How China’s Growth Impacts the Rest of the World

on August 12 2013 | in Trends | by | with No Comments

Pudong District, Shanghai, China, nighttime, skyline

There have been a flurry of deals that have brought Chinese firms into the international spotlight. Shuanghui bought Smithfield Farms, the world’s largest producer of pork. China’s real-estate conglomerate Wanda Group bought the UK’s Sunkseeker yacht company and the United States’ AMC Theatres. Bright Food of China bought Weetabix last year. With China’s economic expansion looming large, Marketing Magazine lists five thoughts the shifting landscape brings.

1. The acquisition of Western food brands by Chinese conglomerates can be thought of as either a “Trojan horse” or a “happy marriage.” With their acquisitions, Shuanghui and Bright Foods get trusted brand names that allow them to bypass consumer fears of food safety and quality. Likewise, Smithfield Farms and Weetabix now get access to the hard-to-reach Chinese consumer.

2. Chinese brands will become exportable. InterContinental Hotel Group, for example, developed the Hualuxe hotel brand in China. Jan Smits, the group’s CEO for Asia, the Middle East, and Africa, has suggested that as Chinese tourists look for recognizable brands overseas, in the future one of them may be Hualuxe.

3. Trade wars are likely.  “As China flexes its economic might,” Marketing Magazine cautions, “clandestine trade wars will become a normal part of the commercial environment. Brand custodians must be alert to avoid their clients becoming political pawns.”

4. To reduce negative perceptions of Chinese activity, the government may invest lots of money in quieting the panic that its economic expansion has brought about. Currently, brands that export internationally are careful to hide all forms of Chinese culture in their brands. This may change as the government sees fit.

5. What it means to be a global brand has changed forever. Chinese consumers have become so important that a brand is not considered global unless it appeals to them. But engaging Chinese consumers can be a double-edged sword. Localization is good, but too much localization may hurt brand image. A careful balance between preserving brand integrity and attaining new levels of accessibility is key.

 


photo credit: mclc books

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