F - Remaking Made in China - 08.14.2012 PDF

REMAKING
‘MADE IN CHINA’
August 2012
Image credit: Jessica Vaughn
WHAT WE’LL
TABLE OF CONTENTS
COVER (cont’d.)
Executive Summary......................................................................................................... 3
Remaking “Made in China”............................................................................................... 4

• Introduction................................................................................................................ 5
External Roadblocks to Expansion..................................................................................... 6

• “Made in China” = low quality ........................................................................................ 7
• Safety is a key concern................................................................................................... 8
• Fake products fuel copycat image...................................................................................... 8
• Sustainability, labor also key concerns................................................................................. 9
• Little differentiation between “Poorly manufactured in China” and “Branded in China”.................. 10
• Low awareness of Chinese brands.................................................................................... 10
• Adversarial political and economic relationship................................................................... 11
Internal Roadblocks to Expansion ................................................................................... 12

• Corporate structure and management style .................................................................... 13
• Lack of brand-building innovation.................................................................................... 13
• Lack of international experience..................................................................................... 14
• Failure to conquer home turf......................................................................................... 15
Overcoming the Roadblocks........................................................................................... 16

• Take back “Made in China” .......................................................................................... 17
• Compete at a world-class level....................................................................................... 18
• Lean into national identity............................................................................................ 20
• Tap into the Millennial worldview.................................................................................... 23
• Drive innovation and lead categories................................................................................ 25
• Ride on international brand coattails................................................................................ 27
• Become a leader in CSR................................................................................................ 28
Conclusion................................................................................................................... 30
Appendix..................................................................................................................... 32
• More About Our Experts/Influencers................................................................................. 32
• Additional Charts........................................................................................................ 34
A note to readers: To make the report easy to navigate, we’ve added hyperlinks to the Table of Contents, so you can
jump immediately to the items that most interest you (or, alternatively, you can read the material straight through).
This is a report from JWTIntelligence. Go to JWTIntelligence.com to download this and other trend research.
2
WHAT WE’LLSUMMARY
EXECUTIVE COVER (cont’d.)
China is the globe’s most populous country and its second biggest economy (one that’s forecast to move ahead of the
U.S. in another 15 years). But by and large, its brands haven’t yet made a notable impact on the global consumer
market. That may well change in the near future: China is actively seeking to export more than just the rest of the
world’s manufactured goods and to develop strong brands that can hold their own both at home and on the world stage.
Chinese brands face an uphill battle, with an array of external and internal forces currently hindering their efforts to
take root internationally. This report details those roadblocks, spotlighting the array of negative perceptions among
Western consumers—starting with their low regard for the “Made in China” label—as well as key reasons why many
Chinese firms aren’t yet innovative, flat and flexible enough to compete with global brands.
“Remaking ‘Made in China’” also takes a look at some of the strategies that leading Chinese brands, from Lenovo and
Li-Ning to Haier and Huawei, are deploying to knock down these roadblocks. As we move into what many forecast will be
a “Chinese Century,” there is tremendous potential for China’s savviest marketers to break through.
Methodology
All our trend reports are the result of quantitative, qualitative and desk research conducted by JWTIntelligence
throughout the year. Specifically for this report, we conducted on-the-ground research in Shanghai, Beijing and Hong
Kong. We also fielded a quantitative study in the U.S. and the U.K. using SONAR™, JWT’s proprietary online tool, from
May 31-June 4, 2012; we surveyed 503 Americans and 503 Britons aged 18-plus. In addition, we interviewed four relevant
experts and influencers.
This report builds upon “Journey to the West,” a 2011 report researched and written by Pete Heskett, Southeast Asia area
director for JWT. Special thanks to Pete, along with Tom Doctoroff, Eva Zhang and colleagues at JWT Shanghai, for their
assistance and insights.
EXPERTS AND INFLUENCERS*

JOSEPH BALADI, HOWIE LAU,
CEO of BrandAsian, author of VP of marketing and communications for
The Brutal Truth About Asian Branding Asia Pacific and Latin America, Lenovo
TOM DOCTOROFF, DOUGLAS YOUNG,

JWT North Asia area director and co-founder of Hong Kong-based lifestyle
Greater China CEO, author of brand Goods of Desire
What Chinese Want
*See Appendix to learn more about these experts and influencers.
3
REMAKING ‘MADE IN CHINA’
As China starts to export more than just the world’s manufactured goods, we’ll see a push to change
perceptions around what it means to be “Made in China.” Already a leading crop of businesses are
chipping away at some of the key issues standing between Chinese brands and global success.
The shift from China as the world’s factory to China as a

brand creator and marketer … is well underway.”
—DAVID ROTH, CEO, EMEA and Asia, The Store, WPP,
BrandZ Top 50 Most Valuable Chinese Brands, 2012
Image credit: Jessica Vaughn 4

WHAT WE’LL
REMAKING ‘MADE
COVER
IN (cont’d.)
CHINA’ (cont’d.)
Introduction: China is the globe’s most populous country—home to 1.34 billion people—and the world’s second biggest economy
(it unseated Japan from the No. 2 spot last year). It’s forecast to move ahead of the U.S. in another 15 years. But by and large,
China brands haven’t yet made a notable impact on the global consumer market.
During much of the 20th century, China served as a manufacturing center for international brands, developing few of its own for
export markets. Meanwhile, “Made in China” became synonymous with cheap, mass-produced, low-quality goods. But now, three
decades after the Communist country opened up and instituted market reforms, China is looking to export more than just the
rest of the world’s manufactured goods. We’re seeing a new focus on developing strong brands that can hold their own both at
home and on the world stage.
It’s a tall order, given that Chinese businesses have little experience developing the type of brands that dominate on the global
stage. The result is that Chinese brands tend to lack equity in the domestic market. They have yet to gain enough status to earn
a price premium over global counterparts. Not only that, but Chinese labels are still tainted by association with shoddy Chinese
manufacturing. Consumers in developed markets are skeptical at best of Chinese products.
Still, there is tremendous potential. Japan, Korea and Germany are among the nations whose brands have overcome hostile
or skeptical consumer perceptions. It was once seen as down-market to “buy Japanese,” for example, but today few shoppers
consider “Made in Japan” a negative. And in our hyper-connected, globalized, fast-moving world, the journey from negative to
positive perceptions can be significantly shorter than it once was. Millennials already have a very different image of China than
the outdated associations that may linger among older consumers. And the youngest consumers, Gen Z, have only known China as
a rapidly modernizing economic giant.
China’s brands have seen an “explosion of value,” as BrandZ recently noted, due to factors including a booming and increasingly
discerning middle class, product commoditization, efforts to drive homegrown business and heated domestic competition (from
both local and international companies). While we found very low awareness of Chinese brands among American and British
consumers, they may already be customers of the leading crop of Chinese labels. Among them:
• Lenovo, expected to become the world’s largest PC

manufacturer this year. The company, which launched its Within the next 10 years, we are
first global branding campaign last year, garnered global
going to transition to a ‘Chinese
attention when it bought IBM’s PC division for $1.75
Century’ … relative to an American
billion in 2005.
benchmark. That means we are
• Huawei, which recently slipped past Ericsson to become going to have great Chinese brands,
the world’s largest telecom-equipment vendor and both commercial business Chinese brands as well
ranked among the world’s top three patent applicants in
as cultural brands, because that’s what defined
2011 (fellow Chinese firm ZTE took the top spot).
the U.S.” —JOSEPH BALADI, CEO of BrandAsian,
author of The Brutal Truth About Asian Branding
• Haier, which currently holds the largest share of the
global appliance market (close to 8% of the sector).
As China finds its footing as a superpower, some are forecasting that this will be the “Chinese Century,” not only because of
China’s political and economic power but also because its worldview and values will influence consumers everywhere (much as
American values and culture have). As perceptions of China align with this new status quo, and as its marketers find ways to
knock down the obstacles to global expansion, expect some new, possibly formidable rivals to today’s global consumer brands.
5
EXTERNAL ROADBLOCKS
TO EXPANSION
In recent years, some Chinese brands have been venturing outside China’s borders, finding great success
in emerging markets—for instance, Chinese car exports were up 43% year-over-year in May, with the
majority of demand coming from Algeria, Brazil, Iran, Russia, Saudi Arabia and South Africa. Now, a few
Chinese companies are looking beyond the developing world in a bid to build global brands. But in more
developed, Western economies, they face an uphill battle.

