Buffett’s Endorsement Of Trands, Suitmaker For China’s Government Elite, Gives Small Clothing Brand International Notoriety
Warren Buffett's endorsement of Chinese high-end menswear designer Trands sent its stocks soaring
Warren Buffett’s interest in China as an investment destination is well known, and his words of praise for (or investments in) the occasional Chinese company seems to have the effect of boosting that company’s visibility abroad virtually overnight. H is company’s $230 million investment in Chinese electric and hybrid automaker BYD has elevated what was only a few years ago a fledgling battery maker into a brand which is set to enter the US market as early as next year. So for little-known (even in China) Chinese menswear designer Trands, Buffett’s endorsement of his newest Chinese-brand-of-the-moment is definitely exciting news — especially because their stocks have risen 70% since the release of a video in which Buffett extols the brand’s qualities. As the Wall Street Journal writes today,
Move over Brioni, the truly rich and powerful are wearing Trands.
The obscure menswear label is produced by Dayang Group, a clothing company founded by Li Guilian, 63 years old, a diminutive farmer-turned-fashion mogul, in northeast China.
Ms. Li’s company got a major boost after Mr. Buffett, chairman and chief executive of Berkshire Hathaway Inc., recently appeared in a Dayang promotional video, posted on the company’s Web site. He heaped praise on Ms. Li, her company, and the nine Trands suits he proudly owns. Shares of Dayang’s Shanghai-listed subsidiary, Dalian Dayang Trands Co., have soared by more than 70% since the video was posted on Sept. 10.
Posted in Business, China, Fashion, Luxury
Tagged brioni, buffett, BYD, China, chinese, Fashion, geely, Investment, Luxury, trands, trend, warren buffett
Recent Interest By Chinese Automakers In Established Brands Like Volvo, Saab Show Their Global Ambitions; But Will Western Consumers Choose To “Drive Chinese”?
Can BYD crack the American luxury car market? Only time will tell.
With well-known auto brands like Sweden’s Volvo and Saab up for sale, Chinese brands Geely, Beijing Automotive and FAW — relative unknowns in the global car market — have been in the news as possible suitors. It is no secret that Chinese automakers have their sights set on the export market, and want to see their vehicles gain popularity on lucrative markets like North America. Here, though, is the largest opportunity as well as the most significant challenge faced by Chinese car brands, a bit of a catch-22: while China is the world’s largest auto market — owing, naturally, to its vast population — Chinese car companies need to develop their luxury fleets and export more in order to turn a substantial profit, but for higher-priced vehicles, Chinese consumers virtually always choose foreign-made automobiles, and Chinese brands are almost completely unknown by luxury car buyers abroad.
At the same time, Chinese carmakers must come up against biases about the perceived quality of their products — fostered, perhaps in a large proportion, by the fact that Chinese brands have absolutely no brand equity abroad, since:
1.) most of these companies are only a few years old, and
2.) reports about Chinese-made vehicles tend to be on the sensationalist side and focus on a quality gap or on perceived “counterfeiting” of car models. While many of the problems faced by Chinese carmakers abroad boil down to sloppy or simply “bad” PR, it is, in some ways, understandable that non-Chinese car buyers know little about Chinese car companies — because many Chinese car buyers don’t know much about them either. Quite simply, they need to work harder to differentiate themselves, pin down strong brand messaging, and really push hard to ensure they conform to all safety and emissions standards — or exceed them.
Posted in Automobile, Business, China, Investment, Luxury
Tagged america, auto, automotive, Beijing auto, beijing automotive, BYD, China, FAW, geely, honda, hyundai, japan, kia, korea, Luxury, luxury car, north america, saab, toyota, US, USA, volvo, warren buffett
Western, Chinese Brands Vie For Customer Loyalty As Emerging Middle Class And “Nouveau Riche” Demand Continues To Grow
Buick has capitalized on its reputation for quality and luxury in the Chinese market, enjoying massive success and launching China-only models like the Excelle
As demand for new vehicles has remained sluggish in developed markets over the past two years, major automakers have rightly looked to retool their strategies to draw customers and build their brands in new markets. As we’ve written before, selling your brand in markets like China, where customers expect different things — and derive status from very specific brand attributes — represents both a major opportunity and a new challenge. A good example of an automaker that has benefitted from the “blank slate” allowed it by entry into the young Chinese market is Buick, which has a reputation as a car for older, or middle-aged, drivers in its native market, the USA, yet has — through aggressive branding and advertising efforts — developed a reputation as a sleek, luxurious, youthful brand in the Chinese market.
So how can car brands optimize their brand equity in China? Depending on where they come from, their strategies differ greatly. While American car makers like Ford have had great success in overseas markets like Europe by pushing their reliability and value, in the Chinese market imported cars are, generally, chosen by buyers to be a status symbol, rather than “inexpensive.” Ford, then, cannot compete on price alone, as Chinese automakers like Chery and Geely — which have sizeable lineups of entry-level models — will always be able to undercut them. As a result, it is important for foreign car makers to not just build their brand in China, but to build a strong brand in China, one that speaks to Chinese consumers in a way that domestically-produced autos cannot. To break it down further, foreign automakers need to build a strong, distinctive brand — a German car must fit Chinese conceptions of German cars, Japanese cars Japanese attributes and so on.
