Once upon a time, launching its own brand overseas was something that many Chinese entrepreneurs could not have achieved. However, with the continuous rise of domestic raw materials and labor costs, and the decline in overseas orders, a number of factors, many Chinese factory owners have found that the development of self-owned brand into an international brand may be the only way out.
"We want to sell to the international fashion industry." Recently, Jiuxing Holdings Co., Ltd. executive director, chief operating officer Qi Leren said externally. The foundry manufacturer listed in Hong Kong has been focusing on OEM for 29 years after its founding. But five years ago, Jiuxing began to seek to promote its own brand of shoes to the international market. In 2012, the company plans to take a bolder move by opening its Stella Luna store in Paris and London.
In fact, the road to a "Made in China" brand is not smooth.
“The main obstacle is the brand.†When talking about the difficulties faced by “Made in China†toward the international market, senior brand expert and general manager of the former Tairan General Consulting Company, Lu Qiang said that mature markets such as Europe and the United States have been divided by several well-known brands. Consumers rarely buy unheard of branded products, "especially when these products also come from countries or regions that lack a 'country' brand."
If, as international marketing guru Philips Kotler once predicted, “the next 20 years will be a high-speed growth phase for Chinese brandsâ€, then at the moment, the foundry may be a new force for Chinese brand manufacturing.
Such a story has been circulating in the transformation trend of foundry companies: Two years ago, Guo Guohui, the special assistant to the president of Foxconn, the “king of foundry workersâ€, and chairman of the channel business group, had painted a “U-shaped curve†for the company. To many people's surprise, the bottom of the U-shaped line representing the thinnest profits of the company is Foxconn's most powerful foundry manufacturing business.
In fact, even if it is the "king of the foundry," Foxconn, like all companies that are stranded with low profits, is eager to try out brands and channels with higher profits at both ends. However, over the past two years, Foxconn's progress in channels and brands has not been smooth, including the flying tiger Tesco and the Wanma Pentium. Not only that, but the scale of "king of the foundry" is worse for Foxconn, and it is the so-called shipbuilding disaster.
The attempt to transform the foundry giants is not Foxconn. Pou Sheng International (Holdings) Co., Ltd. is a relatively successful example. Although the name sounds unfamiliar, as the controlling subsidiary of Yue Yuen Industrial (Group) Co., Ltd., the world's largest manufacturer of branded sports shoes and apparel, it has contracted most orders for sports brands including Nike and Adidas. Right now, through direct sales, mergers and acquisitions, etc., 2011 Pou Sheng International's direct sales and franchise stores reached 2,765 and 3,282 respectively, and there are already 24 production lines.
The outside world attributed the successful experience of Pou Sheng International: "Trust oneself and at the same time let go of acquisitions of shaped regional chains, and through the integration of the latter's channel resources, copy the successful model of the expansion of the United States in the field of sporting goods."
In the earlier stages of the transition of Chinese OEM companies, the name ANTA should not be overlooked. Before the Asian financial crisis, Anta and many shoe companies in Jinjiang produced sports shoes for multinational companies. It was an ordinary OEM factory.
According to Chen Liang, a senior brand expert, when Anta CEO Ding Zhizhong started implementing the brand strategy in 1997, the market was almost monopolized by several European and American strong brands. Ding Zhizhong opened up a new path, using marketing as a breakthrough point, first signing an agreement with the Chinese national table tennis team, employing world champion Kong Linghui as the brand image spokesperson, starting from domestic small and medium cities, and establishing his own brand and sales network. Since 1999, TV advertisements featuring Kong Linghui as the spokesperson have appeared on CCTV. Two months after the advertisement was broadcast, the nation’s orderers began to flock to the Anta factory. At the Sydney Olympics in 2000, Kong Linghui won the men's singles champion table tennis, and Anta also won a battle.
Chen Liang believes that the long-term foundry for Anta accumulated product quality, process and production equipment to enhance the foundation, access to the original accumulation of production management experience, the key to occupying the market is to create a self-owned brand, and marketing success.
"Create brand time" or only input without output Although the size of the foundry has a sense of transformation or action, but not every company's pay will be rewarded.
“The transformation of OEM companies is actually not easy, especially the road to creating their own brands is even more uneven.†Zhuang Hua (a pseudonym), general manager of Kewo Electronic Technology (Wuxi) Co., Ltd. told reporters that in general, the process of creating a brand The transition period in which a company can afford not to make money is probably two years. It may take five years from the time it takes to form a brand team to start making profits. “Continuous investment, invisible output, most transition companies are hard to survive.†."