WHAT WE’LL
EXTERNAL ROADBLOCKS
COVER (cont’d.)TO EXPANSION (cont’d.)
“Made in China” = low quality: Though China is no longer the top spot for cheap manufacturing—its rising labor costs
have pushed many companies to shift their outsourcing to countries such as Vietnam and Cambodia—decades of poorly
manufactured products from China have left a scar on consumer perceptions. Comparing perceptions of “Made in China”
with “Made in Japan” or “Made in the USA” points to a wide gap to be crossed by Chinese brands.
While around half of respondents to our survey said American- or Japanese-made goods are reliable and high-quality, fewer
than a fifth said the same of “Made in China” brands. Rather, most people associate negative product attributes with Chinese-
made goods, including mass-produced (65%) and cheap (56%).
By contrast, a far smaller percentage view “Made in the USA” as mass-produced (31%) and cheap (8%). Instead, many
consumers see American and Japanese goods as well-designed and as stylish (especially in the case of USA brands). (See Figure
1A; for country and generation breakdowns, see Appendix, Figures 1E-1M.)
FIGURE 1A:
Country manufacturer impressions (U.S. and U.K.)
Percentage of American and British adults who associate the following traits with products made in
China, Japan and America
Made in China Made in Japan Made in the USA
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
Low-class Impressive
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
Environmentally Well-
sound Ethical designed
7
WHAT WE’LL
EXTERNAL ROADBLOCKS
COVER (cont’d.)TO EXPANSION (cont’d.)
Chinese are cunning at marketing Safety is a key concern: While perceptions of Chinese-made
products of very low quality but mass- goods as poor quality have persisted for decades, questions
about their safety have only built in recent years, both
produced even when they know the
domestically and internationally. Large-scale recalls have
products are faulty.” —Male, U.K., JWT SONAR™
made headlines worldwide. Mattel recalled 9 million toys,
including Barbie and Polly Pocket dolls, in 2007 due to lead
It’s not really important to me where paint and magnets that posed choking hazards; countries
products I buy are made. Probably I around the world banned Chinese milk products after recalls
own a lot of things that are made in by several Chinese dairy companies in 2008; 54 high-speed
trains, meant to symbolize China’s sweeping modernization
China without realising it, but my impression, right
push, were recalled last year.
or wrong, is it’s not good quality.”
—Female, U.K., JWT SONAR™ In our survey, 46% of respondents cited poor safety standards
as an attribute of Chinese products, compared with only 9%
who said the same of American-made goods. (See Figure 1A.)
I am disappointed with items made in
Around 4 in 10 consumers in our survey (and more than half
China and sold in the U.S.”
of Americans) said they have low opinions of Chinese brands
—Female, U.S., JWT SONAR™
because of recalls. And half of respondents agreed with the
statement, “Chinese brands aren’t portrayed very well in the
I know not all Chinese products are bad, news/media,” citing this as a key reason for their low opinion
but in general I think China has very of Chinese brands. (See Figure 1C; for country breakdowns,
see Appendix, Figures 1P-1Q.)
poor quality regulatory standards for
products. I’m not keen to try Chinese products until
this improves.” —Male, U.S., JWT SONAR™
Fake products fuel copycat image: Distrust is also driven by news about
an abundance of fakes: not simply counterfeit handbags and watches but
everything from plastic rice and chemically made eggs to forged university
acceptance letters, imitation medicines and even a chain of faux Apple
stores so authentic that even employees believed they worked for the
California company.
Such reports not only drive skepticism but help to perpetuate the notion that
Chinese products are copycats, lacking good design, style and originality. While
nearly half our survey respondents felt that American- and Japanese-made goods
are well-designed, only 18% said the same of Chinese goods. Similarly, just 12% agreed Chinese goods are stylish, compared to
45% for American goods and 36% for Japanese products. And while more than a third of consumers felt American and Japanese
manufacturers create products that are new and different, only 15% of respondents said the same about Chinese products. (See
Figure 1A; for country and generation breakdowns, see Appendix, Figures 1E-1M.)
Perhaps this is why 34% of respondents agreed that “I’m not very impressed with Chinese companies in general.” (See Figure 1C;
for country breakdowns, see Appendix, Figures 1P-1Q.)

EXTERNAL ROADBLOCKS TO EXPANSION (cont’d.)
Sustainability, labor also key concerns: With consumers hearing much about things like the heavy smog hovering over Beijing
and conditions at Apple’s China-based Foxconn factory, concerns about environmental and labor practices have been further
degrading perceptions of Chinese products.
In our survey, Chinese manufacturers scored by far the lowest in terms of environmentally sound practices. (See Figure 1A;
for country and generation breakdowns, see Appendix, Figures 1E-1M.) And environmental practices and workers’ rights,
when measured for influence, all have a significant negative effect on consumer opinion of China. (See Figure 1B; for country
breakdowns, see Appendix, Figures 1N-1O.)
FIGURE 1B:
Factors that influence consumer opinion of China (U.S. and U.K.)
Extent to which each of the following impact American and British opinions of China
BIG IMPACT
Chinese human
rights policies Chinese environmental
practices
Chinese workers’ rights China’s global influence

Chinese government on the economy
News/media coverage Chinese restaurants

about China Traditional Chinese/
herbal medicine
Chinese manufacturers
(“Made in China”)
NEGATIVE Average Chinese citizen POSITIVE
OPINION OPINION
Chinese
celebrities
Chinese philosophy Chinese
martial arts
Chinese brands Beijing Olympics
Chinese-American celebrities opening ceremony
Chinese films
Chinese Olympic athletes
Chinese-American athletes
SMALL IMPACT
9
Little differentiation between “Poorly manufactured in FIGURE 1C:

China” and “Branded in China”: Consumers, most of whom Reasons for low opinion of Chinese
haven’t personally had negative experiences with Chinese brands (U.S. and U.K.)
brands, are simply carrying over their negative perceptions Percentage of American and British adults
who agree with each of the following
of Chinese-made onto Chinese-branded. When respondents
Millennials (18-34) Gen X (35-47) Boomers (48-67)
were asked to choose which phrases they associate with
Chinese brands, the top three responses were “mass-
52
produced,” “cheap” and “poor safety standards”—echoing Chinese brands aren’t
consumer sentiment around “Made in China.” (See page
portrayed very well in 48 51%
the news/media
23, Figure 2C; for full list and country breakdowns, see 54
Appendix, Figures 2I-2K.)

I am not impressed 46
with products that
When respondents with poor perceptions of Chinese brands are “made in China”
and feel Chinese
51 51%
were asked why they had such low opinions, just over brands would be a
55
half agreed with the statement, “I am not impressed with similar quality
products that are ‘Made in China’ and feel Chinese brands

47 37
would be a similar quality.” Only 28% of consumers with
low opinions of Chinese brands had personally had bad
Items made in China
tend to get recalled
37 38%
experiences with a Chinese label. (See Figure 1C; for country 40
breakdowns, see Appendix, Figures 1P-1Q.)
35
Low awareness of Chinese brands: Despite the heft of some I have personally had
Chinese companies, our research found relatively low awareness a bad experience with 22 28%
Chinese brands
of Chinese brands in both the U.S. and the U.K. When presented 26
with a list of 40 heavyweight Chinese brands, a plurality of
respondents (36%) had never heard of any of them. Only a
30
I’m not very
quarter were familiar with Lenovo, currently the world’s second impressed with
Chinese companies
34 34%
largest computer manufacturer after HP. (See Appendix, Figures
in general
39
1T-1V.) The most recognized brand, Air China, didn’t fare much
better, with 28% of respondents recognizing the name.
Image credit: twicepix 10

FIGURE 1D: Adversarial political and economic relationship: Further

Attitudes toward China’s economy hampering the landing of Chinese brands on Western shores is
and government (U.S. and U.K.) a legacy of complicated Sino-Western relations, coupled with
Percentage of American and British adults an escalating sense of economic rivalry as China booms while
who agree with each of the following much of the West grapples with fiscal woes. There are even
Millennials (18-34) Gen X (35-47) Boomers (48-67) fears of economic espionage, with reports of Chinese hackers
attempting to steal information from companies such as
57 DuPont, Nortel and Google.
The rise of the
Chinese economy in
comparison to ours
64 62%
makes me anxious
While China’s government has opened up to elements of
66
capitalism, anti-Communist sentiment remains strong, with 70%
of American and 64% of British respondents stating they are wary
53
I am anxious about of China because it is Communist. A majority of consumers also
increased Chinese
investment
54 57% said the rise of China’s economy makes them anxious (62%), as
in my country
63 does increased Chinese investment in their country (57%). (See
Figure 1D; for country breakdowns, see Appendix, Figures 1R-1S.)
47 66
When measured for influence, these factors have a significant
I am wary that China
is a Communist nation
69 67% negative impact on consumer perceptions of China. (See Figure
67 1B; for country breakdowns, see Appendix, Figures 1N-1O.)
And in the U.S., it’s likely that anti-China sentiment will only
50 escalate in the run-up to the presidential election.
I support political/
government 47 44%
deals in China
36
51
China is taking
away all of the 52 53%
jobs in my country
57
61
I would work for a
Chinese company that
opened up an office
63 60%
in my country
56
With so much China-bashing going

on, it seems hard for Chinese
brands to deliver the message that
they are not threatening, and come in profit-
orientated goodwill.” —JENNY CHAN, “China’s
brands head West,” Campaign, April 2012

INTERNAL ROADBLOCKS
TO EXPANSION
Roadblocks to expansion for Chinese brands are not solely external. More of China’s state-run and
privately owned enterprises alike will need to learn how to innovate if they’re to compete in global
markets—indeed, even if they’re to compete against multinationals at home. Rigid corporate structures
and a reluctance to try different ways of doing business prevent new ideas from emerging and flourishing,
and the focus is on narrow, short-term goals rather than a longer-term view. The result is weak brand
equity, one reason why domestic consumers tend to prefer Western labels.
Plus, Chinese firms tend to make the leap overseas before developing a long-term global strategy and
expansion plans, according to the Brooking Institution. Instead, the decision is based on government
mandates to go global (or face penalties) and a desire to chase profits and invest “pent-up” cash.

WHAT WE’LL
INTERNAL ROADBLOCKS
COVER (cont’d.)
TO EXPANSION (cont’d.)
Corporate structure and management style: Chief among Whether it’s a family company or
the internal roadblocks to expansion is the hierarchical a multinational, the CEO is the
structure of China’s companies, even among midsize,
predominant voice in the company.
relatively new and innovative companies. The CEO
Nobody questions the CEO. He is
reigns supreme, his or her authority and judgment never
challenged or questioned in China’s corporate culture.
omnipresent, omni-seeing; he’s omni-
(Plus, many of China’s state-owned enterprises have ties to powerful. So that creates an issue in terms of internal
the Communist Party, with CEOs appointed by a party body.) communication. … Right now in meetings you have
a silent group of Asians who aren’t willing to ask
This leads to a stifling of ideas and communication,
questions, aren’t willing to express themselves,
especially from the most junior employees—who may be
the ones with experience working or studying in the West, because they’re not willing to expose themselves or
where they pick up soft skills such as decision-making take a risk in being wrong. So nobody talks.”
and working in team environments. “The decision-making —JOSEPH BALADI, CEO of BrandAsian, author of
The Brutal Truth About Asian Branding
apparatuses of these companies are very rigid,” explains
JWT’s Tom Doctoroff, JWT North Asia area director and
Greater China CEO, in his recent book, What Chinese Want. One way of defining [innovation] would
“They are traditional in outlook and management structures, be as fresh thinking that creates value
and frown upon entrepreneurial thinking and the risk-taking
people will pay for. By that measure,
required that generates innovation.”
China is no world-beater. Though its sweat produces
A rigid corporate structure also means that projects face many of the world’s goods, it is designers in
many layers of navigation before they can be executed. Jenny Scandinavia and marketers in California who create
Chan explained in Campaign, “The culture of red tape and and capture most of the value from those products.”
bureaucracy associated with the Middle Kingdom is permeating
—“From Brawn to Brain,”
through to how Chinese brands behave.” By contrast, today’s The Economist, March 10, 2012
fast-moving, hyper-competitive world requires companies to
operate as lean and nimble machines. Competition in developed
To complicate matters further, Chinese managers tend international markets requires a
to flip-flop, constantly changing course, which fosters price premium, rooted in both
employee anxiety; there’s limited interaction among value-added—not parity—products
departments; and marketing units fall lower on the totem or services and strong brand equity.
pole than sales teams, which tend to control budgets.
The last can be acquired only gradually over
Lack of brand-building innovation: Though China has seen time. In these respects, Chinese brands are still
a sharp increase in research and development spending, disadvantaged, in many cases grievously so, and not
as well as an uptick in patent filings—two indicators just by a generic fear of anything ‘Made in China.’”
typically used to measure innovation efforts—most Chinese —TOM DOCTOROFF, JWT North Asia area director and
companies have yet to foster a culture of innovation that Greater China CEO, author of What Chinese Want
helps to build brand equity.
Instead, marketers put their innovation efforts toward product and package design, and tend to excel at development:
creating incremental improvements to existing products and services and driving scale. Companies focus on tweaks that can
be easily measured and tied to tangible results—a logical emphasis in a hierarchical business culture that fears instability. But
it’s unlikely businesses will be able to create products and services that command higher price points without broadening the
focus of their R&D.
13
WHAT WE’LL
INTERNAL ROADBLOCKS
COVER (cont’d.)
China’s current five-year plan aims to

