The strategies of Chinese brands in Europe
Going global is the new-era winning strategy for both Chinese enterprises and for the county to ‘win over’ the world. However in the process of global expansion, Chinese companies face a harsh reality, that is, big name domestic brand is unknown to overseas market.
There are multiple strategies that some Chinese conglomerates are applying to overcome the challenge. Of course, the price is high, usually comes along with hundred billion-yuanbills to pay. In the book of Messrs. Kumar and Steenkamp, eight routes of Chinese companies going global strategies have beendescribed.
The Asian Tortoise Route: Migrating to higher quality and brand premium (Haier, Pearl River Piano)
While electronics maker Haier and Pearl River Piano have some early success traveling this route with China’s low-cost advantage.
By opening its first flagship store outside the mainland on London West End’s tony South Molton Street, Chinese clothing maker Bosideng positioned itself as a premium menswear brand targeted to Europeans.
The Business-to-Consumer Route: Leveraging B2B strength in B2C markets (Galanz, Huawei)
The Diaspora Route: Following emigrants into the world (Mandarin Oriental)
The Brand Acquisition Route: Buying global brands from Western multinationals
Recently, Chinese giants gone on a global shopping spree: Shanghai-based Fosun Group launched a takeover bid for France’s Club Med in May, while pork producer Shuanghui’s has proposed a $7 billion takeover for Smithfield Foods that has potential to become China’s biggest outbound deal. Chinese property and shopping mall builder Dalian Wanda Group forked out $1.6 billion to buy a British yacht maker.
Even with billion dollars in the pocket, managing a brand still is particular challenging for Chinese companies who have little experiences with brand building and brand managing at home. Another concern can be that acquired brands can lose their glamour once they bear Chinese name. Chinese low-cost car makerGeely is a good example of that. Geely tried to distance itself from the Volvo brand it acquired. There’s little mention of the Swedish brand on its website.
The Positive Campaign Route: Overcoming negative country of origin associates (Shanghai Vive)
Shanghai Jahwa, which owns the brand, launched Shanghai Vive, a high-end beauty brand, pitched to compete with European giants such as Chanel.
Shanghai VIVE is trying to capture a larger percentage of that spend for China, with its high price tag, elegant art deco packaging and its boutique in the newly renovated Peace Hotel, a symbol of style and decadence in old Shanghai.
The Cultural Resources Route: Positioning on positive cultural myths (Herborist, Shanghai Tang, Shang Xia)
The Chinese Premium beauty brandHerboristbegan an aggressive expansion strategy, working with a French design & packaging agency (centdegrés) to transform the graphic identity of the brand.The principles of this brand are the Chinese traditional medicine, and the organic cosmetic in Europe.
The Natural Resources Route: Branding commodities in four steps (none from China)
The National Champion Route: Leveraging strong support from the state (China Mobile).
There are a few other approaches to achieve global recognition. One is to invest in advertising. The best example in my view is Emirates Airline, which improves its image by sponsoring large European football clubs.