Chinese brands grope for ways around cultural obstacles

BEIJING - From electronics producers to railway contractors, Chinese businesses all face the same problems promoting their brands overseas.

One of China's most influential commercial symbols, Lenovo, has overtaken HP as the world's leading PC manufacturer, partly through acquisition of foreign peers, but its executives remain on the alert.

"For a domestic firm eager to expand, the biggest challenge comes from cultural differences which cannot be solved by buying companies. It is crucial to integrate into the community, speak the same language and share the same values," said Wang Chuandong, Lenovo China's vice president and chief marketing officer.

New York consultancy Interbrand ranked Lenovo as the world's 99th most valuable brand at $4 billion. HP, however, is ranked 48th with a value more than double that of Lenovo. The other Chinese company on the top 100 list is Huawei, a rising tech star.

Of the top 100, 52 originate in the United States, 10 come from Germany, 8 from France and 6 from Japan. Considering that China is the world's second largest economy, homegrown businesses are lagging far behind.

In a nutshell, Chinese companies are faring poorly in promoting their products overseas and "Made in China" is still widely perceived as substandard.

"We have a staff of 65,000 worldwide, with nearly 30,000 non-Chinese. American Yolanda Lee Conyers is our chief diversity officer. Our CEO Yang Yuanqing worked and lived in the United States for many years. This improves global cohesion inside the group," Wang said.

Lenovo's smartphone Moto Z, with its souped-up, snap-on music accessory, enjoyed stellar sales in Mexico where music is a significant part of the local culture. In the first three quarters, 1 million Moto Z were sold around the world.

Chinese companies must take local customs and local benefits into account when trying to win local hearts, Paul Haenle, director of Beijing's Carnegie-Tsinghua Center for Global Policy, said.

Rolling stock manufacturer CRRC set a good example in creating a bond with local people when overhauling an old industry base and building new factories in Springfield, Massachusetts.

"There was an old building to be torn down, but we found out that it had a history of more than 100 years and had stood witness to the industrialization of the region and people had an emotional bond with it," said Li Min, a marketing executive of CRRC.

The company preserved the structure, renovating it and turning it into an office building, receiving much praise from local people.

The move smoothed a somewhat frosty reception which CRRC had encountered in the United States and, in March, the company was awarded a billion-dollar order to supply 850 railcars to Chicago, its largest deal ever in a developed country.

"Chinese companies should respect local customs and learn the history of their new homes," said Mao Yixiang of the State-owned Assets Supervision and Administration Commission.