Zhuang Hua is the parent company of Kewo Electronics, a foreign trade company mainly engaged in electrical appliance manufacturing in Suzhou. In 2005, the annual sales of vacuum cleaners for the company's OEM production reached 800 million yuan, but since 2002, the development of the company seems to have touched the ceiling. According to Zhuang Hua, competitors have mushroomed, and countless SMEs are rushing to grab orders and fight the market. “And the loss of talents to the small businesses is all processing companies. Naturally, the wages are high. Who."
In fact, talent competition, decline in bargaining power, rising costs, and loss of orders are the reasons that prompted domestic OEMs to start thinking about transformation.
"The road to OEM has been a dead end. At most it is to grab someone else's 'cake' to grab their own plate. Enterprises cannot see a sustainable future." Zhuang Hua said frankly.
There are not a few entrepreneurs and industry observers who hold the above ideas. Not only the small and medium-sized foundries where Zhuang Hua is located may encounter difficulties. Even listed companies like Jiuxing Holdings will face many challenge.
“When OEMs try to build their own brands, they will often continue to rely on traditional customers, and these customers may not be happy to see the industry and business go hand in hand with each other.†Christina, Consumer Industry Specialist, Hong Kong University of Science and Technology? Herson thinks.
Based on the above reasons, Christian said that OEMs may find it difficult to change their business model. At present, it seems that there are very few Chinese consumer brands that go overseas, and they are rare in the high-end market.
Fortunately, in recent years, China has begun to emerge with organizations and standards such as the GMC High-Quality Manufacturers Alliance, which indicates that another group-based brand idea of ​​“Made in China†to expand overseas markets is sprouting.
"'Made in China' does not lack quality products," said Pan Jianyue, general manager of Global Markets Group. "However, in the current international market, 'Made in China' is difficult, if a group of good manufacturers can Together, the establishment of industry screening standards and thresholds, together with high requirements and high standards to create a community brand, may be a more practical and feasible way."
In this regard, Lu Qiang expressed his approval and explained that companies in certain countries or regions have worked hard for a long time and formed a very high reputation in certain aspects. For example, “Made in Germany†and “German Technology†mean reliable performance. , Italian leather shoes, Swiss watches also have a strong appeal in the international market.
In Lu Qiang’s opinion, Chinese companies have not yet established a national brand, “If you reluctantly say yes, the low cost is the meaning of “Made in China.†To form a national brand with appeal, you must pass a number of companies in the international market. Success can be achieved."
"At present, even within the next 10 years, Chinese enterprises cannot rely on national brands for internationalization, and they can only rely on their own strength to build brands, so the difficulty will be greater." Lu Qiang said frankly.
The brand warfare product is still king Although the Chinese-made brand has little advantage, it does not mean that the foundry of the transformation has no way to go.
Lu Qiang believes that China's own brands will enter the international market. If it is Southeast Asia, the Middle East, Africa and other places, they may use their own brands like TCL and Lenovo, because "Made in China" in these areas is still very influential.
As for the entry into Europe and the United States and other developed countries, it is divided into two brand strategies. The first is to use its own brand, and then use low prices as a competitive means. For example, Huawei's slogan in the United States is 'all the same except price'. The premise of this is that these industries have a high gross margin, otherwise the low-price tactics cannot be used. The second approach is to acquire local brands. For example, TCL has acquired Schneider and Thomson in order to enter Europe. Lenovo's acquisition of IBM is even more generous.
However, whether to use its own brand or buy brand? Chen Liang believes that this depends on industry characteristics and industry gross margin levels.
Chen Liang told reporters that in general, as mature industries such as color TVs and PCs, gross profit has been very low, product homogeneity is obvious, and the cycle of building brand from scratch is very long. For enterprises, the opportunity cost is very high. . Chen Liang's suggestion is that it is best to directly acquire famous local brands, but this requires the company itself to have a high level of management, otherwise it will be difficult to succeed.
As for industries with higher gross profit levels, Chen Liang believes that private-brand strategies are more suitable because even if they fight price wars, companies still have the ability to invest in brand promotion.
"In the future, Chinese companies will not adopt low-price tactics and rely on quality to enter the high-end market. That is the real 'Chinese creation.'" Chen Liang said.
In this regard, Lu Qiang reminded that using its own brand, companies must also have their own unique capabilities. For example, Huawei owns all the intellectual property rights of its products, so its measurable product features are no less inferior to its main competitors, and prices are much lower, so we can use our own brands to open a way out.
In Lu Qiang's opinion, companies that are truly promising in the international market should be like this: Rely on R&D to make products gain advantages, and then drive brands through products. When customers accept products, they naturally accept the brand.
