Building brand trust in China

The international press is very excited about a recent study that shows the shift in power from international to domestic brands in China.
 
More consumers are brushing their teeth with Yunnan Baiyao toothpaste, eating Yili ice cream or putting their babies in Hengan nappies.
 
I don’t think I have ever publically talked about nappies or to be honest, shown that much interest in them since my children were in that stage some considerable time ago…but the figures are breath-taking. It is estimated that there will be more than 100 foreign brands that will enter China in 2014 alone for a market worth Rmb57bn by 2017.
 
What is most interesting is to contemplate how the domestic brands will win over this most demanding target audience, the protective mother. Research shows that in China brand names may wield less influence than tangible product benefits, The consumer wants freedom from harmful substances, quality and absorbency. Against that background certainly foreign brands in the powdered milk sector have flourished since the scare some years ago about melamine in the local brand! A sorry state of affairs that regrettably resulted in several infant deaths.
 
I have commented on the issue of domestic vs foreign brands in other sectors and as I tour the country, I see it being played out in the supermarkets, the car showrooms and even clothes shops.
 
What makes this subject interesting is not the product but the building of brand trust. The consumer economy of the west was built by brands who achieved extraordinary growth because consumers believed in them. Those same brands have come here and benefited from the miracle that is the China story.
 
As I talk to people, I sense that once Chinese brands can build that elusive quality of trust, which is about more than just product benefits, the western brands may not have it so easy. Indeed the more recent highly publicised and high profile legal cases against western companies mainly around market and price profiteering have served to put many foreign businesses on notice that the Chinese government too expects local brands to step forward.