The Great Brand of China

While China bashing took center stage during this presidential election, with both candidates blaming the Eastern power for U.S. economic woes, things are a little different on the consumer front. Big brands from China, including Lenovo computers, Li-Ning sneakers and Haier appliances, have been steadily moving into the American marketplace with the goal of one day toppling giants Nike, Apple and General Electric. “Emerging global giants from China will become the most formidable competitors of the future for many Western firms,” said David Hartman, China practice director at Blue Canyon Partners, a b-to-b consultancy. “These China-based companies are very effective at capitalizing on the investments made by other early-bird firms that introduce technologies and products.” Now they are turning their attention to brand building. In early October, Beijing-based Li-Ning signed Miami Heat guard Dwyane Wade as an endorser and minority owner. Wade joins the brand’s other NBA pitchman, Evan Turner of the Philadelphia 76ers. Since bringing on Wade, “we’ve seen an uptick in Twitter followers, Facebook friends and direct traffic to the brand’s website,” said Ray Grady, gm, Digital Li-Ning USA. Li-Ning boasts more than 24,300 followers on Twitter and 372,000 Facebook friends. Li-Ning, which reported 2011 global revenue of $1.4 billion, also launched a promotional site in March of this year with the slogan “Straight Out of New China.” So far, the scapegoating of China has yet to impact Li-Ning. “The people engaged in that rhetoric are not our customers,” Grady said. “Our brand talks about new world thinkers and the new China.” He added, “Our audience is younger Americans with global interests. They are not afraid of China.” Lenovo, which bought IBM’s ThinkPad in 2005, was sixth place in market share in the U.S. two years ago but today has moved up to fourth place, per research firm Gartner. Since Lenovo launched its “For Those Who Do” campaign 18 months ago, the purchase-consideration rate among its U.S. target has soared 272 percent, per Lenovo CMO David Roman. Sales are also up. Last quarter, year-over-year unit sales in the U.S. rose 10 percent to 1.36 million. Though little known in the U.S., China’s Haier is the leading home appliance brand in the world, per Euromonitor. The company, whose rep declined to comment, learned about U.S. customers by selling low-priced products in big-box retail stores, said strategist Hartman. In the last five years, Haier America has upgraded its websites, moved heavily into social media, rolled out family-oriented digital promotions and thrown its support behind the National Parks Conservation Association. Like other China-based companies, it has an affinity for American sports and has forged a marketing partnership with the NBA. Unlike other companies, however, the Haier America website makes no reference to its China roots. The rhetoric may be having lesser impact. “It is still pretty common for Americans to think of China as communist, big and scary, but that is changing,” said David Srere, co-president and CEO of brand consultancy Siegel+Gale. “Right now, China is just an easy political target,” he added, but that won’t damage Chinese brands in the U.S. in the long term.

Brand Marketing

The Great Brand of China

The Eastern power aims to become a formidable player in the U.S. marketplace

Joan Voight

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Joan Voight