Where Is China's International Brand?

"Take a quiz: think of a Chinese brand. Japan has SONY, Germany has BMW, Korea has Samsung, China has... "

This is the beginning of the front page article of the US Washington Post in May 25th. This is not a humiliation or ridicule of "made in China". Although almost every American family uses Chinese products, few Americans can tell Chinese brands.

This is no match for China's economic power and export power status, and is not a kind of alarm. In Washington Post's words, this means that China can only engage in low-end factory production, and "overseas designers and engineers get huge profits". Take Apple's highly configured iPhone phone made in China for example. It sells for 750 US dollars in the US market, of which only 25 US dollars belong to China; for example, the Nike sports shoes produced in China, for example, only 4 cents of the value of 1 dollars belong to China.

Where is the problem? It is China's lack of international brands. What is the root cause of the lack of international brands? It is because China's innovation is not enough, and the Chinese brand's desire to expand overseas is not strong enough.

First, we will not talk about innovation in the first place. We will talk about the "going out" strategy of Chinese enterprises. Among them, the desire is not strong, and it can be seen from two aspects: positive and negative. On the positive side, China is the main emerging economy with the fastest growing speed. Chinese enterprises are naturally more willing to develop in familiar local markets. I have heard more than one entrepreneur say that the huge market in China is not done to expand the unknown overseas market. But on the contrary, the Chinese market is still only part of the world's big market. It is famous only in the Chinese market but not in the overseas market. The result is the lack of famous international brands in China. Therefore, in the impression of many foreigners, "made in China" is cheap and low-end products.

Lack of experience has proved many cases. The acquisition of French companies from TCL led to a huge loss in its own right, and the acquisition of South Korea's Twin Dragons by Shanghai automobile was useless. It can be said that over the past decade or so, overseas mergers and acquisitions of Chinese enterprises have generally been less successful and more losers. There are indeed reasons for enterprises themselves. For example, a Chinese company bought a major American lawnmower company in the United States, but in the end it went bankrupt. Why? In the American media, "this Chinese company didn't even know that Americans buy lawnmower in spring."

But are there any other factors? The Washington Post article analyzes why China lacks international companies. "The analysis of executives of Chinese companies shows that they spend much more time on government officials than they spend on customers, which are very important to China's profitability, and the latter is the key to achieving international success."

In addition, the politicization and demonization of some Western politicians, media and losers often result in the failure of Chinese enterprises to expand their M & a overseas. Prior to CNOOC's acquisition of the United States, Unocal's lessons, after a series of mergers and acquisitions overseas HUAWEI blocked, even if Lenovo successfully acquired IBM's Thinkpad notebook computers, the Anti China public opinion in Capitol Hill also forced the US government departments to terminate the use of Thinkpad computers, on the ground of "endangering national security".

Are these worthy of reflection by Chinese enterprises, the Chinese government and foreign governments that have been shouting for China to open up the market?

If it is necessary to find a star with considerable international brands from Chinese enterprises, Lenovo is undoubtedly the most likely one. But Lenovo's M & A case may still have its particularity. It has not succeeded in developing a larger overseas market, but has helped to stabilize its position in the Chinese market through overseas brand effect and technology. In other words, Lenovo's mergers and acquisitions did not really "go out", but realized the "Introduction and feet". Geely's recent acquisition of Volvo is not the way to go.

Internationalization is an irreversible trend of world economic development, but Chinese enterprises are still sticking to the local market. In evaluating China's "going global" strategy, KennethDeWoskin, chairman of DDT China research and insight center, predicted that looking forward to 10 years, "if Chinese enterprises are still in China, it is difficult to see how big the development of Chinese enterprises will be."