Arun Sudhaman 20 Oct 2012 // 11:00PM GMT
What will it take for China’s brands to achieve international recognition and success?
That is a question that, in one form or another, has been asked for more than a decade now. The company’s homegrown heavyeights, flush with cash, increasingly spy credible expansion opportunities abroad.
Some, such as Lenovo and Huawei, have made significant international progress; others like Li Ning, Haier and CNOOC continue to look for opportunities, whether via acquisition or organic expansion.
All of these companies’ experiences point to one thing: the critical importance of public relations, particularly in countries that continue to perceive ‘Brand China’ in a negative light. For a company like Huawei, for example, that issue has been brought home in a particularly striking manner.
To explore how China Inc can successfully address its global perception problems, the Holmes Report recently partnered with Fleishman-Hillard for a roundtable in Beijing. What follows are excerpts from an expansive discussion of the issues at stake, in the heart of the world’s fastest-growing major public relations market.
The roundtable featured the following participants
Li Hong, president, Fleishman-Hillard China
Arun Sudhaman, managing editor, Holmes Report
Dali Zhao, vice-chairman, CIPRA
Xiaoying Hu, editor-in-chief, industrial economics, Security Daily China
Sabrina Lee, GM, R3 Beijing
Jeff Kwek, head of communication, Tencent
Frank Zhao, VP, Fleishman-Hillard China
Winter Wright, VP, Fleishman-Hillard China
Guilty by association?
For China’s companies, much depends on their association with the country’s national brand itself. “The Chinese government has been doing a lot to improve our national image,” noted Dali Zhao, pointing to the advertising campaign in New York’s Times Square. However, added Zhao, pretending that everything is sunny will not play among today’s informed audiences.
“We need to build an accurate and realistic picture of our national image,” said Zhao. “It will have a bearing on how well our products are received.”
Zhao used Brazil as an example, where acquisitions by Chinese mining companies have helped improve the country’s reputation. For Tencent’s Kwek, the issue is a complex one.
Kwek: “First and foremost, Tencent is a commercial enterprise. We rise and fall with the China brand. We do our best to pre-empt certain incidents. You just have to role play. We do what any commercial enterprise can do. Any Chinese brand will have its branding attached to the country. But things are looking bright. People will be less resistant once China rises in prominence. The speed will depend on China’s national brand.”
Hu: “I have the impression that when Chinese companies go abroad they are not so clear about the targets. As for state-owned enterprises, when they go abroad, the first thing people think of is the national brand. The enterprise, whether large or small, will feel secretly they cannot overcome political risks which are unexpected. How do you build a national brand in the international market and manage political risk?”
Performance and trust
Slowly but surely Chinese companies have begun calling on agency partners to help them tackle these problems. That, in itself, is an situation that requires managing - particularly as many Chinese companies have felt more comfortable working with domestic PR firms.
Unsurprisingly, Fleishman’s Li Hong believes that a global agency network can help Chinese brands better handle the specific communications issues that arise in different markets, while also being able to understand the unique mentality and culture of the companies in question. It was a topic that sparked a robust exchange of views among the panellists.
Lee: "Firstly, how should you measure the results. And, secondly, when a local brand chooses to partner, it’s important to trust the people rather than rely on the stature of the brand."
Li: "When you talk about trust, it’s more of a cultural thing. Chinese clients may not have a clear definition as to how I can help. They are tougher, they want to see quick results. What is changing is the way clients manage our performance. Clients are more and more keen on getting tangible returns."
Dali Zhao: "The concept of PR entered into China with the entry of multinational companies. With further economic globalisation, more companies understand the critical role of PR in building the company - many of the began to employ PR agencies. But, I have seen an interesting trend: MNCs would prefer to use MNC firms, whereas local companies prefer local agencies. Maybe there is a cultural gap. I do think there is a trust issue between companies and their PR partners. Chinese companies would prefer to use PR companies with a similar culture and corporate structure. We some quantified uniform metrics, but I don’t think there is a uniform standard. Some companies are using total number of stories - there is some understanding required of PR performance. It will take some time."
One of the key stumbling blocks for Chinese companies has been insufficient outreach in foreign markets, where the more conservative PR mindset can make them look like they have something to hide. The panellists explored this topic in some detail, discussing what is required or foreign branding efforts, and of their agency partners.
Kwek: "Think global, act local - that encapsulates what we are doing overseas. How do we distil local insights? That is through our staff. We have offices in San Francisco, Boston, Thailand, Vietnam. Recently during the Olympics in London we ran the Chinese Teahouse - you need a lot of local support. We worked with PR companies and marketing agencies. It was through them that we linked up with the BBC. We needed that local insight, but it will be a hybrid. In every main office there is always a lot of senior local people there."
Wright: "You almost feel like the two sides are talking past each other a little bit. Often when Chinese companies retain foreign PR advisors, they don’t want to violate any laws. Beyond that, they don’t want to take your advice."
Huawei’s experiences in the US, and the comments of their own former communications head, suggest that at least some of the blame for China Inc’s PR woes comes down to good old-fashioned distrust of something foreign. If Sinophobia is real, how should the country’s brand handle it? For Dali Zhao, at least, it must begin with transparency and authenticity.
Dali Zhao: "They are not fearing Chinese companies, they are fearful of China’s national policy. We want the world to understand China, but we want them to understand China in an accurate and fair-minded manner. You simply cannot show the best side of Chinese and hide the darker aspects. PR companies need to introduce their professional expertise to address the Sinophobia issue."