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Chinese Brands: Fong Kong or the Real Deal?

TRENDAFRiCA August 27, 2014

By Nicole Shapiro, associate director Added Value South Africa

For many, the term ‘Chinese Brand’ would be considered a misnomer – or even an oxymoron. But are we wrong?

Considering the recent rise of Chinese discount malls scattered around the country, all selling ‘Fong-Kong’ knock-offs, questionable foodstuffs and clothing that can only be washed once, few would argue against this opinion. In fact, the relevant term here might be ‘Chinese anti-brand’ – products that contradict the very principles of brand building: quality, durability, trust, performance expectations, etc.

I used to hold a similar viewpoint. However, while watching a popular cooking show adapted from the UK and Australia for South Africa, I noticed a brand that I had never seen before. It was a brand that intrigued me.

The brand in question was Haier (the programme sponsor) and with its sleek looking kitchen appliances, attractive logo and visuals, and high profile sponsorship, I automatically assumed it was yet another premium European brand looking at African expansion and growth prospects.

Being a self-proclaimed brand junkie, I embarked on some further exploration, and soon realised that I was completely wrong. Haier, the brand my brain immediately grouped together with the likes of Smeg and Miele, was in fact Chinese.

The next Chinese brand to turn my perception upside down was WeChat, another capturing Africa’s attention. Granted, apps and fad games perish as quickly as they’ve been developed, like Zynga’s Farmville. WeChat may be different.

Currently, Whatsapp is the incumbent in the local market, but many have bullish views on WeChat’s potential impact. Over the recent months, it seems to have gained momentum, with top local DJ, Gareth Cliff, opting to take a leap from radio to online broadcast via WeChat. South African users are scrambling to download the social media app following its local brand launch, with a shirtless Maps Maponyane as our WeChat guy.

These brands, and others like them, do have a future in South Africa and on the continent. In a market where appearance matters but price is often inhibiting, Chinese brands such as Lenovo, Hisense and Huawei are perfectly placed to be the next success stories.

Although many South Africans have been programmed to consider Eastern products as inferior, the rise of Korean super brands like Hyuandai, Kia, LG and Samsung are changing perceptions and widening consumers’ purchase consideration sets. WPP’s 2014 BrandZ study, Top 100 most Valuable Chinese Brands confirms this: 44% of South Africans surveyed would now consider purchasing a Chinese brand. And this trend is on the rise.

It may be a little early to predict, but if more Chinese brands learn from their successful Eastern peers, consumer options are set to expand considerably, adding an interesting dimension to an already fascinating consumer landscape. But it’s not a home run just yet – it takes a lot to win the South African (and African) market over.

So, given this, what would it take for Chinese brands to continue their upward trajectory In Africa?

  • Continue on the more-for-less mission: there’s good cheap and bad cheap; and more often than not, we know the difference. Consider Hyundai’s South African (and global) success, they built their brand by offering unbridled value – quality cars at a competitive price.
  • Remember to keep up appearances: like Haier captured my attention, Kia has done the same in the motor industry. Superior styling (employing the services of ex-German car designer) has made it difficult for locals to say no to these vehicles.
  • Relevance, relevance, relevance: in the past, part of the disdain for Chinese brands was largely attributed to their poorly dubbed advertisements with Asian landscapes, which were unfittingly transferred to our market. Such irrelevance would never get a firm grip on our shores. WeChat has shown that it can tap into local passion points and others are taking notice.

While respected Chinese brands are still a relatively new phenomenon in South Africa, acceptance of them is growing. Just as Korean brands have morphed in public perceptions from cheap and nasty knock offs to reliable and quality items, so too Chinese brands such as Hisense, Huawei and GWM can grow in public perception.

However, to do so, they have to learn the important lessons outlined above. As China becomes the new global superpower, with ever growing educational levels and first world infrastructure, let’s watch this space.

 

Source: Added Value is a strategic marketing consultancy.

 

 

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