firm says prominently on its website that its shoes are “proudly made in China,” and that “China is a nation of industrious, optimistic people creating great opportunities for themselves and for their future.”
Ospop, which stands for One Small Point of Pride, also has a series of videos showing where and how its shoes are made, and detailing contributions to community education efforts.
Industrial designer Eric Chan, who was born in China's Guangdong province and studied in the United States, said Chinese designers too often look at Western examples and “don't have trust in ourselves.”
Companies, he said, have to respect their local heritage to find a voice to be competitive in world markets. Chan heads the well-known New York-based firm Ecco Design Inc.
“You really need to develop your own personality — why is your story relevant?” he said. “Anybody can copy something to make it look like it's from another country, but that is not authentic. Behind the visual there is a lot of thinking.”
As well, he said many Asian firms do a poor job of understanding how products they make are used by customers, and so can't innovate very well, he said. “This is really important for most Asian companies.”
Another expert who has studied brand development in China said Chinese firms are making strides.
Qingdao-based appliance maker Haier Group, for example, has about 15 percent of the U.S. market for microwave ovens, an “enormous development,” said Jan Stael von Holstein, a professor in the College of Design and Innovation at Tongji University in Shanghai.
Haier has had the top market share worldwide among major appliance makers for the last two years, holding 6.1 percent of the market in 2010, according to consulting firm Euromonitor International Ltd.
Also, moves such as Hangzhou, China-based carmaker Zhejiang Geely Holding Group Co. Ltd. buying Sweden's Volvo Car Corp. in 2010 signal new opportunities — if Geely can win the trust of global consumers, he said.
China's rapidly developing car industry, and the country's strong need to develop new technologies like electric vehicles to compensate for its lack of domestic oil production, will fuel innovation, he said.
“There is no reason why China should not have the most amazing car designs in 10 years,” von Holstein said. “They need a different car based on different energy needs … That is just one example where China will move forward and influence the world.”