Last month, at the fourth annual Prestige Brands Forum at the China Europe International Business School in Shanghai, participants discussed the difficulties China faces in branding.
“We have nothing close to Sony or Apple or Mercedes,” says Elliott Yuen, a former chief executive of the clothing brand Shanghai Tang. “We still don’t have a decent international Chinese brand.” Founded in Hong Kong in 1994 and boasting a following with its traditional designs, Shanghai Tang might be the closest thing the country currently has to a prestige clothing brand. The bigbest factor in its success has been its ability to demonstrate the value of Chinese culture in building a luxury brand.
“If Chinese companies are to go global, we must have Chinese elements and international elements,” says Francis Chen, the founder of Franz Collection, a Taiwanese-based company that makes most of its upmarket porcelain in China and sells it through more than 6,000 stores worldwide. “In China, we can build very strong and powerful [brands]. A strong brand must have its roots in its culture. If Americans didn’t drink Coca-Cola, would you? If Americans didn’t watch Hollywood movies, would you?”
Step two: add craftsmanship, or so says Edward Lu, the president of Lezare International and Montblanc‘s former China managing director. “Do Chinese companies have the best materials, the best techniques? If they do, I believe in the future there will be many global brands with Chinese ingredients,” he insists.
Michel Gutsatz, a program director at Euromed Management, a business school based in Marseille, and an adviser to The Scriptorium Company, a brand-strategy agency, phrases China’s struggles another way: “Number one is different business cultures … The other is different creative cultures.”
Gutsatz describes the European luxury brands’ opinion of creative directors as godlike, for the many tasks they juggle daily. “They manage quality, they manage public relations, they manage relationships with VIP customers, overall brand consistency … They have a power over the brand that’s very difficult to understand in Chinese culture,” he says. “We have designers [in China], people that create, that draw, but they’re like the people in the studio are in Europe, because we have different creative cultures.”
The best way to overcome differences in creative culture, it seems, is through capital. Most analysts agree China has two options if it want to develop a national brand: buy international brands and transfer the management and creative cultures or hire European brand consultancies.
“You need to build in luxury brand competencies. That can only be done by buying expensive expertise. Everyone tells me how entrepreneurs don’t like to buy expertise. But you need to buy it and pay for it. You must hire talent,” says Gutsatz.
photo credit: shanghai tang