The title of this first post of September IS NOT "Chinese love brands". I suggest we look beyond a banal observation about the growth potential for brands in the Chinese market, and offer a more detailed analysis of what the rules of the game seem to be in China right now with regard to brands. To do so, I shall strive to put into perspective a number of reports that we have been receiving over the past several months - in the form of a series of posts.
- Traditional Chinese beauty brands (Beijing Today, July 2) - some of which were in vogue in the '80s - are back (they are available online at tangjinu.taobao.com). All of them have in common the use of ingredients and fragrances to which the Chinese have been accustomed for a long time, such as osmanthus, sandalwood, violet, rose ... Describing themselves as "natural", they sometimes make a reference to traditional medicinal practices. Their prices are very low - allowing many Chinese women to use beauty products that are accessible.
- Shanghai Jahwa has re-launched a high-end beauty brand (Jing Daily, August 24) that was very popular in the Shanghai of the 30s, Shuang Mei - under the name Shanghai Vive. With very Art Deco packaging, the brand store is located in the famous Peace Hotel, which just reopened its doors. Besides beauty products, one also finds here jewellery and accessories - creating a true "lifestyle" brand evocative of Shanghai – at the time it was called "the Paris of Asia". This brand completes Shanghai Jahwa’s portfolio together with Herborist (which I mentioned last year, and which saw its sales rise by 60% in 2009), and a mass-market brand, Liushen, (representing a half of its sales).
- First Auto Works, a long time provider of official cars in China, today announced a re-launch of the famous Red Flag limousines - as a prestige brand in their range. In the 50s, the Red Flag cars were copies of official Russian limousines. An American entrepreneur - creator of a hotel and restaurant, Red Capital - uses one of the last original cars for "nostalgic" tours in Beijing… for foreigners.
Contrary to what some may claim, this is not purely nostalgia. I see three salient points common to these examples:
- The desire to develop Chinese brands - and therefore draw on the history of China, so as to establish them over the long term. This is a new approach for the Chinese for whom access to the past has been denied for many years.
- The ability to stake on real brand portfolios - from mass market to high-end or even luxury.
- Chinese nationalism finds here a field of application - to be monitored closely: China believes that ancient brands are part of its heritage - and is providing the means for defending and reviving the most important among them.