Top Biz News

Brand development needs better environment

By Li Huayu (chinadaily.com.cn)
Updated: 2006-08-16 10:11

After years of continuous development, China now has many brands widely known both at home and abroad, but the environment for brand development is yet to be improved, according to a source with the Ministry of Commerce.

Though some of Chinese time-honored brands have over one thousand years of history, the actual brand operations in the country only started at the end of 1970s. The reform and opening-up became a turning point of China's entire economic development, and since then enterprises began market-oriented operations. With the increasingly fiercer competition, Chinese enterprises have gradually increased brand awareness.

During the past over 20 years of brand practice, Chinese enterprises have made great progress in terms of brand building.

Up to now, quite a number of companies, such as Haier, Lenovo, and Bank of China, have entered the list of the World's Top 100 Brands. Though their brand value cannot match that of world-renowned brands yet, the gap between the two is dwindling every year. In April 2006, China Mobile ranked the fourth among the world's top brands rated by Millward Brown, a famous multinational marketing and research institute.

In the industries of home appliances and brewery, Chinese brands enjoy a competitive edge and gradually overtake foreign brands by establishing better cognition, reputation and preference.

Domestic enterprises have built up brand awareness. Consumers also establish a better understanding of brand ownership. Enterprises know more about brand connotation and brand equity and begin to think about how to make brands go abroad and boost their international competitiveness.

However, there are many aspects yet to be improved in terms of brand building, the source said.

First of all, there are numerous brands, but only a few become world-renowned. Statistics from the Administration of Industry and Commerce show that by the end of 2005, China had altogether 2.50 million registered trademarks, among which 2.06 billion were locally produced products.

However, on the World's Top 500 Brands announced by the World Brand Lab on May 17, 2006, only six Chinese brands were in the list. Among them, Haier ranked No. 86, the only Chinese enterprise among top 100. Chinese brands scored zero among the Most Valuable 100 Brands Worldwide for the year 2005 announced by the Business Week, US.

Secondly, self-owned brands contribute little to foreign trade. In 2005, China's exports reached US$762 billion, but products with Chinese brands only took up a small slice while primary products still dominated the exports. Among various import and export enterprises in China, fewer than 20 percent have their own trademarks. Export of self-owned products nationwide accounted to less than 10 percent of the total export value. By trade pattern of export products, processing trade took up about 50 percent, and more than half of general trade was from OEMs.

Thirdly, quite some famous trademarks have been registered by foreign countries. Incomplete statistics from related authorities show that 15 percent of Chinese famous brands were registered by foreign countries, among which about 200 trademarks were registered by Australia, about 100 by Japan, and over 80 by Indonesia.