Chinese firms work on their international brand image

Beijing(China)—This Tuesday was a dark day for Li Dongsheng and his company TCL Group. Its flagship TV arm TCL Multimedia Holdings Ltd said it would cut staff and trim its operations in Europe, as it struggled to build TCL into a global brand.
When the TV maker formed a joint venture with French video-technology group Thomson two years ago, one of TCL’s goals was to expand its presence in Europe and North America through the brand influence of Thomson. But in the first nine months its European business had already brought US$202 million in net losses.
That will not dampen Li’s enthusiasm to make his brand known to the world. Nor will it prevent other Chinese companies from seeking global prominence for their brands. The brand value of one Chinese firm, China Mobile, is already big enough to place it on consultancy firm Interbrand’s global top 100 list.
“Chinese companies could catch up very fast in brand-building,” said Jez Frampton, chief executive of Interbrand, at the BusinessWeek CEO Forum yesterday in Beijing. There are parallels to be found between today’s China and Japan 50 years ago in terms of aspirations, strategies and moves to build globally known brands. Although Chinese products and services are often associated with words like “cheap” and “low quality,” many have now gone beyond that level.
China is the world’s largest manufacturing base of computers due to the low cost of labour. But Lenovo now has products and brands on a par with those of HP, Acer and Dell after 21 years of technological development, the acquisition of IBM’s PC unit and the rights to the Think brands. Many Chinese firms, poised to move onto the global stage for a bigger market and higher profit margins having already achieved success in China, are also determined to build their own brands. And learning from the experience of successful companies is a major step in their strategies to build brands.
Neusoft, the biggest Chinese technology services outsourcing firm, started 15 years ago from a joint venture with Japanese partner Alpine.

—The Daily Mail-China Daily news exchange item