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Chinese products lack lustre (1)

2005-01-14 09:53:31

 

  
   Chinese brands are losing ground to their foreign rivals in the domestic consumer market, according to a report released last week by Sinomonitor International, a Sino-Japanese independent market monitoring company established in 1997.

   The report ranked the top three competitive brands in 27 consumer product sectors for the year 2004.

   The sectors include information technology, daily necessities, food and beverages, financial services, and textiles and garments. Products range from microwave ovens to instant noodles, from cosmetics to sportswear and from personal computers to bank cards.

   Lenovo computers, Sony digital cameras, Nokia mobile phones, Gree air-conditioners, Olay shower gel, Rejoice shampoo, Huiyuan juice, Peony bank cards, KFC fast food restaurants and Nike sports shoes are ranked as the most competitive brands in their categories.

   The report is based on information gathered by the China Marketing and Media Study, which has been following over 70,000 Chinese consumers, between the ages of 15 and 64, in 30 major cities over the past eight years.

   The study covers more than 1,000 brands in the Chinese market, and is the biggest market survey so far in terms of scale, coverage and time span in the domestic market.

   The competitiveness index of the surveyed brands is calculated based on the share of their consumers, the ratio of loyal consumers among all purchasers, and market share growth indices, according to Ma Hongzhong, research manager for the study.

   "Comparing the ranking lists for 2004 and 2003, we can see great changes in China‘s consumer markets," said Liu Rong, vice general-manager of Sinomonitor.

   "International big brands are hastening their development in the domestic market and regaining lost ground," she said.

   In Sinomonitor‘s first such ranking produced a year ago, Chinese brands stole more limelight. Among the 27 product sectors ranked, 16 local brands were found to be the most competitive brands for 2003.

   However, in 2004, several domestic brands, especially in the daily necessity categories, such as Liushen shower gel and Dabao skin care, lost out to foreign rivals.

   Olay, with an expanded product line, ranked top in both sectors.

   "I felt a chill when I saw the survey results for last year," said Wang Weiqun, editor-in-chief of Successful Marketing magazine, co-producer of the report.

   "Domestic brands are losing their advantages, and will face great challenges in the future," Wang said.

   Liu from Sinomonitor said the survey has uncovered two main features of China‘s consumer market.

   First, foreign brands enjoy much greater brand loyalty than domestic brands.

   In the laptop computer sector, domestic brand Lenovo ranked the most competitive. But only 79.1 per cent of its consumers are loyal to the brand, compared with 91.4 per cent loyalty to Sony, 90 per cent to Dell, 89.4 per cent to IBM. Lenovo recently purchased IBM‘s computer division, which should increase its competitiveness, however.

   In the sports shoes sector, Anta ranked top in terms of market share, while its brand loyalty is just 59 per cent.

   Its foreign rivals, Adidas and Nike, enjoy as high as 72.7 per cent and 71 per cent brand loyalty.

   "This is one of the reasons that more foreign brands won over their local counterparts in 2004," she said.

   The other feature is the structural changes in the country‘s consumer market.

   In today‘s China, consumers like to pay more money for high quality products, Liu said.

   And the country‘s luxury goods market is growing day by day.

   Take the skin care sector as an example. Internationally famous brands, Lancome and Revlon, enjoyed high growth rates of more than 90 per cent last year.


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