foster innovation in seven strategic
industries, and the government has
instituted incentives to lure scientists
and researchers home after they earn
degrees overseas. But officials tend to
dole out research grants for projects that
have a similar timeline as the tenure of
bureaucrats, “thus sacrificing long-term
horizons for short-term gains,” as Mike
Chao, former senior principal at Boston
Consulting Group, told Knowledge@-
Wharton. By contrast, research that
leads to innovation requires a long-
range commitment and vision, making
allowances for dead ends and circuitous
paths to success.
A number of other issues prevent a culture of provocative research from taking hold. As with big firms, the research community
is characterized by respect for the command chain and senior-level positions; this tends to squelch those with nonconformist
ideas, and there’s not much funding for merit-based research. And researchers say that government-issued funds come with rigid
guidelines that severely limit their ability to change course in accordance with new developments in their field, according to
R&D Magazine. Issues of loose IP protection, plagiarism and phony research also plague the profession.
Privately funded research may not face some of these issues, but companies that aren’t state-run still have to battle poorly
enforced IP and antitrust legislation. Plus, state-run banks favor “national champions” over lesser-known companies. Still,
smaller private businesses, usually in fashion or food and beverage, have done a better job of fostering a culture of innovation,
according to Doctoroff, but they lack the capabilities to manage global expansion.
Lack of international experience: As with most novices, another issue is simply lack of experience—doing business in China is
typically very different from doing business in most other markets. Scott Kennedy, director of the Research Center for Chinese
Politics & Business at Indiana University Bloomington, explained to Reuters: “Chinese companies, when they first go abroad,
expect it to be a lot like expanding in China—they go talk to the party secretary or mayor first, make sure they are happy, and
that paves the way for everything else. Americans and [others] typically don’t roll out the official red carpet, and Chinese are
not prepared for that.”
Expansion is especially challenging for private It is a catch-22: Companies big enough

enterprises, as state-run companies typically receive to go global are the most encumbered
government assistance when venturing overseas, in
by commoditized products and services.
terms of navigating unfamiliar languages, as well as
labor laws and various other regulations. Chinese
Companies that grasp advantages
companies have seen mergers and acquisitions as a inherent in value-added products and
solution to their inexperience overseas, but these services—that is, the ability to charge a premium—lack
rarely prove successful (90% of China’s 300 foreign M&A the critical mass to become global power brands.”
transactions between 2008 and 2010 failed, according —TOM DOCTOROFF, JWT North Asia area director and
to one report cited by the Brookings Institution). Greater China CEO, author of What Chinese Want
Image credit: dcmaster 14

WHAT WE’LL
INTERNAL ROADBLOCKS
COVER (cont’d.)
Failure to conquer home turf: Middle-class Chinese When Western media report that China’s
consumers distrust many local labels, and international middle class is snapping up Western
brands still come with aspirational attributes, as well as
goods, what they mean is that the
quality reassurance and reliable service. According to
Chinese consumers who can afford to are spending
Doctoroff, “There are few Chinese labels actively preferred
by mainland consumers.” Plus, there’s little brand loyalty
extra to avoid counterfeits. That is not consumers
among shoppers. Most Chinese companies will need to win acting as brand advocates, or out of affinity—it’s fear
the domestic war before tackling the international market. purchasing. It says less about Western brands than
about China’s landscape.”
Leading Chinese athletic-wear company Li-Ning stumbled
—ABE SAUER, “Chinese Are Fear-Buying, Not in Love
when it tried to move upmarket—because even in lower- With Western Brands,” Brandchannel, June 8, 2012
tier cities, shoppers will trade up to foreign labels like Nike
and Adidas when they can afford to spend more. Former
Li-Ning chief executive Zhang Zhiyong admitted to The
Hong Kong people have often looked
Financial Times in 2011, “I think we have to learn how to
to Western culture for inspiration,
balance the price-driven and quality-driven.” When domestic
brands get that balance down, they’ll be more attractive to we emulate their lifestyle yet we can
international consumers as well. never convincingly pull it off as true
Westerners. If there were more locally
inspired alternatives that appeal to our young
generations, they may adopt these choices without
denying their true identity. Ownership of our culture
endows us with a sense of authenticity. It is only in
being confident of who we are that we can hold our
heads up high on an international level.”
—DOUGLAS YOUNG, co-founder of
Hong Kong-based lifestyle
brand Goods of Desire
If [international brands] can charge

a 20% price premium here—where
Chinese people should know the
quality of Chinese brands—simply
because they’re not Chinese, the
battle abroad is pretty serious.”
—TOM DOCTOROFF, JWT North Asia area director and
Greater China CEO, author of What Chinese Want
Image credits: Jessica Vaughn 15

OVERCOMING
THE ROADBLOCKS
It’s key to remember that China was once known worldwide for producing expensive, quality products—
from silks and paper to ceramics—that awed European and American travelers, a far cry from its current
global perceptions. Today, 30-plus years after the start of economic reforms that opened up the market,
Chinese goods are moving back up the value chain.
Domestic manufacturers are producing a range of quality products for China’s increasingly discerning
middle-class consumers and Western shoppers alike. Haier, for instance, is working on developing higher-
end products for the European market, where the appliance manufacturer has doubled its market share
over the past five years. In some sectors there’s simply no choice but to focus on brand-building, given
an increasingly competitive domestic market in which weak brand value makes a label easy prey for
commoditization.

OVERCOMING THE ROADBLOCKS (cont’d.)
The push to build quality homegrown products is being fueled from above. According to Reuters, “The government is
encouraging its companies to move up the value chain and develop margin-producing brands, partly as a matter of national
pride but also to shift the world’s second-biggest economy away from gritty, low-profit manufacturing.” Beijing is also trying
to pump up local demand: For instance, the Ministry of Industry and Information Technology recently issued a mandate that
officials buy only domestic cars, forcing a shift away from the German luxury brands that are currently favored.
While critics argue this method of protecting domestic brands won’t help them to scale globally, the government hopes to
prove them wrong. Going beyond a boost from the state, there are several key ways that brands can begin to knock down the
roadblocks to overseas success.
Take back “Made in China”: Rather than be constrained by “Made in China,” some brands are working to take back the label.
These companies are tackling the negative stereotypes head-on rather than skating around the fact that consumers may
assume the Chinese-made products are unoriginal or poorly constructed.
Luxury apparel label Shanghai Tang once traded on the tagline “Made by Chinese,” which helped the brand go global.
Prominent sportswear brand Li-Ning welcomes visitors to its English-language website with the greeting “Straight Out of New
China. Be Unexpected. Do Different. Make the Change.” As Abe Sauer wrote in Brandchannel, “The ‘new’ China can be defined
by each consumer, and maybe that’s their point.”
Image credit: Li-Ning 17

One of the world’s largest air conditioning manufacturers, GREE touts that it’s “Created in China,” focusing its branding
activities around the idea of being a leader in tech innovation. And the brand delivers—it’s an industry leader in energy-
saving technology.
“Proudly Made in China” is

the slogan for One Small Point
of Pride, or OSPOP, a budding
footwear line dreamed up by
an American entrepreneur
living in Shanghai. The brand highlights that “China is a
nation of industrious, optimistic people creating great
opportunities for themselves and for their future.”
Interestingly, OSPOP initially targeted its shoes—inspired
by the kicks Chinese construction workers wear—at young,
trendy Westerners (with some success) before starting to
focus on Chinese consumers last year. (Judging by reports
of knockoff versions throughout China, Chinese shoppers
seem to have embraced the product.)
People are working hard, education levels
The Chinese government itself has been working to counter are rising, people are traveling more and
negative perceptions around “Made in China.” Back in 2009, enjoying more leisure time. Why shouldn’t
the Ministry of Commerce kicked off an ad campaign that
China’s development story be the foundation of a
aimed to illustrate that Chinese-made products represent
fashion brand?” —BEN WALTERS, founder of OSPOP,
global collaborations, with various partners co-creating “OSPOP: The shoe inspired by China’s laborers
something of value for consumers everywhere. Among other comes home,” CNNGo.com, Feb. 24, 2011
scenes, a jogger laces up running shoes that carry the label
“Made in China with American sports technology,” and a
garment featured in a fashion shoot bears the tag “Made in It’s true that unscrupulous people have
China with French designers.” The spot, which started airing tainted China’s image. But as Chinese
in Asian markets and then expanded to the U.S. and Europe, ourselves, we cannot deny who we are
closes with the tagline, “When it says ‘Made in China,’ it
by pretending to be somebody else. We
really means ‘Made in China, made with the world.’”
must bravely face the challenges.
Compete at a world-class level: Until the “Made in China” I’m a believer in making a feature of our disadvantages
burden is shed, brands emerging out of China will need to instead of hiding our roots (which a lot of local brands
offer superior products that more than hold their own do). We emphasize the fact that we are Chinese.”
against global benchmarks of quality and design. The
—DOUGLAS YOUNG, co-founder of
standards will be those of old Chinese culture, when Hong Kong-based lifestyle
only the best would do. brand Goods of Desire
A few brands are elevating Chinese goods to the world-class level by focusing on high-end craftsmanship and design. Flipping
the prevailing model on its head—Chinese companies manufacturing on their home turf, then adopting European-sounding
names to avoid negative associations—the new luxury menswear line Sheji/Sorgere designs its wares in China but off-shores
its manufacturing to Italy, taking advantage of the nation’s legacy of quality craftsmanship. (As yet the line is focused on the
domestic market.)
Image credits: OSPOP; Jessica Vaughn 18

