In decades to come, 2013 may be remembered as a momentous year for global trade. At last month's G8 conference in Northern Ireland, the US and EU moved a step closer to a historic free trade deal.
There would undoubtedly be benefits to British brands as a result of any agreement. Yet, with a multi-polar world emerging since the recession, and the entry of China as a major economy, does this EU/US trade tie-up risk UK brands becoming ever more reliant on the west at the expense of emerging markets?
While a mild recovery is underway, growth in the BRICs, led by China, is still far outstripping Europe and the US. Major Chinese companies have built considerable scale by focusing on their home market, and other developing economies. China's Huawei, for example, has become the world's second largest telecommunications company even before properly establishing itself in the US and European markets.
In order to compete with the rising Chinese brands, UK firms must be ready to challenge them on their home turf. Companies that have already done this are reaping the rewards. China is now luxury car maker Rolls Royce's second most important market.
At Landor we have been running extensive studies on brand perceptions in all the major markets for almost three decades. What we've discovered about Chinese views on Britain has important implications for UK plc.
In the past 10 years, this country has seen its reputation in China improve markedly. Today, with the swift expansion of the middle classes, the Chinese are increasingly aspirational and a natural desire has emerged to associate with British and European culture. UK luxury brands such as Burberry, Mulberry and Jaguar Land Rover are capitalising on this thirst for British products.
Ten years ago Britain was looked upon as "traditional", "upper class", "arrogant" and associated with "high performance". Today these perceptions remain, but we have become "more dynamic" and "energetic", "more unique" and "intelligent" and "more reliable" and "trustworthy". Our research has revealed a growing affinity for Britain in China.
Most would consider being looked upon as "arrogant" as a negative. In fact, this is something the Chinese value in brands. "Traditional", a virtue Britain is associated with across the world, is also highly regarded. Other valued qualities the Chinese see in British brands include "charming", "sensuous", "fun", "progressive" and "helpful".
However, the most promising qualities that the UK is associated with are "trustworthy" and "reliable". China is a country awash with counterfeit merchandise and consumers place strong emphasis on quality and authenticity. There have been numerous scandals involving local products in recent years, most notably over tainted milk,and western products are often viewed as more reliable by Chinese consumers.
Yet, the Chinese are by no means blindly chasing western brands. They are still in an experimental phase and when there is no perceived differentiation between a homegrown and western/foreign brand, the homegrown will be preferred. However, our research indicates that the 'made in Great Britain' label greatly enhances a brand's value. The London 2012 Games are likely to have played an important part in boosting the country's image abroad. The UK would do well to focus on how this image legacy can be maintained.
Though the historic EU/US trade deal is a major opportunity, UK companies must avoid looking inward and focusing too much on mature markets. The emergence of China and other BRIC economies is altering the competitive landscape. A bold, outward-looking strategy is required that reflects this shift in economic power.
Henry Chan is Landor Associate's President, Greater China
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| Favourite brands are | Favourite brands are not | Top 10 brands |
|---|---|---|
| Traditional | Unique | Yanjing |
| Arrogant | Different | Bright |
| Trustworthy | Glamorous | Pingan |
| Down to earth | Stylish | SINOPEC |
| Charming | Trendy | Men Niu |
| Sensuous | Up to date | Great Wall |
| Fun | Rugged | Suntory |
| Progressive | Innovative | PetroChina |
| Helpful | Straightforward | Jin Long Yu |
| Zhujiang (Beer) |
| 10 years ago | Britain is still | Britain became |
|---|---|---|
| Traditional | Traditional | Less restrained |
| Upper class | Upper class | More dynamic |
| Arrogance | Arrogant | More energetic |
| High performance | High performance | Less unapproachable |
| More kind | ||
| More friendly | ||
| More intelligent | ||
| More reliable | ||
| More trustworthy | ||
| More unique | ||
| More daring |
