Foreign Companies Dominate Brand Recognition List In China

August 6, 2012Chinaby EW News Desk Team

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Chinese consumers are far more familiar with foreign brand names compared to their own home-grown companies, reported the China Daily on Monday, after just three local brands managed to make it among the top twenty most recognised brands in a consumer awareness survey.

The latest Campaign Asia-Pacific 2012 Asia's Top 1,000 Brands report showed that Apple Inc. was the most recognised brand in China for 2012, after piping Nestle, Chanel, Sony and Samsung for the top spot.

On the other hand, traditional Chinese medicine pharmacy Beijing Tong Ren Tang was the top ranked local Chinese brand at 11th spot, while instant noodle brand Master Kong Holdings was 14th, and home appliance giant Haier Group came in at 15th.

The report highlighted the decrease in brand awareness among Chinese consumers for their own local brands, as eight Chinese companies had managed to make into the top twenty last year.

Household brand names such as Baidu Inc and Mengniu Dairy Co were the worst to suffer, after coming in the top ten last year, but dropping to 37th and 89th place in the latest rankings. At the same time, noChinese brand was listed among the top 100 throughout the Asia-Pacific region.

This "reiterates the challenges Chinese brands are facing to gain consumer recognition beyond their home markets,” said Jolene Otremba, reports editor of Campaign Asia-Pacific.

Otremba added that the performance of Chanel, who was listed among the top ten brands for the first time in Chinese history, demonstrated “a stark reminder of the exponential growth in wealth and increase in disposable income on the Chinese mainland.”

Other luxury brands such as Gucci, Armani and Louis Vuitton all saw their rankings rising up in the report. Huang Yingwen, 24, a public relations specialist working at a Beijing PR company, said that she preferred western brands over local companies due to the social status they exemplified.

"Actually, the product quality of some Chinese domestic brands is as good. But their design and marketing are always flawed. The patterns and the after-sales services always let me down," said Huang.

"Chinese brands can easily fall into the trap of being a copycat due to a lack of their own ideas or creativity, as I understand,” added  Gao Aidai, 22, a researcher at a Shanghai-based information technology firm, who stressed the perceived quality of foreign over local brands.

“But that does not exert as much influence as the quality issue. I seldom buy any domestically produced food or dairy products nowadays due to health concerns," she said.

Related: The Most Valuable Brands in China: Big At Home, Unknown Abroad

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According to Pascal Armoudom, a partner with A.T. Kearney China management consultants in charge of consumer, luxury and retail for Greater China, “the Chinese people remember the quality issues which they experienced until the 80s with Chinese products. This often resulted in a credibility issue for Chinese brands vis-a-vis the consumers in their own domestic market.”

However Chinese brands should not be disheartened, Armoudom added, as the experience gained over the coming years would only serve to enhance Chinese brand names.

"Although facing the challenges above, Chinese brands have been working hard to turn this around since the year 2000. They know that the time for delivering mass production at optimal cost as a guarantee for success is over," said Armoudom.

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