Chinese retailer Bosideng, which operates nearly 11,000 mainland-China outlets, is taking a similar route for its first European
outpost. Known in China primarily for its midmarket down coats, the company is debuting near London’s central Oxford Street
shopping area as a luxury label, with most of the garments made in Europe. The retailer will trade on exclusivity by limiting
production to 50 pieces per garment.
The concept is not entirely new: Since 1993, upscale clothing [JNBY is] an example of how good
label Marisfrolg has been designing its goods domestically Chinese fabrication can be. The design is
and sourcing most of its fabrics from markets such as Italy,
quite simple, yet avant garde. They’ve
Japan and France. The company is making headway into
made an excellent transition from manufacturer to
foreign markets, with recent expansions into South Korea
and Singapore. brand builder.” —LIN LIN, co-founder of design group
Jellymon, “‘Made in China’ is finally cool,”
CNNGo.com, Feb. 8, 2011
Hangzhou-based fashion label JNBY, founded by a collective
of art and design students in 1994, has also made international
inroads—the company boasts 600 stores globally—by focusing Glad to see that ChangYu can produce
on design and innovation.
great white wines, red wines, sweet
ChangYu—China’s first winery, wines and brandies—all different
established 120 years ago—has products but all at a very high level. They compete
emerged as one of the top 10 wine very well with the French wines.”
producers in the world. ChangYu’s —PIERRE BARTHE, French sommelier, “Changyu holds wine tasting
Jiebaina dry red ranked as one of the world’s top 30 wine to mark 120th anniversary,” China Daily, June 29, 2012
brands during the 2008 Salon International de l’Alimentation,
a food and drink expo in France. Today ChangYu’s product has received a seal of approval in important wine-producing
regions such as France, Germany and Italy and is sold in almost 30 countries.
Superior quality, design and craftsmanship directly counters some of the biggest challenges facing Chinese brands without
explicitly addressing the “Made in China” stigma; instead, the products speak for themselves.
Image credits: ChangYu; Bosideng 19

Lean into national identity: While “Made in China” is a negative, “Chineseness” itself is in many ways a positive in the eyes
of international consumers. When asked to personify China in comparison with the U.S., the U.K. and Japan, respondents
generally perceived the Middle Kingdom as successful, traditional and diligent. (See Figure 2A; for country breakdowns, see
Appendix, Figures 2E-2F.) And China’s citizens are considered the smartest people around, laden with leadership potential.
(See Appendix, Figures 2L-2N.)
A paradox has thus emerged in the Western mindset: Some of the brainiest and most hardworking people are producing some
of the cheapest, lowest-quality products available.
Our research also found that the traditional elements of its culture are the aspects of China that both American and British
consumers feel favorably about. When asked about Chinese history and heritage, 72% of respondents said they would be
interested in learning more about China’s cultural history; three-quarters of respondents said they admire the way Chinese
people have been able to maintain their sense of tradition in the modern world. And 6 in 10 felt that their culture could learn
a lot from the Chinese way of life. (See Figure 2B; for country breakdowns, see Appendix, Figures 2G-2H.)
FIGURE 2A:
Country personality (U.S. and U.K.)
Imagined personality characteristics of the following countries by American and British adults
USA SUCCESSFUL China

Usually gets
Would sell everything to put
their way
their child through college
Could probably Believes in tough parenting
Always makes a
“hotwire” a car to ensure child succeeds
grand entrance when
walking into a room Knows the best Would be a successful Loves to take things apart
restaurants in town entrepreneur to see how they work
Lives for the Puts in whatever hours are
moment needed to get the job done right
Treats themselves very well Always thinking
outside the box Doesn’t question authority
Doesn’t sweat the small stuff More spiritually evolved
TRADITION/
CAREFREE DILIGENCE
Enjoys the simple pleasures in life Would spend days working in
Could win a order to make sure it is perfect
You know what to expect from them Nobel Prize
Respectful
Japan Family stories passed
down through generations
Would follow to get out
Would always of a burning building Would jump of nature/the
have a good time out of a boat environment
Would have a well-organized closet
to save you
Always shows up when they say they will
Has a good You could tell a secret to
sense of Would give up seat for an elderly person
humor
Would leave your kids
with for two weeks
UK RELIABLE
20
These spheres of positive perception have been largely FIGURE 2B:

overshadowed in recent decades by the legacy of “Made Attitudes toward Chinese culture
in China” and the nation’s rocky relationship with the West. (U.S. and U.K.)
For Chinese brands, there’s an opportunity to trade on Percentage of American and British adults who
national identity and drive a new conversation about agree with each of the following
“brand China,” focusing on culture, history and widespread Millennials (18-34) Gen X (35-47) Boomers (48-67)
perceptions of “Chineseness.”
73
China has such a long
At the same time, there’s a nascent preservationist spirit in cultural history; I’d
71 72%
be interested to learn
China—a desire to protect its heritage and culture, which a more about it
71
growing number of people see as being sacrificed in the drive
toward modernization and development. (“No other country 62
I think our culture
has tried to cut off its history more radically,” argued artist can learn a lot
from the Chinese
63 62%
Johnson Chang in a Wall Street Journal feature describing
way of life
60
his heritage-preservation efforts.) This recalibration of
values after a period of relentless, rapid change comes as
no surprise, given that Chinese society fears uncertainty and I admire how Chinese 74
people have been
instability above all. Bursts of growth are often followed by able to maintain their 77 76%
sense of tradition in
periods of stabilization. the modern world 77
Perhaps this new mindset will give rise to Chinese brands that
There are some
lean into national identity and leverage that focus to find 69
amazing things in
traction abroad. A few smaller companies are already trying China that I think
would provoke
71 72%
that tack or reviving Chinese heritage brands. a lot of interest
76
here in the West
The mission of Hong Kong-based Goods of Desire, which

sells everything from furniture to apparel and accessories,
is to be “quintessentially Hong Kong” and promote “a new
Asian lifestyle brand by revitalizing local heritage.” Over
the course of its 16-year history, G.O.D. (as it’s known
locally) has won a number of design and retail awards and
found a home in international boutiques; this year G.O.D.
opened its first overseas retail location, in Singapore. The
company’s products are inspired by Hong Kong’s complex
history of Eastern and Western culture clashing up against
one another, with the brand making a conscious effort
not to perpetuate the clichés that come to mind for many
international consumers but rather to introduce shoppers to
an authentic, richer culture.
Chinese companies only make products, and none of them

link their products to culture.” — XIA YANG, president of Beijing
Sunny Times Polo Sports Co. Ltd., “High-end
Chinese brands coming soon,” China Daily, May 1, 2012
Image credit: Goods of Desire 21

Meanwhile, spurred by both Western and domestic businesses, there’s been a

revival of traditional Chinese labels, many of which all but disappeared after
multinationals started entering China in the late 1970s. In 2009, for example,
a limited-run redesign of heritage brand Shanghai Watch Co. sold out not only
domestically but in trendy boutiques such as Colette in Paris and Kidrobot
in New York. Chinese-born labels Feiyue and Huili (or Warrior) sneakers,
established in the 1920s and ’30s, respectively, have undergone design updates—
albeit by European companies—and found favor among hip international
audiences, who buy into the brands’ heritage. There’s also been buzz about a revival of the Hongqi, or Chairman Mao’s Red
Flag limousine, which was originally manufactured from the 1950s to the 1980s.
Blending the old with the new in a way that’s relevant for a modern consumer is one
potential route to success for Chinese brands. And as Chinese companies become more
savvy marketers, they will be able to better tell the story of Chinese culture and heritage
through their products.
Li-Ning tapped into this idea with the U.S. release of its “Year of the Dragon Collection” earlier this year. (2012 coincides with
the year of the dragon in the Chinese zodiac.) The company produced four limited-edition new designs of its Turningpoint shoe
that evoked visions of old China and carried symbolic associations. For instance, one design used the same shade of yellow
that Tang dynasty rulers wore. The names (e.g., “Porcelain,” “Emperor’s Robe”) reinforced the theme. Sneakerheads across
the U.S. went nuts for the shoes and the line.
Just as nations such as Japan, Korea and even Germany have done, Chinese brands looking to compete in international
markets will need to turn “Chineseness” into a conceptual advantage rather than a perceptional weakness—a turnaround that
will rely on clever branding campaigns that play on consumers’ more positive ideas about China.
I believe that global

identity, national
identity and individual
identity can all
coexist. Due to the big
trend of globalization nowadays,
there is a lot less focus in Asia
on building regional identity.
I hope G.O.D. can re-emphasize
the importance of identity to our
consumers. I think it is our unique
identity that makes interaction on
the global level a lot more
interesting.” —DOUGLAS YOUNG,
co-founder of Hong Kong-based
lifestyle brand Goods of Desire
Image credits: Huili; Feiyue; Li-Ning 22

Tap into the Millennial worldview: Chinese brands will FIGURE 2C:
likely find Millennials to be more receptive than older Impression of Chinese brands (U.S. and U.K.)
generations. Compared with their predecessors, these Top six phrases associated with Chinese brands by
American and British adults
consumers have grown up in a much smaller, more
connected world and have been exposed to a wider array
of worldviews at a younger age. And they know China as 47
Mass-
a modernizing, rapidly emerging market—a very different 48 52%
produced
62
country from the one that older consumers remember.
35
Our research found that Millennials are slightly less biased Cheap 44 44%
53
against the “Made in China” label. Compared with older
generations (especially Boomers), Millennials were the least 26
Poor safety
likely to identify Chinese brands as mass-produced, cheap 31 35%
standards
47
and constructed using poor safety standards. (See Figure 2C;
for full list and country breakdowns, see Appendix, Figures 22
Poorly made 24 26%
2I-2K.) American Millennials stand out in their openness to
31
trying Chinese brands, especially when it comes to video
21
games, appliances, clothing, alcohol and even cultural
Unreliable 22 23%
exports such as music. (See Appendix, Figures 2O-2Q.) And 27
Millennials are the most likely to purchase and be impressed
21
by products made in China (see Figure 2D), though it’s Ordinary 17 20%
important to note that these still fell well below American- 22
and Japanese-made goods.
For today’s youth, China doesn’t live only in textbooks

