While Huawei and Xiaomi have had global success, building the Made in China brand must go beyond big tech
- As part of its economic transformation, China needs to encourage brand building. For the best lessons, it must look beyond its high-profile tech titans and at traditional manufacturers like home-appliance label Casarte
But the road ahead is challenging. Although a growing crop of businesses actively pursue brand strategies, often with local authorities granting support in earnest, many lack a coherent conceptual framework regarding brand building. What is more, huge regional discrepancies defy a uniform approach to building brands.
Brand strategies should be tailored to local economic conditions. In less developed areas, brands basically function as a guarantee of product quality and convey trustworthiness, while in more affluent regions, brands exemplify a lifestyle that target consumers are led to aspire to.
These attributes undergird the brand proposition that over the years has been peddled to China’s urban elite in advertisements associating Casarte with a coveted upper-middle-class lifestyle.
As it evolves from an obscure French-sounding name to a leading home-appliance producer in China with a market share of 43 per cent in high-value segments (washing machines, refrigerators and air conditioners priced at 10,000 yuan, or US$1,415, and higher), Casarte’s brand strategy has been pored over at business schools the world over.
So what can be learnt from this strategy? Is Casarte’s recipe for success replicable?
The answer may well be, yes. Casarte’s stellar performance results from multiple forces at play, the first being alignment of a clear brand identity with the underlying management structure. Its brand promise – consumers can expect class, quality and reliability from every Casarte product – would ring hollow unless it was consistent with user experience.
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According to this philosophy, Haier employees can be more responsive to the evolving market environment and consumer needs if they are empowered to sidestep hierarchical rules, innovate in areas beyond their assigned roles and directly share in the profits they help to create.
Encouraging employees to take the initiative instead of just doing the bidding of their superiors is essentially antithetical to a command-driven hierarchical corporate culture.
Implementation of these insights entails disruption to all aspects of management, from marketing and human resources to supply chain and production. In the absence of the desire to embrace disruptive changes and the financial wherewithal of its parent Haier Group, Casarte would not have fared so well in the 13 years since its founding.
The Casarte story shows that a supportive management structure is indispensable to successful brand-building. This is something many entrepreneurs tend to overlook in their misguided belief that branding is tantamount to marketing. As a result, many do not give branding the more exalted position it deserves in organisational design.
Now that it is Beijing’s stated aim to swell the ranks of national champions like Huawei and Haier, we ought to take note that this is a two-pronged strategy involving nation-branding and national branding, which are complementary.
Chinese brand managers can look to their neighbour to the east for some clues. In 2009, South Korea set up the Presidential Council on National Branding chaired by then-president Lee Myung-bak.
Its mission was to lift the country’s global profile. Many leading Korean firms, such as Samsung, Hyundai and LG, have benefited enormously from this drive and are boosting the nation’s reputation overseas.
He Jiaxun is head of the Institute for Nation(al) Branding Strategy at East China Normal University and concurrently the Chinese dean of the university's Asia-Europe Business School