In practice, how are foreign automakers faring in their Chinese branding strategies? Today, Reuters looks into the “uphill road” these brands are traveling in China, and how they have refocused their branding strategies to varying degrees of success. Using the example of a “nouveau riche” car buyers who has traded his BMW in for an Audi — since the Audi has developed a strong reputation in China as a car for bureaucrats or (comparatively) “old money” while BMW is considered a brand for the nouveau riche (a group into which the buyer in question is loath to be grouped) — the article provides valuable insight into the particularities of a market so new that even seasoned marketers and branding execs are often at a loss to develop long-term strategies.
Posted in Automobile, Business, China, Culture
Tagged america, asia, Audi, auto, bmw, brand marketing, brand strategy, branding, buick, chery, China, chinese, east asia, europe, ford, geely, japan, japanese, korea, marketing, nouveau riche, old money, south korea, strategy
Chinese Automaker Looking For More Global Reach As It Bids For Ailing Swedish Brand
Volvo's purchase by Geely has been rumored for months. So far, according to a Swedish newspaper, Geely's bid is the only "concrete" one to date. Image © rumerz.com
China Daily cites unverified reports today that China’s Geely Automotive has made the only “concrete” bid for the ailing Swedish automaker Volvo. If the reports by an unnamed Swedish newspaper prove correct, a successful bid for Volvo could mean the domestic Chinese automaker could be one (large) step closer to developing into a truly global brand, achieving its ambitions to produce luxury vehicles alongside the budget models that have made it popular in mainland China. However, since most major Chinese brands lack practical experience managing foreign workforces or doing business in developed automotive markets like Europe and the US, any potential acquisition by Geely would be either a distant possibility or simply unfeasible from the get-go. As these reports are, still, unverified, they have been whispered about before — however, we still have to take a wait-and-see attitude to this developing story.
Li Fangfang, who writes often on the automotive industry and particularly the way that domestic Chinese automakers are using the global economic crisis as a sort of springboard for their nascent brands, points out that Volvo’s potential sale could present unique opportunities but also serious challenges for Geely:
Posted in Automobile, Business, China, Investment, Luxury
Tagged acquisition, ford, geely, geely automotive, negotiations, purchase, volvo
Analysts Indicate That Low Ownership Rates, Government Subsidies May Spur Faster Growth Of World’s Largest Auto Market
Dongfeng is looking to compete with other domestic Chinese brands to capture market share from foreign competitors
From the recent Shanghai Auto Show to news that the Chinese government plans to offer higher subsidies for consumers trading in old vehicles for new ones, China’s auto market has been a busy place in recent months. With the sluggish performance of carmakers in more developed global markets, the news that auto shares in China — currently the world’s biggest car market — are expected to outperform this year will, in many ways, comfort global auto companies.
However, as we have previously discussed, the news that Chinese car buyers are growing rapidly as a consumer base shouldn’t be enough for foreign automakers — as domestic brands like BYD, Geely, Chery and others vie for dominance in this rapidly-changing market, foreign automakers will have to invest heavily if they are to keep the lead they have built in the last 10-20 years.
Posted in Art, Automobile, Business, China, Investment, Luxury
Tagged Automobile, beijing, bmw, car, chery, China, dongfeng, geely, great wall, marketwatch, porsche, shanghai, shanghai auto show, vehicle
Formerly Budget-Focused Brands Like Geely Shifting To Lucrative High-End Consumer Segment
The Chinese middle class is an important and growing consumer segment, and Chinese domestic brands are increasingly relying on this group's future purchasing power to drive global growth
The Wall Street Journal has a great profile today about Chinese auto brands that have shifted 180 degrees in the last few years, changing their target market from the younger, budget-conscious first-time car buyer to wealthier buyers who may already own one or more vehicles. This represents a very significant change in tactic on the part of Chinese automakers, who until recently had all but given up on this consumer bracket, apparently convinced that it would be impossible to compete with foreign luxury carmakers like Mercedes and BMW, two brands that have made commanding inroads in the China market.
Posted in Automobile, Business, China, Economy, Luxury
Tagged Automobile, benz, bmw, BYD, chery, China, ford, geely, Luxury, mercedes, porsche, saab, vehicle, wealth
Multinationals Hope Domestic Consumption, Inland Movement Will Counterbalance Drop In Exports
The world's target market
CNN reports today on the hopes of many western investors and CEOs for the rise of the Chinese consumer to help lift up the sluggish global economy. With slowly-increasing consumption rates in a country still highly populated by savers rather than spenders, redoubled efforts by western and Japanese companies to retain and expand their customer base shows that they understand that the Chinese market — with its vast potential but cut-throat competition — is critical for their global strategy.
Posted in Automobile, Business, China, Culture, Economics, Economy, Fashion, Investment, Luxury
Tagged Apple, Audi, branding, Business, China, china market, computers, consumer, founder, geely, JNBY, louis vuitton, marketing, panamera, porsche, shanghai, shanghai auto show, strategy
New Luxury Models From Geely, Great Wall Target Evolving Market, Seeking Market Share From Foreign Brands
The Geely GE: Could Geely's first foray into the luxury market pay off? © Geely
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At the Shanghai Auto Show, foreign car executives have been discussing the prospects for their brands in the mainland China market as domestic carmakers begin to move beyond their traditional low price-point and into more high-end, luxury segments.
Posted in Automobile, Business, China, Luxury
Tagged Automobile, automotive, chery, China, geely, GM, great wall, high-end, Luxury, porsche, porsche panamera, shanghai auto show