The openness among Millennials and
or on the History Channel. They are gaining a better
upper-income levels is a key part of our
understanding of China through direct exposure, which
is likely to make for a generation that’s more hospitable strategy, as it provides an opportunity for
toward Chinese brands. us to tap into these markets and tailor our products
to fit their needs.” —CRAIG HEISNER, VP of sales, marketing
Chinese students outnumber any other international cohort and merchandising at Digital Li-Ning,
in American universities, according to the American Chamber “Study shows Americans view Chinese brands
positively,” China Daily, June 15, 2012
of Commerce China. And some 90,000 Chinese students were
attending British universities in October 2011.
The cultural exchange goes both ways. Today’s global-minded Western youth are looking to bridge the divide, simply out of
curiosity or to gain an edge in a future likely to be defined by China’s economic might. One American undergrad studying
in China explained to Channel News Asia, “I just have an interest in China and Chinese. ... It’s really different, it’s really
challenging, and I like that about it. I’ve always found the culture fascinating from the first exposure I had to it.” Some
estimates forecast that the number of international students in China, currently at a quarter-million, will double by 2020.
(President Obama introduced an initiative to send 100,000 American students to China in 2009.)
Faced with a tough job market at home, some recent American and European college grads are relocating to Asia. The Chinese
government welcomes this influx and has eased its immigration policies—educated and ambitious young people can help fill
the labor gap this aging nation faces and potentially drive innovation. Last year the government extended an effort to attract
up to 1,000 non-Chinese academics and entrepreneurs over the next decade.
23
FIGURE 2D:
Country manufacturer strength (U.S. and U.K.)
American and British impression and likelihood of purchase for country manufacturers
Made in the USA – Gen X

IMPRESSED
Made in the USA – Boomers
Made in the USA – Millennials
Made in Japan – Millennials
Made in Japan – Gen X Made in Japan – Boomers
Made in China
Millennials
NOT LIKELY TO
LIKELY TO PURCHASE
PURCHASE Made in Brazil – Millennials
Made in India – Millennials Made in China
Made in Thailand – Millennials Gen X
Made in China
Made in India – Gen X Boomers
Made in
Made in Brazil – Gen X Thailand –
Gen X
Made in India – Boomers

Made in Brazil – Boomers
Made in Thailand – Boomers
NOT
IMPRESSED
It’s not just that the technology is pulling people together. …

You’ve got a lot of cross-cultural integration, and youth today
travel a lot more as well, compared to when I was younger. This
has just made these guys a lot more aware, a lot more informed
and a lot more connected.” —HOWIE LAU, VP of marketing and
communications for Asia Pacific
and Latin America, Lenovo
24
There’s also been worldwide interest in learning Mandarin—some say there are 50
million people of all ages studying the language. The U.K. and Indian governments,
among others, are working to boost the Mandarin curriculum in schools. In the U.S., the
number of high school students taking Advanced Placement exams in Mandarin more
than doubled between 2007 and 2010; and the number of American undergrads studying
Chinese more than doubled between 1998 and 2009. (By the same token, within China’s
borders there are nearly 300 million people learning English.)
This Millennial interest in China extends to the other BRIC nations. Lenovo’s Howie Lau says Brazilian youth are “positively
inclined towards China,” regarding it as “the next big growth engine.” And studying in China has become a popular option
for Indians, especially medical students, since the country started accepting Chinese university degrees in 2010. The
number of Indian medical students in China is forecast to increase by more than 20% this year.
Lenovo smartly tapped into the global

Millennial mindset with its first global
campaign, “For those who do,” which
launched last year, positioning the
products as tools for this go-getter
generation to get things done. In
one ad, reminiscent of the final
scenes of Fight Club, a team of urban
hackers passes along a Lenovo laptop
they’re using to orchestrate a dazzling
urban light show. In India, Russia and
Indonesia, Lenovo set up “The Do
Network,” an online forum where
young people could submit community
improvement ideas for a chance to win
access to university research labs (“Do
Labs”), Lenovo machines, a team of
mentors and $25,000 to turn their idea
into reality.
Drive innovation and lead categories: Developing a culture of innovation remains a

major challenge for many Chinese companies, but China is starting to address this. In
the realm of education, some Chinese are questioning the system’s prevailing practice of
textbook memorization and data regurgitation. And wealthy parents are shipping their kids
off to foreign schools, where they’re learning self-expression and creativity.
Various government mandates are focused on spurring innovation. One goal in the current
five-year plan is for China to create 3.3 patents for every 10,000 of its 1.34 billion citizens.
Overseas patent filings by Chinese companies are already up, rising from around 5,500
in 2007 to an estimated 16,400 last year, according to the World Intellectual Property
Organization.
Image credit: Eric Nishio; Lenovo [1], [2] 25

The most successful Chinese multinationals tend to pour a We invest more than most others on
great deal into R&D. Huawei recently announced plans to R&D just to be able to go out there
boost R&D spending to $4.5 billion this year as it seeks to
and consistently demonstrate the
move more deeply into the mobile-device and enterprise-
innovations and the quality and the
network markets; just under half of Huawei’s employee
base is engaged in R&D. And Lenovo operates 46 research
product … to go the extra mile. We
labs across the globe. think it’s necessary, because this will give
the customers the peace of mind that we are
Realistic or not, executives around the world believe
committed to what we say we’re going to do.”
that China will begin to drive global innovations: 45%
—HOWIE LAU, VP of marketing and
of respondents to a 2012 survey by KPMG believed communications for Asia Pacific
China would become the next major innovation center, and Latin America, Lenovo
and around 30% felt the next “disruptive technology
breakthroughs” would come from within China’s borders.
Technology companies are indeed leading the way. This year,

for instance, Lenovo is set to release the IdeaPad Yoga, an
ultra-thin device that’s part tablet, part laptop: It features a
keyboard that can be tucked behind the display, emulating an
iPad. Huawei, which makes mobile telecom equipment and
serves more than a third of the world’s mobile phones, was
one of Fast Company’s top five Most Innovative Companies
in 2010. On a mission to become one of the world’s
top three smartphone providers
by 2015, Huawei is pushing its
Ascend D Quad (which it claims is
“the world’s fastest smartphone”)
in Western markets.
We are optimistic
about the future
of the PC, but
we also know that we must
look beyond traditional PCs
for growth, innovation and
new markets.”
—YANG YUANQING, CEO of
Lenovo, speaking at CES 2012
Image credits: Lenovo; Huawei 26

Appliance manufacturer Haier, dubbed “a leader in Chinese innovation” by Booz &

Company, has produced a range of innovations, from rat-proof appliances for Chinese
farmers to a refrigerator equipped with a pizza-sized drawer for American buyers. The
company also markets an air conditioner that doubles as a security device thanks to an
embedded camera. Haier plans to attract midmarket European consumers with a similar
feature on an upcoming refrigerator, which will monitor the kitchen via an external camera
and touch screen. And it recently unveiled two novel television prototypes: an ultra-thin
transparent TV screen and Brain Wave, a TV that users can control with their mind.
Automaker BYD created a buzz at this year’s Beijing auto show by introducing a remote-controlled car, the F3 Plus,
claiming that it’s the “the first mass-produced vehicle featuring remote control driving as a standard feature,” according to
MIT’s Technology Review. With a special key, drivers can remotely move the car forward and backward, and turn it.
If a product proves its worth, standing out as a category leader or innovator, consumers ultimately won’t care much where
it’s from. And if potentially breakthrough products like these live up to their hype, they can go a long way toward dispelling
consumer skepticism around Chinese brands, swatting at the perception that Chinese manufacturers are simply copycats.
Ride on international brand

coattails: Whether by acquisitions
or simply via one-time partnerships,
Chinese brands stand to make
valuable strides by aligning with
brands that are already global
sensations or know how to steer
through international waters.
Hong Kong-based Goods of Desire

has collaborated with a number
of global brands. Companies
including Swatch, famous French
paper manufacturer Clairefontaine,
BlackBerry, Hello Kitty, Dr. Martens,
Microsoft Xbox, Sony Vaio and Canon have created products in
partnership with G.O.D.’s designers. In 2009, after Starbucks
tasked G.O.D. with designing a store in Central Hong Kong, co-
founder Douglas Young modeled the space after a “bing sutt,”
a midcentury-style Hong Kong food outpost where Western
foods were first introduced. The store was such a success that
Starbucks created special flavored drinks and Chinese snacks
for the location. G.O.D. also produced a line of souvenirs
for the flocks who came to the unique location. A second
such Starbucks opened this year, themed around locally Interior of “bing sutt”- inspired Starbucks outpost in
Hong Kong designed by G.O.D. co-founder Douglas Young
produced movies.
Image credits: Haier; BYD; Goods of Desire 27

This year, Chinese celebrity clothing designer Uma Wang, whose styles have graced the catwalks of
Milan, partnered with Swatch to create two watches for the Swatch Art and Fashion collection.
Chinese brands are also riding on the coattails of various sports teams and athletes across the West, via
sponsorships. This year, Lenovo became the official tech sponsor of America’s National Football League,
and Peak Sport Products signed an endorsement deal with the Miami Heat. Peak, which has sponsored
the Heat’s Shane Battier for six years (among other NBA players), opened its first U.S. store earlier
this year, in Los Angeles. Haier is the official HDTV sponsor of the National Basketball Association and
sponsors a New Zealand netball team,
the Haier Pulse. Chinese sportswear
maker Anta made headlines in 2010
when it started sponsoring NBA
superstar Kevin Garnett. This year,
Li-Ning has been making prominent
appearances at a range of sporting
events; for the London Olympics,
it’s backing a Russian pole vaulter,
a Jamaican sprinter, a Norwegian
javelin thrower and the USA’s star triple jumper
Christian Taylor. Li-Ning also served as the gear and
footwear sponsor of the 2012 Red Bull “King of the
Rock” basketball championship.
A few Chinese brands including Lenovo and TCL

phones have also recently tried their hand at product
placement within American films and TV shows.
Midrange apparel retailer Meters/bonwe, which
plans to expand internationally in the next three to
five years, has made two cameos in the Transformers
movie franchise and tested out the gaming space,
collaborating with the producers of World of Warcraft
(which has been more successful for the brand than
the Transformer placements, according to reports). In another notable placement, Yili milk brand Shuhua made a brief
appearance on hit sitcom The Big Bang Theory earlier this year.
A “seal of approval” from a strong Western brand (whether a product, person or TV program) potentially helps to elevate
the Chinese label at home while bringing it to the attention of international audiences.
Become a leader in CSR: With consumers skeptical about the trustworthiness of Chinese companies and dubious about
their green credentials, substantive corporate social responsibility initiatives would go a long way toward rebranding “Made
in China” among consumers. And some argue that CSR is an area in which Chinese brands could potentially excel, due to a
number of factors.
Patriarchs by nature, Chinese companies will likely begin to adopt a “uniquely Chinese” version of CSR, thanks largely
to the government’s focus on promoting stability. Beijing is pushing for greater energy efficiency, for example, “because
runaway pollution in China means wasted lives, air, water, ecosystems and money—and wasted money means fewer jobs
and more political instability,” as The New York Times’ Thomas Friedman explained in a 2010 column.
Image credits: Swatch; Anta; Meters/bonwe 28

