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Chinese Brands Look to Crack Europe

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.

“China’s top 50 brands are worth nearly $325 billion, making up more than 5% of China’s GDP. This year’s top 50 Chinese brands grew 16% in total value. That’s twice the speed of China’s economic growth.”

Millward Brown says 80% 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 that “Made in China” carries certain preconceptions, says CEO Dan Bobby.

“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 one in three computers in China are made by Lenovo, they’re looking to grow globally, says Charlotte West, from Lenovo UK.

“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 behaviours and work ethic that we have, but not necessarily as a Chinese brand here in the U.K.”

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.