CHINA TO BE THE WORLD’S LARGEST BRAND OWNER?

What has an iconic salad and the founder of modern China got in common?  A good deal more than you would think as it’s just been announced that Hilton has sold the Waldorf Astoria to a Chinese insurance company for around $2b. The highly successful business leader behind Anbang Insurance is married to the granddaughter of the late Deng Xiaoping.
 
At one level, this is just an acquisition. The hotel is a high value piece of real estate in one of the world’s premier cities. Last time I went to New York, I couldn’t help having a wander round this icon of grandeur and it was as grand as ever. However, it seemed a little tired compared to some of the more modern luxury hotels in the city. It was certainly a shadow of its former self by comparison to the likes of the recently refurbished Savoy in London but I still couldn’t afford to stay there!
 
However, its an authentic brand with a genuine pedigree that just needs a bit (ok a lot) of money and a succesful re-launch to re-take its place as one of the world’s most desirable hotels.
 
What makes this acquisition so interesting is that a Chinese insurance company has bought it from an American group. For more about the way strong performing long term assets are essential to back up the Chinese insurance industry, see my previous post on Alice Fan Yang. A quick internet search reveals that Chinese firms now own some of the most iconic brands in the world covering most market sectors including automotive, technology and FMCG. The sellers have mainly been American and European companies.
 
The new owners are largely majority shareholders and not owner managers. By and large they have let the management teams run their businesses. This hands off approach seems to work and its a refreshing change from the approach of American organisations who in days gone by used to acquire successful international operations and force them to embrace new brands, new ways of working and new people – often turning good businesses into bad ones. Thankfully, those days are now, largely, gone.
 
Chinese businesses and consumers are committed brand enthusiasts. They recognise the inherent value and appeal of them both domestically and now, internationally.
 
Apart from perhaps automotive and high fashion, America has largely led the world in building the biggest and most iconic global brands. Are we now seeing another example of China eating the Americans’ lunch?