Currently the world’s top emitter of carbon dioxide,

China has set a range of pollution-reduction and other
environmental goals, including a 40-45% cut in carbon
emissions by 2020 and an 11.4% increase in non-fossil fuel
use by 2015 as part of an emphasis on “higher quality
growth.” It’s an ambitious target, though, given that China’s
CO2 emissions increased in 2011.
While Western companies have gradually come to understand

that measures designed to help the environment can also help
the bottom line, this is something that pragmatic Chinese
leaders in government and business may be quick to understand.
Smart CSR policies are seen less as a matter of generating
“warm and fuzzy” feelings and more as “the right thing to
do, mostly because it will be the thing that provides the best
return,” according to branding consultant Joseph Baladi. Haze of pollution over Beijing
Due in part to mandates that all state-owned institutions publish CSR reports by 2012, reporting is on the rise. In the six
years leading up to 2005, only 22 CSR reports were published in China, largely by multinationals; in 2010, there were
703 reports, focusing on a diversity of content. Reporting begets more transparency, which increases awareness of CSR
activities among consumers and raises expectations, which in turn helps to drive more impactful CSR efforts.
Perhaps the next generation of leaders will drive more substantive change: In a 2012 survey by Deloitte on Millennial
attitudes toward business, Chinese youth stand out in their concern about the lack of commitment to sustainability among
business leaders. More generally, Chinese citizens rank the highest globally in terms of a desire to be in tune with nature,
according to GfK Roper Consulting’s Values Factbook. And per a 2010 Datamonitor report, Chinese consumers are deeply
concerned about environmental issues “and how their everyday activities are contributing to them, with a high proportion
already taking action to improve the sustainability of their lifestyles.”
Since a sense of collective responsibility is an important aspect of Chinese culture, along with conformance to social
norms, environmental concern could well start to drive consumer decisions. Plus, as growing numbers of Chinese see their
basic needs met, they’re beginning to demand more of consumer goods and services, not only in terms of sustainability.
Impatient with substandard product quality, food-safety violations, poor accountability
for major missteps and so on, they are less tolerant of secrecy and lack of transparency.
Haier’s global brand building has emphasized its environmental credentials. This year,
for instance, the company helped to promote Earth Hour, staging performances across
North America, Europe and Asia to raise awareness around energy conservation. Haier
also supports a number of environmental organizations, including the U.S.-based
National Parks Conservation Association. The company was named one of China’s top
global citizens by the World Economic Forum and the Boston Consulting Group, and
received Businessweek China’s “Greener China Business Award” in 2009.
As part of its CSR efforts, Lenovo has focused on education in developing nations,
creating products geared for educational institutions. The company also has some of
the best green product ratings among PC manufacturers, receiving seals of approval
from a number of global bodies, and uses recycled materials in packaging.
Image credits: David Barrie; Haier 29

CONCLUSION
The journey to Western shores will undoubtedly be an arduous one for Chinese brands. We’ve seen some notable
stumbles, such as sportswear maker Li-Ning closing its only U.S. retail outlet, a 2-year-old store in Portland,
Ore., in February. JWT’s Tom Doctoroff believes that China as a nation will “cross the river by feeling the stones”
as it ascends to the global stage—“inching forward, occasionally overreaching but quickly correcting course.”
Perhaps this metaphor will prove apt for China’s brands as well. Li-Ning, for one, isn’t giving up on America, it’s
adopting a new tactic (focusing on e-commerce through a partnership with a Chicago marketing firm).
We’ve outlined some key strategies that Chinese brands might use to overcome the roadblocks to expansion:
taking back “Made in China” rather than be constrained by the label; competing at a world-class level, offering
superior products; leaning into national identity and turning “Chineseness” into an advantage; tapping into
the worldview of Millennials, a more open and globally connected generation; driving innovation and leading
categories; riding on international coattails, aligning with popular global brands; and becoming a leader in CSR.
Image credit: Dave Morrow 30

CONCLUSION (cont’d.)
This list is by no means comprehensive, nor is there a one-size-fits-all equation for successful expansion into
developed markets. For the methodical and cautious Chinese, this need not be the first order of business
anyway—a booming domestic market and lucrative developing markets represent tremendous opportunity. The
lessons learned here will ultimately help brands move beyond those markets. And as rising incomes create more
discerning emerging market consumers, improved quality and safety standards are likely to follow. The question
is whether consumers will follow Chinese products up the value chain or veer toward established brands.
If they can pioneer unique niches for themselves, Chinese companies won’t need to go head-to-head with
successful brands. “Trickle-up innovation” is one area of potential: taking low-cost products designed for
developing markets to penny-pinching consumers in developed markets. After all, the Chinese are masters of
driving down costs.
More generally, products will need to compete at or above a world-class level, given that consumers
are carrying their negative perceptions of Chinese-made onto Chinese-created. A consumer who finds a
shortcoming or defect will quickly attribute the issue to poor Chinese quality and write off the brand, whereas
consumers who encounter similar problems with goods from elsewhere are more likely to give the brand a
“pass.” And thanks to low awareness of Chinese brands, some consumers will transplant negative perceptions
of one brand onto others, underscoring the need to build brand equity.
That will come over time as Chinese companies hone their advertising and marketing skills—keep in mind
the industry in China is relatively young. Chinese are adept at studying the competitive advantages of other
cultures and putting them into practice in uniquely Chinese ways, a point Doctoroff makes. Savvy executives
will watch and learn from many of today’s dominant brands, mastering the best practices of branding.
Chinese brands have an opportunity to tell a fresh story about China, emphasizing everything consumers
like and appreciate (its culture, its people) or easing anxieties tied to the Middle Kingdom. As our research
found, an array of factors are fueling negative consumer perceptions of China, but at the other end of the
spectrum, there are a number of factors that, while less influential, drive positive opinions. Largely absent
from the global chatter on China, Chinese brands can start to drive new conversations about the nation (just
as American brands have done for 50-some years).
The next generation of business leaders may help accelerate change in China’s corporate world. Millennials
have grown up in a booming and interconnected China, and many are Western-educated, trained to think more
creatively. As a result, we’ll likely see a push-pull between the Millennial mindset and prevailing cultural norms.
Tom Doctoroff cautions that while this generation “is increasingly worldly and conceptually adventurous,”
they may “regress to the mean when they are confronted with structure.” But at minimum, executives adept
at navigating multicultural environments and foreign languages will be invaluable. On the consumption side,
Millennial consumers will be more welcoming than their elders to the arrival of Chinese brands.
The idea of Chinese brands is new to many consumers, but it won’t be for long. From Bosideng’s recent
landing in central London to Haier’s drive to produce American-targeted goods (via an upcoming U.S.-based
R&D center), more Chinese brands are pushing into Western markets every day. And ultimately it may not
matter to consumers where they’re from: “At the end of the day, people are not buying national brands, and
they’re not buying brands that have a certain provenance,” says consultant Joseph Baladi. “They are buying
great brands, and that’s the most important thing.”
31
APPENDIX:
MORE ABOUT OUR EXPERTS/
INFLUENCERS

WHAT WE’LL
APPENDIX: MORE
COVER
ABOUT
(cont’d.)OUR EXPERTS/INFLUENCERS
JOSEPH BALADI, CEO of BrandAsian, author of The Brutal Truth About Asian Branding
As CEO of BrandAsian, Baladi provides one-on-one business and branding advice and counsel to CEOs
of some of Asia’s largest companies. He has experience in business communications across multiple
geographies; for the past 10 years, he’s been based in Singapore, covering all of Asia. He has helped to
shape and reposition brands including Millennium Hotels (Hong Leong Group), Crocodile International,
Eu Yan Sang, National Health Care Group and Macau Grand Prix. Prior to moving to Asia, he held senior
regional and global brand responsibilities at DMB&B and McCann Erickson Worldwide.
He is a frequent speaker on the conference circuit, a regular guest on business television programs, and regularly
contributes to business magazines and newspapers across Asia. His book The Brutal Truth About Asian Branding was
published in January 2011.
TOM DOCTOROFF, JWT North Asia area director and Greater China CEO, author of What Chinese Want
Doctoroff started his advertising career at Leo Burnett in Chicago but jumped ship to JWT (Chicago).
In 1994, he moved to Hong Kong as regional business director for clients such as Pepsi, Philip Morris/
Kraft and Citibank. In 1998, he landed in China as managing director of JWT Shanghai. In 2002,
Doctoroff was appointed Northeast Asia area director, covering China, Taiwan, Hong Kong and Korea,
and Greater China CEO. In 2008, he also assumed leadership of JWT Japan. Through diversification
into customer relationship marketing and trade marketing, promotion network management, digital engagement and
brand identity/design, JWT North Asia has emerged as one the most synergistically integrated, creatively dynamic
communications networks.
Doctoroff’s book What Chinese Want: Culture, Communism and the Modern Chinese Consumer was published in May
2012. He previously wrote Billions: Selling to the New Chinese Consumer.
HOWIE LAU, VP of marketing and communications for Asia Pacific and Latin America, Lenovo
Lau oversees branding, demand generation and public relations for markets including ASEAN,
Brazil, HTK (Hong Kong, Taiwan and Korea), India, Japan, Latin America and ANZ (Australia and
New Zealand). In his previous post as general manager of Lenovo ASEAN, Lau oversaw Lenovo’s
business across 10 countries. He was responsible for business operations, strategy development,
implementation, sales, marketing and relationship management with all stakeholders in the PC
industry for Lenovo’s commercial and consumer products and services.
Lau graduated from the National University of Singapore with a Bachelor of Business. He serves on the executive
council for Singapore Computer Society and Singapore IT Federation.
DOUGLAS YOUNG, co-founder of Hong Kong-based lifestyle brand Goods of Desire

