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Global Marketing

Why aren’t Chinese Car Companies coming to the US?

AMERICAN PERSPECTIVE

As an American with a view of the US car market filled with brands from around the world, the most noticeable absences from this market is a major Chinese brand. The vehicles sold in the US coming from the US market our held with high value, quality, and prestige. The ability for Chinese car companies to develop and sell low priced quality vehicles that could be popular in the US, seems like a logical expansion of their business.

One major problem with bring a Chinese car company to the US, might be the general prejudice toward Chinese brands. Americans have two views of the Chinese brands and markets. One narrative is of poor quality or cutting corners to produce a low price product, and the US media highlights recalls of companies with products produced in China. The resulted could be that US customer will be weary of buying a Chinese car because of a fear about how dangerous the vehicle could be. The second narrative prominent in the US about China is that we’re in direct competition with Chinese, and that US are in a constant economic battle for the world economy. The introduction of Chinese car companies into the US market could be met with a cold reception. Chinese brands would have to overcome these two narrative before moving into the US market.

CHINESE PERSPECTIVE

Chinese automobile industry started comparatively later than western brands. However, benefiting from the fast-growing economy, Chinese domestic auto market has been dramatically expanding. Several Chinese brands took the chance and became world-class sized automobile manufacturer. Brands like Geely, BYD, and Great wall, initiated their international strategies, also worked with well known auto brands like Volvo, Mercedes-Benz, and BMW to either form joint ventures on new product, or strategically acquire companies to plant roots in foreign markets.  For example, Volvo brand is 100% owned by Chinese auto brand Geely. Moreover, Geely just purchased 10% of Benz’s stock on Feb 2018. Chinese brands have decided not to build their image in the US market, in favor of more strategic brand acquisition entry approach. This shows the strength of the Chinese auto industry and how it has become more influential in the world.

American customers have a very close relationship with the car business. Like the American community and social activities are based on cars. No doubt the people in the US have the most diversified and unique understanding about their cars. For Chinese auto brands, entering US market with a clear eastern image will be difficult. Instead of building new marketing structure, Chinese brands will also need to learn more about American culture, also offer the opportunity to the foreign customer for them to know more about the Chinese brands.

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Global Marketing

Under Armour – East versus West

AMERICAN PERSPECTIVE

Under Armour (UA) has been facing several challenges over the past year in growth of their business in North American market. The main problem with the North American market is that the sporting good market is over saturated with multiple sport brands with better brand recognition. UA saw impressive gains over the past decade as a new and exciting brand that was cutting edge. However, after a decade of constant marketing and battling for market share, UA has lost some of it cutting edge appeal and has become hard to differentiate from the rest of the sports apparel market. UA move to acquire Stephen Curry as one of its star spokesmen has not delivered success that other basketball stars have done for its competitors. The launch of the Curry 4 hasn’t seen large success, and the branding of shoe has had limited impact on the market. Curry is arguable one of the best basketball players NBA, but his brand is friendly and soft spoken. The limited success of Curry in the North American market could be attributed to his limited appeal compared to other players that are more dominate or outspoken that you might associate with other big name sneaker stars such as Michael Jordan, Lebron James, or Kobe Bryant.

CHINESE PERSPECTIVE

Differently, UA has been doing excellent in its new market, China. As one of the most important new markets, UA had increased it's annual revenue more than 100% almost every year after entering China in 2011. Except for benefits like gaining new market share, competing directly with major players like Adidas, Nike; UA successfully created its new brand position and image in China. UA’s development in China can be broadly summarized as three phases. The first phase, a new image of sports outfit. The word was used to describe UA’s workout clothing was  “Hormonal.” The material closely fit people's body curve, customers with a little bally can no longer cover their  “secret” by wearing a loose cotton shirt from Nike or Adidas. However, those who have built their good shape, have a better way to show-off their achievements. Chinese culture has long been marked as conservative and traditional. Surprisingly, more and more people started to accept UA’s westernized design, after seeing models  and public figures post their hot pictures with UA’s clothes on from social media.

Beyond that, for having the same outfit and admired by surrounding friends, people also start to go the gym and buying UA as their outfit and equipment. The second phase, a good brand representative. According to information from WSJ, UA has already opened more than 120 stores in China by the end of 2016. During the summer season, UA’s new brand Spokesman, NBA star, Steve Curry went to China and visited all cities that has UA’s flagship stores. As data shows, basketball shoes contributed 1/3 of UA’s revenue in China, and nearly 80% of shoes sold were Curry’s signature series. Comparing to other sports brands’ representatives, Steve Curry has a more approachable, team player image, which are personalities that admired by eastern culture. The third phase, more innovations for going further. As the biggest consuming market in the world, innovative products usually make their milestones with contribution from the Chinese market. UA spend 150 million acquired work out tracking app MapMyFitness, started its digitized workout era. After that, UA spend more than 500 million to purchase calorie calculating app MyFitnessPal and European fitness app Endomondo. These digital platform enabled UA to have the biggest fitness database. At the same time, China has the most mobile device users in the market. Will UA be able to transfer workout from offline to online, can really make differences on the brand’s development.