Will China Struggle to Build a Global Brand?

According to This, they will.

From such a strong base, international expansion must seem logical and inevitable. Haier is by no means the only Chinese firm eyeing up the rest of the world. But while the big oil and commodity producers are buying resources overseas and most mainland manufacturers are content to sell their goods under foreign firms' labels, Haier is trying something much harder: to create a genuine global brand.

It has had some success. Its overseas sales are currently $1 billion. Haier claims 30% of the market for small fridges and half the market for wine coolers in America, and a tenth of Europe's air-conditioner market. Haier is now the world's fourth-largest white-goods maker behind Whirlpool, Electrolux and Bosch-Siemens and ahead of GE—though that is mostly owing to its big domestic production volumes. Mr Zhang wants to be number three.

But size does not automatically mean quality, just as buying name recognition at any price (that Manhattan HQ) does not equal careful brand-building. Haier's drive into markets abroad mirrors a push into new markets at home. In both, diversification is driven by opportunism and desperation, not good strategy. Predicting that profits in 2004 will be flat at 2 billion yuan for a third successive year, despite an expected 20-30% rise in sales, Mr Zhang admits that plunging returns in his core white goods business are driving him abroad. After China joined the World Trade Organisation, he says, "every multinational set up in China. Margins are low here. If we don't go outside, we cannot survive."

Much of what the Chinese are looking to do is in fields where there is already competition. I think it is easier to build broad brand recognition if you do it in a young and growing field.