Born in Hong Kong, Young was trained as an architect at Sheffield University and the Architectural
Association in the U.K. and has worked in Hong Kong on projects ranging from residential to
retail interiors. In 1996, Young co-founded Goods of Desire with Benjamin Lau. The shop retails
contemporary furniture, homewares and lifestyle accessories with a contemporary Chinese twist.
Most of the merchandise is designed in-house by a multidisciplinary design team led by Young. The
long-term vision is to build a Hong Kong brand that is both forward-looking and proud to display its cultural origins.
To date, G.O.D. has eight stores in Hong Kong, including a 20,000-square-foot flagship store. G.O.D. products are
available in many of the world’s department stores, boutiques and museum shops.
33
APPENDIX:
ADDITIONAL CHARTS

APPENDIX: ADDITIONAL CHARTS (cont’d.)
FIGURE 1E:
Percentage of American and British Millennials aged 18-34 who associate the following traits with products made in
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
35
FIGURE 1F:
Percentage of American and British Gen Xers aged 35-47 who associate the following traits with products made in
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
36
FIGURE 1G:
Percentage of American and British Boomers aged 48-67 who associate the following traits with products made in
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
37
FIGURE 1H:
Country manufacturer impressions (U.S.)
Percentage of American Millennials aged 18-34 who associate the following traits with products made in
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
38
FIGURE 1I:
Percentage of American Gen Xers aged 35–47 who associate the following traits with products made in
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
39
FIGURE 1J:
Percentage of American Boomers aged 48-67 who associate the following traits with products made in
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
40
FIGURE 1K:
Country manufacturer impressions (U.K.)
Percentage of British Millennials aged 18-34 who associate the following traits with products made in
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
41
FIGURE 1L:
Percentage of British Gen Xers aged 35-47 who associate the following traits with products made in
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
42
FIGURE 1M:
Percentage of British Boomers aged 48-67 who associate the following traits with products made in
High quality
Boring Reliable
80%
Built/made
Ordinary with pride
70%
60%
50%
40%
Unreliable 30%
Interesting
20%
10%
Mass- New and
produced 0%
different
Cheap Trendsetting
Cutting-edge
Poorly made
Poor safety Stylish

standards
43
FIGURE 1N:
Factors that influence consumer opinion of China (U.S.)
Extent to which each of the following impact American opinions of China
BIG IMPACT
Chinese human
rights policies
Chinese government
Chinese workers’ rights
China’s global influence

on the economy
News/media coverage
(“Made in China”)
about China
Chinese environmental
practices
Traditional Chinese/ Chinese
NEGATIVE herbal medicine celebrities POSITIVE
OPINION OPINION
Chinese
philosophy Beijing Olympics opening Chinese restaurants
ceremony
Chinese brands
Average Chinese citizen
Chinese martial arts Chinese-American

Chinese films celebrities
Chinese Olympic athletes
SMALL IMPACT
44
FIGURE 1O:
Factors that influence consumer opinion of China (U.K.)
Extent to which each of the following impact British opinions of China
Chinese human
rights policies BIG IMPACT
Chinese workers’ rights
China’s global influence

Chinese government on the economy
Chinese environmental
News/media coverage practices
Chinese restaurants
about China
(“Made in China”) Traditional Chinese/
NEGATIVE herbal medicine POSITIVE
OPINION OPINION
Average Chinese citizen Chinese martial arts
Beijing Olympics
Chinese opening ceremony
celebrities
Chinese-American celebrities Chinese
Chinese Olympic athletes philosophy
Chinese brands
Chinese films
SMALL IMPACT
45
FIGURE 1P:
Reasons for low opinion of Chinese brands (U.S.)
Percentage of American adults who agree with each of the following
45
Chinese brands aren’t
the news/media
48
with products that
are “made in China”
and feel Chinese
61 57%
brands would be a
58
similar quality
47 50
Items made in China
tend to get recalled
51 52%
56
40
I have personally had
a bad experience with 24 31%
Chinese brands
29
37
I’m not very
impressed with
Chinese companies
38 41%
in general
50
46
FIGURE 1Q:
Reasons for low opinion of Chinese brands (U.K.)
Percentage of British adults who agree with each of the following
59
Chinese brands aren’t
the news/media
59
with products that
are “made in China”
and feel Chinese
41 28%
brands would be a
53
similar quality
22
Items made in China
tend to get recalled 22 22%
23
47 28
I have personally had
a bad experience with 19 23%
Chinese brands
23
22
I’m not very
impressed with
Chinese companies
30 26%
in general
27
47
FIGURE 1R:
Attitudes toward China’s economy and government (U.S.)
61
The rise of the
Chinese economy in
comparison to ours
64 65%
makes me anxious
70
59
I am anxious about
increased Chinese
investment
60 63%
in my country
69
47 67
71 70%
71
51
government 40 40%
deals in China
29
60
China is taking
jobs in my country
68
56
I would work for a
opened up an office
53 53%
in my country
51
48
FIGURE 1S:
Attitudes toward China’s economy and government (U.K.)
53
The rise of the
Chinese economy in
comparison to ours
63 60%
makes me anxious
63
47
I am anxious about
increased Chinese
investment
48 51%
in my country
57
47 64
66 64%
63
49
government 54 48%
deals in China
43
42
China is taking
jobs in my country
47
66
I would work for a
opened up an office
72 67%
in my country
62
49
FIGURE 1T:
Awareness of Chinese brands (U.S. and U.K.)
Percentage of American and British adults who are aware of each of the following brands
Air China (airline) 28

Lenovo (computer hardware) 26
Bank of China 26
Haier (household appliances) 12
Tsingtao Beer 11
China Mobile 7
Baidu (search engine) 7
361° (sportswear) 6
Yanjing Beer 5
TCL 5
BaWang (herbal hair care) 4
Anta (sportswear) 4
Chery International (auto) 4
Gomz (electronics) 4
Great Wall Motors (auto) 3
Geely (auto) 3
Suning (electronics) 3
BYD (auto manufacturer) 3
Fu Lin Men (cooking oil) 3
Great Wall Mobile 3
Snow Beer 3
Huiyuan (soft drinks) 3
Wahaha (beverage) 2
Great Wall Wine 2
ChangYu Wine 2
Midea (household appliances) 2
Hisense (appliances) 2
Li-Ning (sportswear) 2
Yunnan Baiyao (herbal remedies) 2
Jasonwood (apparel) 2
Sina (Web portal) 2
Yili (dairy) 2
Shineway (processed meats) 2
Tong Ren Tang (herbal remedies) 2
Moutai Liquor 1
Wuliangye Liquor 1
Yurun (processed meats) 1
Mengnu (dairy) 1
Meters/bonwe (casual wear) 1
Tenceni (Internet service portal) 1
None: have not heard of any 36
Chinese brands
50
FIGURE 1U:
Awareness of Chinese brands (U.S.)
Percentage of American adults who are aware of each of the following brands

Bank of China 23
Tsingtao Beer 11
Yanjing Beer 7
China Mobile 7
TCL 6
Anta (sportswear) 4
Geely (auto) 4
Snow Beer 4
ChangYu Wine 3
Huiyuan (soft drinks) 3
Yili (dairy) 3
Great Wall Mobile 3
Wahaha (beverage) 3
Great Wall Wine 2
Sina (Web portal) 2
Mengnu (dairy) 2
Moutai Liquor 2
Wuliangye Liquor 2
Chinese brands
51
FIGURE 1V:
Awareness of Chinese brands (U.K.)
Percentage of British adults who are aware of each of the following brands
Bank of China 29

Tsingtao Beer 12
China Mobile 7
TCL 4
Yanjing Beer 3
Great Wall Mobile 3
Anta (sportswear) 3
Wahaha (beverage) 2
Great Wall Wine 2
Geely’s (auto) 2
Snow Beer 2
Hui Yuan (soft drinks) 2
Sina (Web portal) 2
ChangYu Wine 1
Moutai Liquor 1
Wuliangye Liquor 1
Mengnu (dairy) 1
Yili (dairy) 1
Chinese brands
52
FIGURE 2E :
Country personality (U.S.)
Imagined personality characteristics of the following countries by American adults
Puts in whatever hours are needed

CURIOUS/SAVVY
USA Loves to take things apart
to get the job done right
to see how they work

Would sell
Usually gets everything to put
their way Could probably their child through
“hotwire” a car college
China
Believes in tough
Knows the best Always thinking parenting to ensure
Lives for the moment restaurants in town outside the box child succeeds
More spiritually evolved
Doesn’t sweat the small stuff
Respectful Doesn’t question
Would follow to get out authority
of a burning building of nature/the Would spend days working in
environment order to make sure it is perfect TRADITION/
CAREFREE Puts their family first DILIGENCE
Would jump out of a Would be a successful
Has a good boat to save you Enjoys the simple entrepreneur
sense of humor
Always makes a
pleasures in life Japan
grand entrance when You know what to expect from them
walking into a room You could tell a secret to
Treats themselves Family stories passed
very well Could win a down through generations
Would always have Nobel Prize
a good time Would leave your
kids with for two Would give up their seat for an elderly person
weeks
Would have a well-organized closet

UK
RELIABLE
53
FIGURE 2F:
Country personality (U.K.)
Imagined personality characteristics of the following countries by British adults
Puts in whatever hours Doesn’t question

USA SUCCESSFUL are needed to get the
job done right
authority
Usually gets Believes in tough

Would sell
their way parenting to ensure
everything to put
their child through child succeeds
Would be a successful entrepreneur
Always makes a college
grand entrance when
walking into a room Treats themselves
very well
China Would spend days
working in order to
Knows the best Always thinking
restaurants in town make sure it is perfect
outside the box
Could probably
“hotwire” a car
Lives for the moment More spiritually evolved Family stories passed down
Doesn’t sweat the small stuff through generations
Could win a Nobel Prize Would have a well-organized closet TRADITION/

CAREFREE DILIGENCE
Loves to take things apart Puts their family first
to see how they work
You know what to expect from them Enjoys the simple
Japan
pleasures in life
Would always have
a good time
Would follow to get out

of a burning building Would give up their seat
for an elderly person
Would jump out of a
boat to save you Respectful of nature/the environment
Would leave your kids with for two weeks You could tell a secret to
Has a good UK RELIABLE

sense of humor
54
FIGURE 2G:
Attitudes toward Chinese culture (U.S.)
75
cultural history; I’d
65 70%
more about it
68
64
I think our culture
can learn a lot
from the Chinese
51 56%
way of life
54
I admire how Chinese 47 75

people have been
able to maintain their 72 74%
the modern world 76
There are some

