Jonathan Rudd, a UK marketing professional now living and working in Singapore on the Asian business of a major global multi-national, gives another view on the nature of marketing and branding in Asia.
In a previous guest post he wrote about the Beer market and the role of aspiration, in this post: "Weetabix and why UK manufacturing jobs won’t be
heading east, and why Jaguar cars might want to think twice about making cars in
China".
Bright Foods, the Chinese state controlled food
company, has bought a 60% stake in the UK consumers beloved Weetabix breakfast cereal. The new owners have
been quoted saying production will be kept in the UK in Northamptonshire, and I would
expect the 70 million Weetabix produced annually in Burton Latimer will only go
up as a result of this takeover.
This isn’t because there isn’t any wheat in China, or
they can’t replicate the manufacturing process and make Weetabix (and Alpen and
Ready Brek) much cheaper in China. I bet they can.
And that in itself is the
problem with manufacturing things in China for China; replication, or copying.
‘Fakes.’
As I’m sure you’re aware, you can buy a copy of pretty
much any desirable western luxury brand’s watch, handbag or accessory on the streets
of Shanghai. You can get a fake of almost anything branded and worth having
from the West and Japan. Phones, jeans, perfume, but more disturbingly food,
drink and even baby powder...
Affluent Chinese don’t want anything made in China; they
don’t trust it. You may have read that an Apple store in China got closed down;
because it wasn’t an Apple store. Even the staff thought they were working for
Apple! I found myself in a bar in the French Concession in Shanghai and there
was the option of a $10 USD all you can drink menu. I thought ‘well it’s been a
hard day, why not!’ Inside, only the expats drinking from the all you can drink
list; the locals kept with the branded stuff.
Whilst status certainly plays a big part in luxury goods,
alcohol etc, the moment these brands start producing in China, the Chinese
raise an eyebrow. Can they be sure it’s not counterfeit?
It dilutes the
prestige, it’s too established too mainstream, but more important for Weetabix
as an ingestible it’s also too risky. It may not be a status purchase, but in a
country where questions are raised over farming methods, where food comes from,
whether it is in fact what is says on the tin, it’s a big concern.
I buy Weetabix in Singapore from time to time. ‘Made in
UK’ is blazed over the pack, just like how the origin is dialled up on Italian
tomato’s, French cheese, Japanese strawberries etc. To start making this in
China will alienate the emerging middle class and relegate the humble Weetabix
biscuit to another foodstuff of questionable substance and lacking that desired
authenticity.
I was surprised to hear about Jaguar’s announced joint
venture with Chery, a state owned Chinese car maker.
On the surface, you can
see why it makes sense. If you are a
foreign company and want to import something into China, it can be very trying. Lead times
for registration are typically over 2 years. The amount of bureaucracy is
crippling and without people ‘on the inside’ you may not stand much chance.
However, Jaguar is a luxury car maker and the luxury car
market in China is booming! However, whilst there aren’t the same concerns
about legitimacy and safety for food, drink, cosmetics and toiletries, it’s the
authenticity piece Jaguar need to be concerned about.
A Jaguar car is a luxury big ticket item. ‘Made in
Britain’ is a key USP of the product and brings with it the heritage,
authenticity and status of having a Jaguar. To be made domestically by a state
controlled company (the government isn’t exactly trusted in China) would really
put a dent in the sumptuous new XF’s bonnet.
Photo credit: http://www.flickr.com/photos/telipogon
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