"Looking at this path, although initially slow, requires companies to continue investing in research and development, and long-term efforts in marketing, but this is the most promising." Lu Qiang said.
"We want to sell to the international fashion industry." Recently, Jiuxing Holdings Co., Ltd. executive director, chief operating officer Qi Leren said externally. The foundry manufacturer listed in Hong Kong has been focusing on OEM for 29 years after its founding. But five years ago, Jiuxing began to seek to promote its own brand of shoes to the international market. In 2012, the company plans to take a bolder move by opening its Stella Luna store in Paris and London.
In fact, the road to a "Made in China" brand is not smooth.
“The main obstacle is the brand.†When talking about the difficulties faced by “Made in China†toward the international market, senior brand expert and general manager of the former Tairan General Consulting Company, Lu Qiang said that mature markets such as Europe and the United States have been divided by several well-known brands. Consumers rarely buy unheard of branded products, "especially when these products also come from countries or regions that lack a 'country' brand."
If, as international marketing guru Philips Kotler once predicted, “the next 20 years will be a high-speed growth phase for Chinese brandsâ€, then at the moment, the foundry may be a new force for Chinese brand manufacturing.
Such a story has been circulating in the transformation trend of foundry companies: Two years ago, Guo Guohui, the special assistant to the president of Foxconn, the “king of foundry workersâ€, and chairman of the channel business group, had painted a “U-shaped curve†for the company. To many people's surprise, the bottom of the U-shaped line representing the thinnest profits of the company is Foxconn's most powerful foundry manufacturing business.
In fact, even if it is the "king of the foundry," Foxconn, like all companies that are stranded with low profits, is eager to try out brands and channels with higher profits at both ends. However, over the past two years, Foxconn's progress in channels and brands has not been smooth, including the flying tiger Tesco and the Wanma Pentium. Not only that, but the scale of "king of the foundry" is worse for Foxconn, and it is the so-called shipbuilding disaster.
The attempt to transform the foundry giants is not Foxconn. Pou Sheng International (Holdings) Co., Ltd. is a relatively successful example. Although the name sounds unfamiliar, as the controlling subsidiary of Yue Yuen Industrial (Group) Co., Ltd., the world's largest manufacturer of branded sports shoes and apparel, it has contracted most orders for sports brands including Nike and Adidas. Right now, through direct sales, mergers and acquisitions, etc., 2011 Pou Sheng International's direct sales and franchise stores reached 2,765 and 3,282 respectively, and there are already 24 production lines.
The outside world attributed the successful experience of Pou Sheng International: "Trust oneself and at the same time let go of acquisitions of shaped regional chains, and through the integration of the latter's channel resources, copy the successful model of the expansion of the United States in the field of sporting goods."
In the earlier stages of the transition of Chinese OEM companies, the name ANTA should not be overlooked. Before the Asian financial crisis, Anta and many shoe companies in Jinjiang produced sports shoes for multinational companies. It was an ordinary OEM factory.
According to Chen Liang, a senior brand expert, when Anta CEO Ding Zhizhong started implementing the brand strategy in 1997, the market was almost monopolized by several European and American strong brands. Ding Zhizhong opened up a new path, using marketing as a breakthrough point, first signing an agreement with the Chinese national table tennis team, employing world champion Kong Linghui as the brand image spokesperson, starting from domestic small and medium cities, and establishing his own brand and sales network. Since 1999, TV advertisements featuring Kong Linghui as the spokesperson have appeared on CCTV. Two months after the advertisement was broadcast, the nation’s orderers began to flock to the Anta factory. At the Sydney Olympics in 2000, Kong Linghui won the men's singles champion table tennis, and Anta also won a battle.
Chen Liang believes that the long-term foundry for Anta accumulated product quality, process and production equipment to enhance the foundation, access to the original accumulation of production management experience, the key to occupying the market is to create a self-owned brand, and marketing success.
"Create brand time" or only input without output Although the size of the foundry has a sense of transformation or action, but not every company's pay will be rewarded.
“The transformation of OEM companies is actually not easy, especially the road to creating their own brands is even more uneven.†Zhuang Hua (a pseudonym), general manager of Kewo Electronic Technology (Wuxi) Co., Ltd. told reporters that in general, the process of creating a brand The transition period in which a company can afford not to make money is probably two years. It may take five years from the time it takes to form a brand team to start making profits. “Continuous investment, invisible output, most transition companies are hard to survive.†."
