German consumers are still relatively unfamiliar with Chinese brands. Only 17% of respondents were able to spontaneously recall at least one Chinese brand. Regarding aided recognition, China’s most well-known brands in Germany are Volvo (96%), Lenovo (62%), Huawei (44%) and Air China (31%). I
In addition, there still is a very large share of German consumers who mistrust Chinese brands and see China as a competitor for Germany. All in all, results show that companies from BRIC countries – and Chinese brands in particular – have much work to do in building up the images of their brands in the EU and Germany in particular.
These are some of the key findings of a representative study conducted by globeone, an international marketing and strategy consultancy based in Cologne, Germany. For the survey, an independent market research institute surveyed 1,000 German consumers.
Most (69%) of those surveyed indicated that they do not have a preference for brands from the emerging markets. Chinese brands are even viewed negatively by a considerable amount of respondents: 32% those surveyed said they do not like brands from China in general. Thus, overcoming the current negative image and distrust will be one of the main challenges for Chinese companies aiming to develop the European markets.
German consumers are also skeptical of product attributes: they see similar deficiencies for all BRIC countries in traditional values, such as reliability and trustworthiness. Perhaps the most significant issue for Chinese brands is consumers’ perception of quality. Only 12% of respondents associate Chinese products with ‘excellent quality’, which is the lowest result of all countries surveyed.
However, Chinese brands were also able to achieve favorable results in several categories. They lead in value for money and rank 2nd best for innovation and design, closely trailing South Korea.
Brands from South Korea are also the clear leaders in the ranking of the most well-known "emerging
brands". In aided recognition, Samsung (98%) and three other South Korean brands (Kia, Hyundai, and LG)achieve over 90%, whereas China’s only representative in the top 10 is Volvo (96%).
Interestingly, South Korean brands generally forego a direct reference to their country of origin, and instead choose to communicate as global brands. This strategy also points out opportunities for Chinese companies. Brands like Lenovo or Huawei already use similar approaches internationally and present themselves as local or global brands in target markets in order to overcome the country-of-origin challenge.
Among all surveyed countries, China has the strongest image of being a direct competitor to the German economy (68%). Accordingly, German consumers are expecting strong brands from China to emerge in the automotive, household and electronic devices, and IT sectors – which also belong to Germany’s key industries. The survey’s results show the respect German consumers have towards China’s development, but they also underline China’s current image as an economical opponent.
This, again, sets a challenge for Chinese brands seeking to go abroad and develop the German market and other European markets.
“To be successful in Europe, BRIC brands will need to improve their products significantly in terms of
perceived product quality and sustainability. Also, many of the new champions still lack the right approach for penetrating the complex European market with a clear brand positioning that is relevant. In addition, the Chinese government could also start to support the creation of a more positive percetion through a smart national image campaign,” says Niklas Schaffmeister, Managing Partner at globeone in Cologne.
Despite increased investment and acquisition in key Euro countries, BRIC companies still face significant barriers to building their brands. “Besides a keen understanding of markets, building a brand also requires considerable time and investment,” says Schaffmeister. “Many BRIC champions balk at that. But SouthKorea shows us how market shares can be captured in developed markets as well.”
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