China began celebrating "Chinese Brands Day" on every May 10 in 2017 in line with a decision approved by the State Council, the cabinet, marking the creation of Chinese brands as a state-level, nationwide drive. Since then, promoting national brands has remained a hotspot topic.

However, Professor Fu Guoqun at Peking University's Guanghua School of Management pointed out that the "national brands" narrative betrays a hint of self-victimization as well as a sense of exclusivity, which is not compatible with our country's call for full equality among ethnic groups and nations and efforts to build a community with a shared future for mankind.

According to Fu, also head of the Chinese Marketing Association of Universities, it is understandable to promote homegrown brands, but the phrase "national brands" itself is rather problematic and defies logic explanation. Given how the phrase has been used, it might even be a bad influence on the development of Chinese companies' brands. He urged caution in using the phrase "national brands" in academic writings, news reporting, and, particularly, in government documents. 

1. The origin of the "national brands" concept

The phrase "national brands" and the drive to promote them usually occur in countries that are relatively underdeveloped as their enterprises seek to mobilize public patriotic fervor to back their development and protect them from the competition of foreign brands. In the 1930s, there was a campaign to encourage buying homemade products instead of foreign ones at the grassroots level in relatively developed Chinese cities such as Shanghai and Suzhou in response to huge inflows of foreign capitals and merchandise.

Suffice to say, it is necessary to campaign for domestic brands when homegrown enterprises, especially the budding ones, are endangered and their government fail to offer adequate support. To some extent, it is a narrative employed by the weak for self-protection

Despite some common traits, our current Chinese brands drive is quite different from the 1930s one. Both aim to protect and stimulate the development of homegrown brands and boost domestic economies, and resort to public support. However, while the targeted brands and enterprises of the 1930s campaign were mostly weak and small, our current one aims to further promote domestic brands, and encompass government, industrial and public efforts to close the gap with influential brands from developed countries. 

A big difference from the 1930s is that our government now is much stronger and our economy is catching up. Meanwhile, our home brands focus more on improving themselves and surpassing foreign counterparts rather than guarding themselves against foreign competitions.

Despite China's economy being the second largest in the world, the development of its brands severely lag behind its overall economic and industrial development. According to Interbrand, only one Chinese brand, Huawei, entered the top 100 world's most valuable brands in 2018. It is then completely understandable that the country kicks off a drive to promote Chinese brands.

Both objective and subjective factors play their parts in the lagged-behind situation of China's brands.

First, enterprises haven't invested enough in long-term brand development since many focused on earning fast money amid rapid economic growth and lacked motivations to build brands. Meanwhile, with poor understanding of brand building, many companies don't have their own brand management teams, rather copy others' models and are too eager to see results.

Second, brand development follows a certain pattern, and those emerging from an economy just catching up need some time before winning market acceptance. The amount of time needed can be different in different industries, but for a mature industry, it could be ten to 15 years. In other word, even when China's companies are on a par with their counterparts in developed countries in product and service quality, it might still take them a long time to be accepted by customers.

Take Japanese automakers as an example. In the 1980s, Toyota's products already surpassed those made by big American brands in many aspects, but the U.S. and European customers didn't believe that Japan was capable of making automobiles that good. It was not until the 1990s when Japanese automobiles conquered the middle- and low-end market that they began to present high-end brands. Similarly, products of Samsung and LG from South Korea were already of leading quality in mid-1990s, but they only became competitive in the international market after 2000.

2. Why we should exercise caution when using the phrase "national brands"

First of all, it is very hard to plausibly define "national brands."

If defined by equities, then Volvo, owned by Zhejiang-based Geely, should be regarded as a Chinese brand, while Tencent and Alibaba become foreign since their largest shareholders are both foreign companies. Meanwhile, if we label a brand that has been developing in a certain country and become culturally embedded there as its national brand, then Transsion, a mobile brand owned by a Chinese company but became full-fledged in the Africa market, will suffer an identity crisis.

Furthermore, if a brand currently owned by a Chinese company is to be brought by a foreign group, does it necessarily mean its nationality will change? In the age of globalization, many aspects of a brand -- from equities, brand management, brand concept, originality to the place where it grows -- transcend traditional geographic boundaries. If "national brands" was a useful phrase back in the 1930s and even 1950s and 1960s, now it is almost rendered meaningless.

Second of all, the core logic behind "national brands" goes against China's reform and opening-up trend. One idea of campaigning for "Chinese brands" is that the government should map out favorable policies to back the development of domestic brands, which means foreign brands and companies will be discriminated against. This is obviously not in line with the country's reform and opening-up efforts or its promise to treat domestic and foreign businesses equally.

Also, "national brands" appeals to patriotic feelings, creating an "us or them" binary thinking among customers and urging them to favor the former. In reality, if domestic brands can match or surpass foreign ones in quality and service, Chinese customers will already be inclined to pick homegrown brands without patriotic emotions at play. If they lag behind, rousing patriotic feelings is no different from playing the victim, and it will not benefit these companies in the long run.

Last but not least, for brands that aspire to go global, such as Huawei, Lenovo and Xiaomi, being labeled "Chinese brands" might instead hurt their chances. They need neither government favors nor patriotic sympathy. What they need are an environment for fair competition and policies that are steady, consistent and impartial.

3. Tell Chinese brands in a globalized language 

Words reflect the mind. I recommend cautious use of "Chinese brands" also because the phrase carries a hint of playing the victim as well as a sense of exclusivity, which is not compatible with our country's call for full equality among ethnic groups and nations as well as efforts to build a community with a shared future for mankind.

Huawei has set an example for other Chinese companies in how to build a brand and tell its own stories. Facing a severe crackdown from the U.S. government, its CEO Ren Zhengfei never resorted to patriotic emotions or hit back by attacking the U.S. government and industrial rivals. On the contrary, Ren expressed gratitude to the U.S. government on many occasions and called for the Chinese government to open up further in response to American protectionism. These were words and deeds befitting the strong. Where did they come from? They came from continuous investments in innovation, a customer-first brand concept and the unity of its 180,000-strong employees.

Huawei's example shows that a brand is built upon such key factors as quality, innovation, entrepreneurs' vision and volition, instead of government support and protection or patriotism-fueled sympathy.

As the Chinese economy becomes stronger and its customers more mature, Chinese brands are seeing unprecedented opportunities. Our research shows that more and more Chinese customers, especially younger ones, are growing more confident in Chinese brands and products.

It shows the country's products are closing in on foreign brands in terms of quality, service and design, and also reflects that the stereotype prevalent in the 1980s and 1990s that imports were better than the homemade is fading out. Consequently, both Chinese enterprises and communities should adjust their mindset and view brands from the developed countries with a cooler attitude. Of course it does not mean that we don't need to learn from their brand building experiences anymore, or that we make light of them. On the contrary, we need to import and absorb Western companies' time-tested management knowledge and system, and improve upon it so as to ultimately surpass them, much like Huawei did. 

Similarly, we need to hold dialogues with Western companies and customers instead of telling our stories in a language and a narrative that are difficult for them to understand. For instance, when evaluating the value and influence of a brand, some people rather play the victim card, thinking that the valuation standards developed in the West will automatically favor Western businesses and push out Chinese ones.

Meanwhile, some domestic evaluation systems even confuse a brand, an intangible asset, with a company's tangible assets and sales volumes. According to these standards, many massive Chinese enterprises undoubtedly have their spots on the charts of the world's top brands. Such evaluations do satisfy some people's vanity as well as some officials and leaders of state-owned enterprises who are obsessed with their performance records. However, do they have any positive impact on the development of Chinese brands? One needs to think hard about this.