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'Made In China' - Soon The World's Hottest Brand

Wednesday March 31, 1:49 PM

HONG KONG (AP)--What's in a name? When it comes to product recognition: Billions of dollars.

Asia's big industrialized economies, Japan and South Korea, have long built brands known around the world. Hyundai and Samsung have joined Toyota and Sony as household names almost everywhere.

Now businesses in other parts of Asia are trying to catch up.

Many already manufacture top-brand products far cheaper than in their places of origin in the U.S., Europe or Japan. Most do so under contract or license, though some are blatant counterfeiters. Cut-rate but surprisingly good knockoffs of Gucci bags or Rolex watches are found in street markets across the region.

But things are changing, and industry experts say China's fast-emerging economy may be the one destined to develop superbrands for some of its own products.

China's top computer maker, Lenovo, is making a huge push by becoming an international Olympics sponsor, as official computer equipment and service provider for the 2006 Winter Games in Turin and the 2008 Summer Games in Beijing.

By joining the Olympics sponsorship club with elite global brands including Coca-Cola, McDonald's, Panasonic and Visa, Lenovo Chief Executive Yang Yuanqing says his company will "demonstrate its technology and products to the world, while promoting social values and pursuing its corporate objectives."

Analysts predict an even brighter future, saying one day China's own cars could be as well known as Fords and Nissans, or its electronics could be as recognizable as Panasonic.

Their thinking: China can make just about anything cheaply, and if a Chinese company can go national in the world's most populous country, it may have the bulk to go international if it can maintain predictable quality.

Much of what China does is anonymous work, like sewing cheap clothing for export under brand names or little-known names. "Made in China" would appear in the fine print.

"One tends to think of dingy factories in China making sports shoes for Nike or whatever, and paying people very little, but the guys who run the factories are beginning to recognize the value of brands," said branding expert Terence Oliver in Tokyo.

"What you're seeing in China is what you're seeing in other developed countries, only it's happening so much faster," said Oliver, the Asia-Pacific chief executive for the Interbrand consultancy. "They're gradually realizing that making things for other people is just a first step and it's not particularly profitable. You're essentially making commodities."

With China opening its economic doors as a member of the World Trade Organization, big brands from outside are pushing their way in, enticed by a potential market of 1.3 billion people. Never mind that most Chinese can't afford foreign products. Millions can and the allure is irresistible.

At the same time, a few Chinese companies are moving into overseas markets and taking their names with them.

The appliance maker Haier is a big exporter, selling small, cheap refrigerators and washing machines through retailers including U.S. giant Wal-Mart. In one high-profile ad, Haier is now pushing its products with a huge sign in Tokyo's upscale Ginza shopping district.

"The concept of a brand - if we look back a decade or so - was much more of a Western concept," said Scott Kronick, the China managing director for Ogilvy Public Relations Worldwide. "But now it's evening out at a quick pace."

Kronick says the 2008 Olympics will be Beijing's chance to show off "China Inc." to the world as the Chinese government pushes select companies it wants to play a bigger role in the global economy.

"They see this as their opportunity to reach out to the world and to show the world that they're ready to compete on a global stage," Kronick says.

For years key Asian brands have included air carriers, which get a certain amount of automatic recognition as they fly around the world with their names painted to the sides of their jets.

Singapore Airlines and Hong Kong's Cathay Pacific Airways have sought to set themselves apart with much publicity of their world-class service.

Another Singapore success story is OSIM, which sells massage chairs and other healthy lifestyle products all over Asia.

The chairman and chief executive, Ron Sim, already had an eye on the world when he started the company in 1979 with a unique name.

"Sim is my surname, and the O is actually the globe," Sim said. OSIM now sells as far away as the U.S. West Coast and the U.K. and the name itself is been valued at S$203 million (US$1=S$1.6780)

The Philippines has Jollibee, a fast-food chain that claims to outdo McDonald's by more than 2-1 on its home turf - boasting a 65% market share. Jollibee has expanded elsewhere, into markets including Hong Kong and Brunei where it's followed Filipino migrant workers who toil abroad for hard currency.

One of the best known Chinese to catch onto the value of brand names is gymnast Li Ning. Li scored six medals in the 1984 Los Angeles Olympics - three golds, two silvers and a bronze - and now is the undisputed marketing king of Chinese sports clothing.

There's also Qingdao beer, known the world over to Chinese restaurant aficionados but trying to become even bigger at home by staging a series of acquisitions of smaller regional breweries.

Oliver predicts the branding will just get bigger.

"You're going to see Chinese cars," he said.

Copyright and Source: Dow Jones & Company Inc.

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