Samsung (from Japan) is one of the most recent examples of a foreign brand that has successfully changed its brand perception in the eyes of many Americans. The success of the Samsung smart phone has enabled Samsung to sell more televisions, cameras and other digital appliances. Kia and Hyundai from South Korea have also gained a reputation for quality and value in the U.S…
As far as Chinese brands go at the consumer level only Lenovo has been able to capture a significant market share and is associated with quality if not quality and value. Remember that Lenovo acquired IBM’s personal computer business way back in 2005 so its U.S. roots are in fact – American!
I have every belief that there will be a number of Chinese brands will ultimately be successful in the United States. What has to happen in China is that the focus will have to be made on quality and not quantity. For a nation of more than 1.3 billion people that’s a major change from what has been going on for the past twenty-plus years.
Old China-hands are all too aware of the short-cuts and taking every opportunity to cut every corner that is the history and the lifeblood of the growth of Chinese businesses. The ‘new’ Chinese government, led by Xi Jinping and Li Keqiang, is well aware of the need for changes in its economic approach. What has yet to become widespread is the introduction of an array of innovative Chinese-made products. The change from a mindset of ‘make things cheaper and faster’ to ‘make things better and cooler’ will take time and by time I mean more than a year or two.
Changing the model from cheaper to better is easier said than done. How Mr. Xi and Mr. Li manage this change will be the critical factor. Does quality over quantity require fewer workers? It’s hard for me to believe that there would be a Chinese economic policy that would result in fewer Chinese jobs.
The Chinese continue to move from the countryside to the city – looking for better paying jobs than are available in their hometowns. At the same time those that have already moved to the cities are tiring of the assembly–line monotony. They want better and more interesting jobs. The answers will likely be found in innovation and a dedication to quality products – something that up until now has not been a hallmark of Chinese manufactured goods.
Will China be able to move toward companies and products that make innovative and quality goods? If so – how long do you think that might take?
Excellent post and great questions. All it will take is one company to innovate and demonstrate that quality adds equity. Brands are nothing more than an agreement among its customers that the experience is consistently and reliably predictable. Simple in concept, but difficult to deliver.
I think that’s true – like in baseball it just takes one! Thanks David.