File photo: IC
As Chinese companies extend their reach abroad after achieving success at home, effective branding is shifting from a "nice to have" to a "business necessity" advantage amid overseas expansion.
To achieve genuine global influence, Chinese enterprises need to translate their tangible strengths — be they manufacturing scales or innovation capabilities — into soft power that is able to impress local consumers and make an impact on business operations, according to marketing experts.
A growing appetite for branching out overseas was clearly seen in a recent survey by global marketing agency Ogilvy of chief marketing officers (or the equivalent) of 40 high-profile Chinese companies.
The research identified the key drivers for Chinese enterprises' outbound expansion as "seeking new markets for growth, easing domestic competition and acquiring advanced technologies". But relatively few were driven to look overseas for branding reasons.
However, branding is increasingly becoming a game-changer in shaping consumer perceptions, especially as a growing protectionist sentiment looms over the global economy, said Chris Reitermann, Asia and China CEO of Ogilvy.
"I do think a lot of companies have underestimated the value of a clearly defined brand in getting people to understand who this company is, what this company does and what its values are," Reitermann said.
The transformed macroeconomic environment is pushing companies to shift from traditional merger and acquisition-based growth to more organic, green-field investment, and that makes a "clearly-defined brand" a necessity, he added.
Deng Delong, global president of Trout & Partners, which specializes in brand positioning, said he believes global distribution of assets will be conducive to the world economy at large. Deng also supports Chinese companies' goals of seeking new growth opportunities abroad.
But instead of recklessly expanding overseas, brands should first identify local needs, position themselves and prove their relevance, he noted.
"Especially against economic uncertainties, a strong and unique brand proposition will give companies unparalleled pricing power. This would put them in an advantageous position even amid trade disputes," Deng said.
Realizing the financial consideration of branding, many Chinese companies are taking a gradual approach by working with overseas partners to make an impact.
K-Boxing, a Chinese manufacturer of menswear, hosted three major garment shows overseas as it looks to tap into local industry players, supply chain partners and international media, said CEO Hong Boming.
"We don't want to just rush into the global scene before we are fully prepared, especially on the branding front," Hong said. "Branding isn't simply about helping sell products to a global audience. It's about conveying the brand DNA, concepts and our unique characteristics."
Other endeavors include teaming up with world-renowned design teams from Italy and the United Kingdom, and rolling out limited-edition, co-branded products in conjunction with Marvel, the global comic and movie brand behemoth, he said.
"To influence is to engage. And it's not a one-off campaign but something ingrained in our business strategy," Hong said.
While many Chinese companies have matured tremendously in their branding strategies, which is reflected in their adjusted setup of marketing functions, there is also increasing sophistication of business leaders in terms of their understanding of branding, Reitermann said.
However, a gap still lies in the discrepancy between the grand vision held by senior executives and various entities within the organization handling day-to-day business, he added.
"That's why it is so important to get the right management model in place and provide the right resources. Without proper resources, branding efforts will forever struggle to get off the ground," he said.
But Reitermann believed learning the value of brand building takes time: "It will probably take Chinese companies another 10 years to get there."