Bufuddled consumers

Meanwhile, Li-Ning chose internationally famous foreign athletes to be its brand spokespersons.

Mike Bastin, an academic who teaches and researches branding and marketing at Tsinghua University in Beijing, says that Li-Ning's new logo fails to express the true spirit of the company. "Consumers may not understand what kind of changes the company can make through its new logo. Maybe it is because of the difference in language between Chinese and English," he says.

Meanwhile, for many overseas observers the company is still an unknown quantity, "I didn't know that Li-Ning was a sports-clothing brand until I saw my Chinese classmate wearing one of their T-shirts. I am not sure whether the brand suits me, because I know nothing about the culture or spirit behind it," says Benit, a student from the UK.

"In my opinion, Li-Ning's new brand promotion didn't achieve the desired effect after one year," says Ding Jiayong, a professor of advertising and consumer behavior at Nanjing Normal University.

According to Tsinghua University's Bastin, Chinese companies need to reconsider their methods of gaining recognition from foreign consumers through their brand name, logos and billboards. "For example, Meters/bonwe, is a brand of sports clothing, but the name appears too long to remember. Moreover, it has no meaning in English or any other language, which is confusing for foreign consumers," he says.

Ding says that brand internationalization is the only way for a company to accelerate its overseas development. The lesson to be learned from some of the more successful campaigns is that communicating the brand's spirit in line with a global zeitgeist - such as happiness, bravery and energy - to the target consumers is the most important thing, he says.

For example, Nike Inc's "Just do it" logo exemplifies a mixture of confidence and power that satisfies the psychological needs of young people. "Li-Ning doesn't have clear brand-positioning, and they are losing consumers under the age of 25," says Ding.

Building the brand

In order to become global titans with a shining brand, Chinese companies have a long way to go, even the larger ones which have sufficient campaign funds, according to analysts.

The low-cost manufacturing experience, allied to a focus on increasing sales volumes, has resulted in Chinese entrepreneurs neglecting effective brand-building. That is likely to become a huge hurdle to business development across different cultures.

The problems that Chinese companies face today are similar to those experienced by Japan and South Korea in the period after World War II, wrote Kevin Taylor, Asia-Pacific president for British Telecom Group, in a recent article published in the Wall Street Journal.

Japan and South Korea both gained a global reputation for "low-cost manufacturing" with concomitant low quality in the 1950s and 1960s. After a change in business strategy and an aggressive brand-building campaign, some companies from those countries changed consumers' perception of their products and allowed them to become well-known globally, according to Taylor.

Li Xiang, executive director of the Hong Kong-based Spring Capital Co, an independent private equity firm, says that the key of the "going abroad strategy" for Chinese brands is to "give a good impression" to foreign consumers by providing high-quality products and services.

"Chinese companies have the ability to expand overseas, because they have enough money, a large labor force and a variety of products," says Li. "The weakness was that we didn't effectively communicate our brand image in other countries."

In response to the interview with Van Duijl, many foreign consumers wrote on the Daily Telegraph's online message board that they only use computers from Lenovo's ThinkPad range (which was acquired when the Chinese company bought IBM Corp in 2005) at work, and that the computers were purchased by their companies. It seems that Lenovo needs to work hard and improve awareness among consumers outside their home market.

Wang Yuquan, China president of the business research & consulting company, Frost & Sullivan Inc, says that Lenovo should accelerate its technological development to ensure that its products are top of the range in order to ensure a breakthrough and become a top global brand.

"To sell low-end and low-cost computers in developing countries may be an effective method of enlarging Lenovo's market share in the short term. But it is dangerous in the long run if it doesn't improve brand awareness in developed countries," according to Wang.

Li-Ning launched its online store on eBay.cn in July 2010 in order to broaden its sales channels overseas. In the aftermath of the 2008 financial crisis, e-business helped Li-Ning reduce its marketing costs and improve its brand awareness internationally.

The company's former Chief Financial Officer Chen Weicheng says that future international competition may not depend on the increase in product sales, but depends on quality and brand influence.

Haier Group, a Chinese "white goods" manufacturer whose products include refrigerators, washing machines and air conditioners, won the largest market share for major appliances in the fourth quarter of 2009 after a promotional campaign as a sponsor of the US National Basketball Association. Haier was also one of the main sponsors of the Beijing Olympic Games in 2008, which broadcast the company's name to audiences on every continent.

The company is now focusing on building its brand around an image of tech-savvy awareness.

"Haier aims to create a world-famous brand in the age of the Internet, which features 'satisfying the personalized needs of users in a short time'," according to its website.

According to British Telecom's Kevin Taylor, a global branding campaign will also require Chinese entrepreneurs to improve after-sale services to handle customer queries, complaints and feedback in many languages, which is "a demanding and complex task".

"Chinese companies will ultimately overcome these challenges, and the world's consumers will be richer for the choice Chinese brands will offer," says Taylor.