Zhuang Hua is the parent company of Kewo Electronics, a foreign trade company mainly engaged in electrical appliance manufacturing in Suzhou. In 2005, the annual sales of vacuum cleaners for the company's OEM production reached 800 million yuan, but since 2002, the development of the company seems to have touched the ceiling. According to Zhuang Hua, competitors have mushroomed, and countless SMEs are rushing to grab orders and fight the market. “And the loss of talents to the small businesses is all processing companies. Naturally, the wages are high. Who."
In fact, talent competition, decline in bargaining power, rising costs, and loss of orders are the reasons that prompted domestic OEMs to start thinking about transformation.
"The road to OEM has been a dead end. At most it is to grab someone else's 'cake' to grab their own plate. Enterprises cannot see a sustainable future." Zhuang Hua said frankly.
There are not a few entrepreneurs and industry observers who hold the above ideas. Not only the small and medium-sized foundries where Zhuang Hua is located may encounter difficulties. Even listed companies like Jiuxing Holdings will face many challenge.
“When OEMs try to build their own brands, they will often continue to rely on traditional customers, and these customers may not be happy to see the industry and business go hand in hand with each other.†Christina, Consumer Industry Specialist, Hong Kong University of Science and Technology? Herson thinks.
Based on the above reasons, Christian said that OEMs may find it difficult to change their business model. At present, it seems that there are very few Chinese consumer brands that go overseas, and they are rare in the high-end market.
Fortunately, in recent years, China has begun to emerge with organizations and standards such as the GMC High-Quality Manufacturers Alliance, which indicates that another group-based brand idea of ​​“Made in China†to expand overseas markets is sprouting.
"'Made in China' does not lack quality products," said Pan Jianyue, general manager of Global Markets Group. "However, in the current international market, 'Made in China' is difficult, if a group of good manufacturers can Together, the establishment of industry screening standards and thresholds, together with high requirements and high standards to create a community brand, may be a more practical and feasible way."
In this regard, Lu Qiang expressed his approval and explained that companies in certain countries or regions have worked hard for a long time and formed a very high reputation in certain aspects. For example, “Made in Germany†and “German Technology†mean reliable performance. , Italian leather shoes, Swiss watches also have a strong appeal in the international market.
In Lu Qiang’s opinion, Chinese companies have not yet established a national brand, “If you reluctantly say yes, the low cost is the meaning of “Made in China.†To form a national brand with appeal, you must pass a number of companies in the international market. Success can be achieved."
"At present, even within the next 10 years, Chinese enterprises cannot rely on national brands for internationalization, and they can only rely on their own strength to build brands, so the difficulty will be greater." Lu Qiang said frankly.
The brand warfare product is still king Although the Chinese-made brand has little advantage, it does not mean that the foundry of the transformation has no way to go.
Lu Qiang believes that China's own brands will enter the international market. If it is Southeast Asia, the Middle East, Africa and other places, they may use their own brands like TCL and Lenovo, because "Made in China" in these areas is still very influential.
As for the entry into Europe and the United States and other developed countries, it is divided into two brand strategies. The first is to use its own brand, and then use low prices as a competitive means. For example, Huawei's slogan in the United States is 'all the same except price'. The premise of this is that these industries have a high gross margin, otherwise the low-price tactics cannot be used. The second approach is to acquire local brands. For example, TCL has acquired Schneider and Thomson in order to enter Europe. Lenovo's acquisition of IBM is even more generous.
However, whether to use its own brand or buy brand? Chen Liang believes that this depends on industry characteristics and industry gross margin levels.
Chen Liang told reporters that in general, as mature industries such as color TVs and PCs, gross profit has been very low, product homogeneity is obvious, and the cycle of building brand from scratch is very long. For enterprises, the opportunity cost is very high. . Chen Liang's suggestion is that it is best to directly acquire famous local brands, but this requires the company itself to have a high level of management, otherwise it will be difficult to succeed.
As for industries with higher gross profit levels, Chen Liang believes that private-brand strategies are more suitable because even if they fight price wars, companies still have the ability to invest in brand promotion.
"In the future, Chinese companies will not adopt low-price tactics and rely on quality to enter the high-end market. That is the real 'Chinese creation.'" Chen Liang said.
In this regard, Lu Qiang reminded that using its own brand, companies must also have their own unique capabilities. For example, Huawei owns all the intellectual property rights of its products, so its measurable product features are no less inferior to its main competitors, and prices are much lower, so we can use our own brands to open a way out.
In Lu Qiang's opinion, companies that are truly promising in the international market should be like this: Rely on R&D to make products gain advantages, and then drive brands through products. When customers accept products, they naturally accept the brand.
"Looking at this path, although initially slow, requires companies to continue investing in research and development, and long-term efforts in marketing, but this is the most promising." Lu Qiang said.
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