Tuesday September 21, 6:14 PM
REUTERS SUMMIT-China tech firms seek global brand recognition
By Godwin Chellam
SHANGHAI, Sept 21 (Reuters) - They are household names in their home market, but China's Ningbo Bird , Haier and Lenovo face a mammoth task to take the big step onto the world stage.
Flush with cash after years of strong economic growth, the trio, along with other Chinese firms, are turning their resources and willpower to building up their brands in the global market.
Ningbo Bird Co. Ltd., China's top domestic cellphone maker, is counting on its alliance with German conglomerate Siemens AG ; appliance giant Haier is building a global name for itself with mini-fridges; and Lenovo Group Ltd. is hoping its new name will appeal to computer buyers.
But experts say quality issues, poor identities and brand names that sometimes sound like gobbledygook to foreigners hamper progress. White-goods maker Wuxi Little Swan hardly has the cachet of a brand like Samsung.
"In the long term, there's not much to gain from producing unbranded goods for other people. As soon as someone else can make it cheaper and/or better, your market's gone," said Terence Oliver, Asia Pacific chief executive of brand consultancy Interbrand.
"What a brand does is guarantee, as far as you can guarantee anything in this uncertain world, flows of revenues into the company going forward."
Ningbo Bird, Lenovo -- which changed its name from Legend this year -- and Haier were voted the country's most valuable brand names by the Chinese edition of Forbes magazine in January.
OFF THE GLOBAL RADAR
Others Chinese brands mentioned as potential global players include Zhongxing Telecom, better known as ZTE , and TV makers Skyworth Digital and Shenzhen Konka Group .
But even China's top brands are well off the global radar. Outside of Japan, South Korea's Samsung Electronics Co. Ltd. is the only Asian company among the world's top 100 brands, according to an annual list compiled by BusinessWeek magazine and Interbrand.
China's top telecoms equipment maker, Huawei Technologies Co. Ltd., acknowledges the hurdles.
"It's been a big challenge, for both Huawei and other Chinese companies, to build our brands overseas," Xu Zhijun, a Huawei president, said at the Reuters Asia Technology Summit on Tuesday.
"In the past, many potential customers had never been to China before and thought we all still wore ponytails. We have to expend 10 times as much effort to get brand recognition."
Some companies have decided to eschew the time-consuming process of brand development by partnering with foreign brands down on their luck and in need of re-invigorating.
Electronics giant TCL Corp. has perfected this method, agreeing to take control of the television assets of France's Thomson -- owner of the original RCA TV brand -- and the mobile phone unit of France's Alcatel .
Konka has said it is also close to a deal for a similar partnership.
SOPHISTICATION REQUIRED
Branding and marketing can be a hard sell to Chinese companies whose key advantage over foreign rivals is often their low costs. Oliver said Japanese car companies spend up to $300 million a year on branding, including marketing and advertising.
"Only a minority understand branding but that's increasing. Branding is coming of age in China," said Tom Manning, director of consultants Bain & Co. Inc.
"Going global certainly involves branding, but also an understanding of the foreign market. It requires an additional level of sophistication which only a few will understand," he said at the Reuters summit.
Those few would appear to include Huawei, whose name (pronounced HWAH-way) features prominently at the corner of every page in the business technology directory in Singapore. That gives it an almost local standing in the technology-savvy island.
Brand advertisements for Haier feature prominently in many of the world's major airports. In the past year, Haier has invested in a Brazilian manufacturing plant and a midtown New York U.S. headquarters, and is poised to introduce advanced mobile phones in the world's biggest consumer market.
"Chinese technology may lack some features and not be there now, but there is no question it will be in the future. I tell my engineers that every day," said Christian Reinaudo, Asia-Pacific president of France's Alcatel .