72
amazing things in
China that I think
would provoke
63 69%
a lot of interest
here in the West
72
FIGURE 2H:
Attitudes toward Chinese culture (U.K.)
72
cultural history; I’d
78 74%
more about it
74
61
I think our culture
can learn a lot
from the Chinese
74 67%
way of life
65
I admire how Chinese 47 74

people have been
able to maintain their 82 78%
the modern world 78
There are some

65
amazing things in
China that I think
would provoke
78 74%
a lot of interest
here in the West
80
55
FIGURE 2I:
Impression of Chinese brands (U.S. and U.K.)
Phrases associated with Chinese brands by American and British adults
47 14
Mass-
48 Stylish 9
produced
62 8
35 13
New and
Cheap 44 13
different
53 10
26 13
Poor safety
31 High quality 12
standards
47 9
22 13
Poorly made 24 Trendsetting 10
31 9
21 12
Unreliable 22 Impressive 10
27 11
21 11
Ordinary 17 Boring 8
22 8
19 11
Interesting 14 Ethical 6
17 3
17 10
Well-designed 12 Cutting-edge 10
13 10
16 9
Built/made
Low-class 22 with pride 9
27 9
15 8
Environmentally
Reliable 12 6
sound
11 4
56
FIGURE 2J:
Impression of Chinese brands (U.S.)
Phrases associated with Chinese brands by American adults
50 19
Mass-
51 Stylish 8
produced
64 10
35 16
Cheap 47 New and
15
different
52 13
31 18
Poor safety
37 High quality 10
standards
52 10
28 13
39 11
28 13
35 12
23 14
24 11
22 13
21 4
20 11
15 12
22 11
Built/made
30 9
17 7
Reliable 9 Environmentally
7
sound
12 5
57
FIGURE 2K:
Impression of Chinese brands (U.K.)
Phrases associated with Chinese brands by British adults
43 9
Mass-
45 Stylish 10
produced
60 6
35 11
New and
Cheap 41 10
different
54 7
21 8
Poor safety
24 High quality 13
standards
41 7
16 12
23 7
15 11
19 10
18 8
20 5
16 9
13 2
14 9
10 7
11 8
Built/made
23 9
12 8
Reliable 15 Environmentally
4
sound
10 3
58
FIGURE 2L:
Country comparison of ‘student’ personas (U.S. and U.K.)
Imagined student personas of the following countries by American and British adults
ECCENTRIC
Thailand
Brazil
The shy kid The awkward kid
Best looking student

India The artist UK
The rebel The class clown
SMART/ The cheater COOL/

QUIET The copycat
REBEL
The cool kid
in the class
The jock
The geek
China Class president
USA
Top of the class Japan
(best grades/marks)
LEADER
59
FIGURE 2M:
Country comparison of ‘student’ personas (U.S.)
Imagined student personas of the following countries by American adults
ECCENTRIC
Thailand
The awkward kid

Brazil
The shy kid
India
UK Best looking student
The artist
The class clown
The rebel
SMART/ The cool kid COOL/
in the class
QUIET The copycat The cheater REBEL
The jock
The geek
Top of the class (best grades/marks) Class president

USA
China
Japan
LEADER
60
FIGURE 2N:
Country comparison of ‘student’ personas (U.K.)
Imagined student personas of the following countries by British adults
ECCENTRIC
Brazil
Thailand
Best looking student
The artist
UK
The awkward kid
The class
The shy kid clown The rebel
India The cheater

SMART/ COOL/
QUIET REBEL
The cool kid
The copycat in the class
The geek
The jock
China
Japan Class president
Top of the class (best grades/marks)

USA
LEADER
61
FIGURE 2O:
Interest in types of Chinese brands (U.S. and U.K.)
Percentage of British and American adults who are interested in trying Chinese
brands in each of the following categories
28 Chinese/ 17
Food/ martial arts
23 12
beverages movies
34 7
28 17
Video games 16 Music 8
8 6
26 17
Electronics Cars/
26 16
automobiles
24 8
25 16
Clothing 18 Sporting goods 13
20 10
24 15
Skin care
Appliances 22 9
products
18 11
21 14
Hair care
Herbal/traditional 19 8
products
Chinese medicine 22 10
20 12
Alcohol (beer, Online services
10 (social networking, 7
wine, liquor)
17 online search) 5
18 9
Martial arts Banking/financial
10 products and 5
sports
7 services 4
62
FIGURE 2P:
Interest in types of Chinese brands (U.S.)
Percentage of American adults who are interested in trying Chinese
35 20
Cars/
Video games 19 automobiles 15
10 7
30 18
Food/
beverages 18 Music 8
28 7
27 17
Appliances
17 Sporting goods 10
14 7
26 Chinese/ 17
Electronics 26 martial arts 13
movies
21 7
26 16
Skin care
Clothing 15 products 12
15 10
21 13
Alcohol (beer, Hair care
10 7
wine, liquor) products
12 10
Herbal/ 21 Online services 13

traditional (social
21 networking, 7
Chinese
medicine 24 online search) 5
21 Banking/ 11
Martial arts financial
sports 8 4
products and
8 services 3
63
FIGURE 2Q:
Interest in types of Chinese brands (U.K.)
Percentage of British adults who are interested in trying Chinese
27 16
Food/beverages 28 Music 7
40 6
26 15
Sporting
Electronics 26 goods 15
26 12
25 14
Hair care
Clothing 21 10
products
24 9
21 14
Video games Cars/
13 automobiles 16
7 9
Herbal/ 20 14
traditional Martial arts
17 11
Chinese sports
medicine 19 5
20 13
Appliances Skin care
27 products 7
22 12
18 Online 10
Alcohol (beer, services (social
10 networking, 7
wine, liquor)
23 online search) 5
Chinese/ 17 Banking/ 8
martial arts financial
10 5
movies products and
6 services 5
64
JWT: JWT is the world’s best-known marketing communications brand. Headquartered in New York, JWT is a true global network
with more than 200 offices in over 90 countries employing nearly 10,000 marketing professionals.
JWT consistently ranks among the top agency networks in the world and continues a dominant presence in the industry by staying
on the leading edge—from producing the first-ever TV commercial in 1939 to today, developing award-winning branded content for
brands such as Johnson & Johnson, Diageo’s Smirnoff, Macy’s, Ford and HSBC.
JWT embraces a “worldmade” philosophy, making things inspired by the world through blending technological innovation with
international imagination.
JWT has forged deep relationships with clients including Bayer, Bloomberg, Brand USA, Cadbury, Diageo, DTC, Ford, HSBC, Johnson
& Johnson, Kellogg’s, Kimberly-Clark, Kraft, Nestlé, Nokia, Rolex, Royal Caribbean, Schick, Shell, Unilever, Vodafone and many
others. JWT’s parent company is WPP (NASDAQ: WPPGY).
JWTIntelligence: JWTIntelligence is a center for provocative thinking that is a part of JWT. We make sense of the chaos in a world
of hyper-abundant information and constant innovation—finding quality amid the quantity.
We focus on identifying changes in the global zeitgeist so as to convert shifts into compelling opportunities for brands. We have
done this on behalf of multinational clients across several categories including pharmaceuticals, cosmetics, food, and home and
personal care.
Remaking ‘Made in China’ CONTACT:

Written by Jessica Vaughn Ann M. Mack
212-210-7378
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F - Remaking Made in China - 08.14.2012 PDF

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REMAKING

Remaking “Made in China”............................................................................................... 4

External Roadblocks to Expansion..................................................................................... 6

Internal Roadblocks to Expansion ................................................................................... 12

Overcoming the Roadblocks........................................................................................... 16

EXPERTS AND INFLUENCERS*

TOM DOCTOROFF, DOUGLAS YOUNG,

*See Appendix to learn more about these experts and influencers.

The shift from China as the world’s factory to China as a

Image credit: Jessica Vaughn 4

• Lenovo, expected to become the world’s largest PC

Image credit: Jessica Vaughn 6

Poor safety Stylish

Image credit: Jessica Vaughn 8

Chinese workers’ rights China’s global influence

News/media coverage Chinese restaurants

Little differentiation between “Poorly manufactured in FIGURE 1C:

Appendix, Figures 2I-2K.)

products that are ‘Made in China’ and feel Chinese brands

Image credit: twicepix 10

FIGURE 1D: Adversarial political and economic relationship: Further

With so much China-bashing going

Image credit: Jessica Vaughn 11

Image credit: Jessica Vaughn 12

China’s current five-year plan aims to

Expansion is especially challenging for private It is a catch-22: Companies big enough

Image credit: dcmaster 14

If [international brands] can charge

Image credits: Jessica Vaughn 15

Image credit: Jessica Vaughn 16

Image credit: Li-Ning 17

“Proudly Made in China” is

Image credits: OSPOP; Jessica Vaughn 18

Image credits: ChangYu; Bosideng 19

USA SUCCESSFUL China

These spheres of positive perception have been largely FIGURE 2B:

The mission of Hong Kong-based Goods of Desire, which

Chinese companies only make products, and none of them

Image credit: Goods of Desire 21

Meanwhile, spurred by both Western and domestic businesses, there’s been a

I believe that global

Image credits: Huili; Feiyue; Li-Ning 22

For today’s youth, China doesn’t live only in textbooks

Made in the USA – Gen X

Made in Japan – Millennials

Made in Japan – Gen X Made in Japan – Boomers

Made in India – Boomers

It’s not just that the technology is pulling people together. …

Lenovo smartly tapped into the global

Drive innovation and lead categories: Developing a culture of innovation remains a

Image credit: Eric Nishio; Lenovo [1], [2] 25

Technology companies are indeed leading the way. This year,

Image credits: Lenovo; Huawei 26

Appliance manufacturer Haier, dubbed “a leader in Chinese innovation” by Booz &

Ride on international brand

Hong Kong-based Goods of Desire

Image credits: Haier; BYD; Goods of Desire 27

A few Chinese brands including Lenovo and TCL

Image credits: Swatch; Anta; Meters/bonwe 28

Currently the world’s top emitter of carbon dioxide,

While Western companies have gradually come to understand

Image credits: David Barrie; Haier 29

Image credit: Dave Morrow 30