We often bemoan the rise of offshore competition, particularly from China. However, the typical mindset is to think of products that are manufactured in China but produced to the specifications and market needs of U. S. companies.
I never really thought about how few goods sold here are branded as Chinese products until I read the recent Wall Street Journal article, “Chinese Firm Meets Global Branding.” Among the handful of Chinese firms that have penetrated the U. S. market with their own products are computer maker Lenovo Group Ltd. and household-appliance giant Haier Group.
The article then goes on to describe the struggles of Chinese entrepreneur Jack Yang to sell a dashboard mount for GPS units under its Züuma brand in the U.S. Yang’s quest started in 2005 when he developed a GPS mounting device at the request of a Chinese GPS company. He continues to produce the mounting devices for companies that sell them under their own brands. In the meantime, he is working with two American partners who provide branding and distribution services, a strategy many Chinese businessmen reject. The payoff for selling his own brand is a far larger profit than the 40 cents he makes on each unit he produces for others.
"It's not that small- and medium-sized Chinese companies don't want to develop global brands," Yang explained in the WSJ article. "We don't know how. We don't understand the U.S. market, culture or business model."
While the early groundwork to establish the Züuma brand is promising, and some distributors have reacted positively, sales are not as robust as Yang would like. "Things haven't moved very quickly." But, he notes, "It's like digging a well. If you make superior preparations, you will have big returns."
Yang’s experience is a good lesson to anyone trying to build a successful brand. You need to understand your market and commit to an extended effort. And finally, you should seek out partnerships with professionals that have expertise you are lacking.
