HONG KONG/SEOUL: They thought the Olympics would be a sprint to glory but, for Chinese brands, worldwide recognition is turning out to be a marathon.
The Games could be a launchpad, as they were for Japanese and South Korean companies, but it could takes years for China’s firms to overcome negative images associated with their country.
Despite years of brand-building hype in the lead-up to the Beijing Olympics, China’s top PC maker Lenovo is still the only Chinese “worldwide” partner for the event. Buying IBM’s PC division for $1.25 billion in 2005 to fight toe-to-toe with Dell and Hewlett-Packard certainly helped.
For other Chinese hopefuls, global brand recognition — being a household name or commanding trendsetting power in developed countries — is still a long uphill slog. Branding experts argue China’s reputation for cheap goods, product scandals and its controversial political positions on issues such as Tibet are a big hindrance. “There tend to be associations between a brand and a country,” said Jonathan Chajet, Asia-Pacific strategy director at consultants Interbrand. “The challenge for a Chinese brand trying to go global is not really positioning itself, but actually to position China well.”
Still, some optimistic investors hope a superstar will be made overnight.
Former Chinese gymnast Li Ning was $30 million richer on Monday when shares in his namesake sportswear company Li Ning Co. Ltd. jumped 5 percent thanks to his starring role at the Olympics opening ceremony.
Investors snapped up shares hoping global recognition would follow rave reviews of the extravaganza of thundering drums and exploding firecrackers, which ended when Li simulated a race in mid-air to set the giant Olympic cauldron ablaze.
Li Ning aims to be one of the world’s top five sports brands by 2018 and is kitting out the Olympic teams from China, Spain and Sweden. But it is still in third place in its home market, behind both Nike and Adidas, with just over 10 percent market share, according to ZOU Marketing.
“I think it actually has more to do with hype,” Germaine Khong, an analyst at broker CIMB, said. “There’s a risk of over-expansion in the Chinese sportswear market, but Li Ning is the short-term beneficiary of the Olympics.”