Consumer electronics company Lenovo has topped a list of the most popular Chinese brands as perceived by people outside China.
Smartphone brand Huawei ranks second, with e-commerce company Alibaba third in the list published Tuesday by advertising agency group WPP and its research arm Kantar Millward Brown. The companies’ “BrandZ Top 50 Chinese Global Brand Builders 2018” report combined Google search data with an online survey of 395,000 consumers to find the Chinese brands highest in awareness and consideration in the U.S., Japan, Australia, U.K, Spain, Germany and France.
But even though Lenovo is the world’s largest PC maker and has dual headquarters — one in Beijing and the other in Morrisville, North Carolina — there is still a way to go for it and other Chinese brands to become known by U.S consumers, according to Doreen Wang, global head of BrandZ at Kantar Millward Brown.
So is the perception of “Made in China” changing outside China itself?
“I always think it takes time… One of the major challenges (is) still (that) overall awareness of Chinese brands is still very low, it’s not very high and people can probably only name a handful of Chinese brands. And I believe that the majority of the population in the U.S. probably couldn’t even name one Chinese brand,” Wang told CNBC by phone.
Younger people’s perceptions of “Made in China” are more positive than older generations’ impressions, she added.
“Younger consumers are turning to brands such as Lenovo, Alibaba and JD.com because they are united by their love of cool, affordable products and services regardless of their country of origin,” she said in an emailed statement.
Things are changing. A third of exhibitors at January’s Consumer Electronics Show (CES) in Las Vegas were from China, and often the CEOs Wang speaks with do not see their companies as solely Chinese brands.
“So, from day one… they see themselves as a global brand. So (the strategy is) if I have (the) opportunity I will establish my footprint in 30, 50 countries simultaneously. Rather than (thinking) I need to build myself really, really big in China before going global,” she said.
Wang cited China’s leading smartphone maker Huawei as one such brand making inroads at CES, with a presentation showing people that its name is pronounced “wow way.” Indeed, the company could be set to overtake Apple in the global smartphone market, according to IDC analyst Francisco Jeronimo.
And while consumer electronics brands dominate the BrandZ ranking, mobile gaming and artificial intelligence companies can move “way faster” than these traditional categories, Wang said. Two Chinese mobile gaming companies — Elex and Cheetah Mobile — make the top 10. Cheetah Mobile claims to have more than 1 billion mobile active gaming users and says that its Clean Master antivirus software has had 3 billion downloads.
One strategy that will work well for Chinese brands expanding to developed nations is to start marketing entry-level products, Wang said.
“We believe that the disruption (is) always happening at the low end… When these brands are going to Western countries and they always start their journey and start the disruption at the low end… Very similar as Honda, Toyota, 30, 20 years ago.”
“People think ‘OK the price is low, but let me give it a try,’ and then it’s the product that is above their expectation, so they start to use more and more and then these brands are gradually moving up the value chain,” she said.
The top Chinese “brand builders” as listed by WPP’s BrandZ rankings
1. Lenovo (consumer electronics)
2. Huawei (consumer electronics)
3. Alibaba (e-commerce)
4. Xiaomi (consumer electronics)
5. Air China (airlines)
6. Elex (mobile gaming)
7. Anker (consumer electronics)
8. Haier (home appliances)
9. Hisense (home appliances)
10. Cheetah Mobile (mobile gaming/internet services).