Chinese brands fall short

14 February 2011

BEIJING: Brand owners based in China are still struggling to overcome negative perceptions from shoppers in countries such as the US and UK, a study has found.

Edelman surveyed 5,075 adults in 23 markets, exclusively targeting people with a college education, in the top income quartile for their national age-group, and who regularly monitored the latest policy issues.

Overall, 35% of respondents trusted companies from Russia, rising to 39% for China, 40% for Brazil, 42% for India and 44% for South Korea.

Scores reached 76% for German firms and 75% for Canada, beating Sweden and Switzerland, both logging 73%, and the UK and Japan, hitting 69% apiece.

American multinationals recorded 64% on the same metric, their French peers registered 63%, and companies domiciled in Italy achieved just 50%.

More positively, measured against similar research from 2010, ratings leapt by three percentage points for India, four points for Brazil, and five points when discussing Chinese and South Korean enterprises.

Looking at Chinese organisations more specifically, the report found participants in Indonesia awarded the highest approval score, on 75%, with the UAE lodging 74%, Mexico 73% and Brazil 53%.

Comparatives among the German sample also improved 33 percentage points on an annual basis, to 45%, figures coming in at 24 points and 30% in Japan, and 20 points and 40% from South Korea.

However, approval levels in the US contracted six points to 15%, matching the tally offered by Poland, and ten points adrift of the UK, Canada and Australia.

"The survey results point to an important opportunity for Chinese companies to build their trust levels worldwide," said Kevin Wang, managing director, Edelman Beijing.

"Corporations in China should start considering strategies to communicate effectively to global stakeholders, close the perception gap and increase brand trust, creating more favourable conditions for them to do business worldwide."

When evaluating indigenous brand owners, 83% of Chinese customers in Tier 1 cities like Beijing and Shanghai expressed a strong degree of confidence.

This fell behind the 95% mark attributed to Swiss firms, with German companies taking 94% and Italian enterprises attaining 92%.

American goods and service providers were subject to a flattering assessment from 87% of the individuals questioned in China.

Elsewhere, Chinese contributors delivered an 88% trust score having been asked to appraise their own government, and 80% proved equally complimentary about the media.

These amounts easily surpassed the global averages of 54% and 51% respectively, while 92% of Chinese interviewees trusted TV news, newspapers, on 91%, and search engines, securing 86%.

Banks also received substantially higher ratings in China, on 90%, compared with 51% worldwide.

Confidence in the food and beverage category was a modest 52% in the world's most populous nation, and consumer packaged goods posted 41%.

Moreover, 89% of those polled in China agreed corporations need to foster shareholder value in ways that align with social interests, indicating the importance of CSR.

"The Chinese government's successful navigation of the Chinese economy through the global financial crisis and their continued efforts to consolidate and grow the economy are seen favourably," said Wang.

"In China, Chinese businesses have been seen as being increasingly competitive in global markets as they seek expansion and experience overseas."

Data sourced from Edelman; additional content by Warc staff