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Chinese brands look to crack Europe

Thursday, December 15, 2011 - 02:44

Dec. 15 - China's most valuable brands - its huge, state-controlled companies - have clout at home but little fame abroad. As Chinese firms look to expand to Europe, they have to challenge preconceptions about brand China. Joanna Partridge reports.

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With 1.4 billion consumers China's home-grown brands have a huge market on their doorstep. And while its best-known companies have considerable clout at home, very few are household names overseas. China's most valuable brands are usually huge, state-controlled companies from telecoms to financial services and the internet. And they're growing fast says Doreen Wang from brand consultancy Millward Brown. (SOUNDBITE) (Mandarin) DOREEN WANG, GROUP ACCOUNT DIRECTOR OF MILLWARD BROWN CHINA, SAYING: "China's top 50 brands are worth nearly 325 billion U.S. dollars, taking up more than 5 percent of China's GDP. This year's top 50 Chinese brands grew 16 percent in total value - that's twice the speed of China's economic growth." Millward Brown says 80 percent of consumers outside China can't name a Chinese brand. And that creates a challenge when the brands look to expand abroad - with many now targeting Europe. A recent survey by Calling Brands found made in China carries certain preconceptions, says CEO Dan Bobby. SOUNDBITE: Dan Bobby, CEO of Calling Brands, saying (English): "Most Western European consumers can only really associate Chinese brands with being low price, and I need to point out that low price does not necessarily mean good value. When we asked those European consumers how important low price was in their decision-making criteria, it comes eighth with things like reliability, trust, quality much higher up in their decision-making criteria. So for Chinese brands already there's quite a big barrier to overcome." Computer maker Lenovo Group is one brand that is well known beyond China's borders. Lenovo bought IBM's PC business in 2005. While 1 in 3 computers in China is made by Lenovo, they are looking to grow globally says Charlotte West from Lenovo UK. SOUNDBITE: Charlotte West, Head of Communications, Lenovo UK, saying (English): "We don't think of ourselves particularly as a Chinese brand, it's much more a of global feel in the company. compared to perhaps some other big Asian brands like Sony. When you walk into the office, it doesn't look like a Chinese company, it's lots of Western faces and I think that our ethos is around the Chinese behaviors and work ethic that we have but not necessarily as a Chinese brand here in the UK." Calling Brands says Chinese firms need to open up more in order to break out of their home market. But revealing more about company practices doesn't come easy. Joanna Partridge, Reuters

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Chinese brands look to crack Europe

Thursday, December 15, 2011 - 02:44