Importance of country brand: 'Made in China' signals quality

WARC, 10 March 2014

SHANGHAI: China now ranks ahead of South Korea among consumers worldwide in terms of its reputation as a country of origin for brands, signalling a major shift in perception according to a new study.

FutureBrand, the brand consultancy, surveyed more than 1,000 consumers from each of the US, France, Brazil, India, China, Japan and Australia for its "Made In" report looking at the importance consumers attributed to where products were produced. The 'made in' term covered five layers: sourcing, design, manufacture, assembly and company incorporation.

Overall, China ranked ninth, with South Korea on tenth. Japan was the only other Asia Pacific country in the top ten, in fourth place. India was in 14th, ahead of Australia (16th) and New Zealand (17th). The top three were the US, France and Germany.

Countries' rankings varied significantly depending on the sector being considered. China, for example, performed most strongly in the electronics (5th), automotive (9th) and fashion (10th) sectors.

South Korea featured prominently in the first two of these – electronics (4th) and automotive (8th) – as did Japan , which topped the electronics category and was second in automotive. Japan was also among the leaders in food and beverages (5th), personal care and beauty (6th), fashion (5th) and luxury (6th).

"Country of Origin serves as an important heuristic that provides consumers with a frame of reference to guide their brand choices," explained Sarah Reiter, FutureBrand President, Asia Pacific.

"Based on our research, where a product 'originates from' is more important to consumers than its price, availability or style," she added.

She saw Chinese brands shrugging off earlier negative stereotypes – 'cheap, low-skill, low-tech' – and shifting towards an association with 'modern, sophisticated, high-tech'.

While several companies were gaining these revised perceptions via acquisition of foreign firms, home-grown phone maker Xiaomi represented a new generation of Chinese brands.

But FutureBrand warned that if they wanted to continue this development Chinese companies would have to move beyond simply building products and corporations to creating brands that held an emotional appeal for consumers.

"This means both focusing on delivering 'authenticity', a key driver of consumer preference, as well as understanding when, where and how to leverage China's unique Country of Origin for its own future brands," Reiter said.

Data sourced from FutureBrand, Campaign Asia Pacific; additional content by Warc staff

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