Chinese Companies Lack Confidence in Brand Reputation

October 16, 2012

This article is included in these additional categories:

Analytics, Automated & MarTech | Asia-Pacific | Brand Metrics | Data-driven | Europe & Middle East | Global & Regional

Less than 1 in 4 Chinese executives believe that their brand’s strength and reputation is an advantage for them as they target international markets for sales or investment, according to [pdf] a new report from Ernst & Young. These companies certainly have an uphill battle to climb, at least within the US: while a plurality (47%) of Chinese executives cited product and service quality as an advantage, recent survey results from Perception Research Service indicate that a majority of US shoppers who notice “Made in China” claims are less likely to buy those products, based largely on quality concerns.

Interestingly, Chinese shoppers don’t report an overwhelmingly positive influence from a “Made in China” claim, either. Only about 3 in 5 who noticed such a claim said they are influenced positively by it. By contrast, among American shoppers who notice a “Made in America” product claim, 76% say they are more likely to purchase the product.

US Not The Top Land of Opportunity for Chinese

For Chinese firms looking to expand overseas, the US isn’t the top destination. Instead, 32% say Western Europe presents the best growth opportunities over the next 3 years, while 29% feel the same way about the Middle East and North America. Only slightly more than 1 in 5 say that the US or Canada is a top growth opportunity. Still, Chinese executives were more likely to see the US or Canada as a prime opportunity than the average of all executives surveyed across 9 Asian markets, of whom just 16% saw growth potential.

China Figures Prominently in US Company Strategies

While Chinese firms have a fairly tepid outlook on growth opportunities in the US, American companies doing business in China see those operations as a hugely important piece of their operations. Data from a US-China Business Council (USCBC) study released in October [pdf] finds that 94% of the USCBC member businesses surveyed rank China among their top 5 global market priorities, including 22% who say the country is their top priority.

Here’s one good reason why: an impressive 89% of respondents said their Chinese operations are profitable, and that figure has been above 80% at least as far back as 2006. Also, three-quarters say their China-based operations are either more (45%) or as (30%) profitable as their overall operations.

A study released in August by Duke University’s Fuqua School of Business found that Canada and China topped the list of growth markets, according to the CMOs surveyed. 24.2% of respondents said that Canada was their top growth market (up from 16% in the previous survey 6 months earlier), while 21.5% tabbed China (up from 15%).

About the Data: The Ernst & Young survey was conducted by the Economist Intelligence Unit in March and April 2012, and surveyed executives from companies headquartered in China, South Korea, Hong Kong special administrative region, Indonesia, Malaysia, Singapore, Taiwan, Thailand, and Vietnam. There were 617 total responses, including 146 from mainland China.

The Perception Research Services International research for “Made in the USA” was conducted in July 2012 among more than 1,400 consumers, aged 18 and over, drawn from a nationally representative online sample in the US. The “Made in China” study was conducted in August/September 2012 among approximately 500 consumers, aged 18 and over, drawn from a nationally representative sample in China.

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