What challenges do Chinese brands face in the global market?

R3 also pointed out that Chinese brands are currently facing several major challenges in the process of going international: the improper selection of business models, low brand trust, insufficient brand building, cultural barriers, and incomprehensible consumer behaviour.

Does China produce quality products?

Factories in China sometimes churn out cheap, poor-quality products. But many are indeed capable of manufacturing products that are both high tech and high quality. In fact, many importers continue to find success sourcing products from China, even as manufacturing wages continue to climb there.

Why can China produce cheap products?

One of the reasons companies manufacture their products in China is because of the abundance of lower-wage workers available in the country. China has been accused of artificially depressing the value of its currency in order to keep the price of its goods lower than those produced by U.S. competitors.

Why do companies do business with China?

As the world’s second largest economy and a vital trading partner for many countries, China is an obvious choice for anyone looking to expand their business overseas. One of the BRIC countries, also comprised of Brazil, Russia, and India, China represents a growing economic market, full of potential.

Why is quality control a problem in China?

Chinese supplies want to save money by reducing specifications, and American companies are trying to fight for higher levels of quality at reasonable prices. The customer may always be right, but quality failures often are the result of a relationship imbalance and asymmetrical information.

What are the pros and cons of China as the largest global factory?

Pro: Lower production costs.

Can China build a global brand?

China’s government has previously recognized the importance of building global brands. But many Chinese companies aren’t accustomed to spending the time and money necessary to sell themselves in foreign markets simply because they got their start as manufacturers making parts or equipment for another company’s final product.

Why are Chinese companies expanding their global reach?

Chinese companies are extending their reach around the globe to purchase foreign technology, managerial talent and, increasingly, international brands. Why have Chinese companies not been able to successfully build their own brands overseas instead of operating under the guise of acquired global players?

Do Chinese brands have international ambitions?

But many have international ambitions, and with China’s economy cooling off, there might be more incentive to seek out growth in foreign markets. For now, only 22\% of consumers outside China can actually name a Chinese brand, according to Millward Brown.

Why do Chinese companies buy foreign brands?

Some Chinese companies buy foreign brands in their quest for clout abroad; Lenovo acquired IBM ‘s personal computer division and Motorola Mobility; automaker Geely bought Volvo; and conglomerate Fosun won a bidding war for Club Med. And eventually more of China’s homegrown brands will spread globally, like Japanese and Korean brands before them.