The export success of China's manufacturing sector is undeniable, but many people in the west would be hard-pressed to name a successful Chinese exporter.
That's because few Chinese companies have invested in building a brand and the list of Chinese manufacturers whose names are familiar in the west is a pretty short one — Lenovo, Huawei, TCL and maybe a couple of carmarkers like Chery.
According to this Xinhua story, only 20% of Chinese exporters have their own brands and self-owned brands accounted for no more than 10% of total exports.
Consultants have long argue that Chinese manufacturers needs to move up the value chain and distance itself from the “pile 'em high, sell 'em cheap” image that has worked well in the past but now risks backfiring on the country's image because of trade disputes and recent product quality scares — see this EngagingChina story for more.
In particular, Chinese companies being urged to get out of subcontracting and focus on making their own branded products, because the profit margins in manufacturing for foreign brands are pretty slim. One apocryphal story has it that to buy its first Airbus 380, China had to export 800m shirts.
Quality is at the heart of brands and so fostering brands would undoubtedly help boost product quality, so helping allay growing concerns in the west about Chinese products. “China is seeking to turn from price competition to quality competition,” says Ai Feng, vice president of China Quality Association .
The importance of branding is now more widely recognised in China and at the highest levels. Last month at a national meeting on quality control, Premier Wen Jiabao called on domestic firms to improve product quality and build their own world-class brands.
China's commerce ministry has stepped up efforts to promote brand strategy, mainly involving the improvement of the brand appraisal system, protection of IPRs and a brand promotion system.
Ultimately, China hopes that the “Created in China” label could be as common as “Made in China” is today. Wishful thinking?