Chinese brands learn how to play market

Challenges remain

Despite Chinese companies' recognition of the importance of branding, many are still on a "trial and error" journey to understand how to effectively build a positive brand, and some have learned their lessons the hard way.

One example is the private company Sanpower Group in Nanjing, Jiangsu province, which acquired a majority stake in the iconic UK department store House of Fraser in 2014.

Sanpower chairman Yuan Yafei was perhaps too quick to announce his ambitious plans to launch 50 new House of Fraser stores in China, because when this target was not met, his words were cited in various UK media outlets as the basis for skepticism in the brand, especially when Sanpower last year announced the closure of 31 House of Fraser stores in the UK, affecting 6,000 jobs.

Another example of an ineffective branding campaign came when Chinese smartphone maker Xiaomi made an embarrassing mistake in launching a "flash sale" promotional activity when it entered the UK market last year.

Xiaomi did not clarify its promotional activity from the outset. As a result, the campaign was viewed by UK consumers as misleading, and left thousands of potential buyers disappointed. The incident attracted dozens of user complaints on Facebook and Twitter, leading to negative media coverage before the company had even established its presence in the UK.

Olive Hou, founder of London marketing agency Olive's Choice Creative, said this incident highlights the importance of understanding cultural sensitivities when Chinese companies expand abroad.

"In this case, Xiaomi should have explained the rules of its flash sale from the beginning, to provide transparency and clarity. This is particularly important for the UK market, where consumers care very much about rules, procedures and fairness," Hou said.

Hebbert, from Hylink UK, agreed, adding: "Marketing tactics used to make certain products appear more scarce are used by established brands all the time, such as Apple. But because Xiaomi is a newcomer to the UK market, it should focus on a solid foundation first.