Since opening up to foreign trade and investment a little more than four decades ago, and also implementing free-market reforms, the vast country has been home to one of the world’s fastest-growing economies, with real annual gross domestic product (GDP) growth averaging 9.5 percent through 2018. This the World Bank described as “the fastest sustained expansion by a major economy in history.”
What it has meant that China, on average, doubled its GDP every eight years, and lifted an estimated 800 million people out of poverty.
But it has done this all in a very specific way, without necessarily emulating or copying its affluent counterparts elsewhere. Indeed, one of the most persistent misconceptions about China is that, given its new position as a laissez-faire, wealthy nation, it inevitably will adopt the trappings and sensibilities of the United States and Europe, as did Japan in the 1970s and South Korea in the 1980s.
But as travelers to China will tell you, it is a world unto itself, often blissfully unconcerned about what is being done elsewhere, and how it is done. This does not mean it necessarily rejects the icons of Western affluence, but neither does it automatically accept them. In short, China does things its own way.
THE CHINESE PREFER BUYING CHINESE
Take branded goods, for example. It is well known that the newly wealthy Chinese consumers are brand hungry. But what do they prefer?
Bloomberg recently conducted a study of the country’s most popular top brands in China. The usual suspects, like Apple, Microsoft, Intel, IKEA, Nike, and BMW all made the top 50 list, but none of them cracked the top 10. There most were Chinese brands, some of whose names would hardly resonate elsewhere.
The most popular Chinese brands include Alipay, an online payment system that is used by 622 million individuals, almost half of the population. Another at the top of the list is better known outside the country. It’s WeChat, the country’s most popular messaging app, with 901 million active users.
Taobao, which literally means “searching for treasure,” is another of the most popular brands. The shopping subsidiary of Alibaba, it is today the world’s largest e-commerce platform, with more than 700 million active monthly users, who open the app on average of seven times a day.
Chow Tai Fook is China’s most popular jewelry brand, controlling 7.6 percent of the country’s market on its own.
Kering’s Chinese brand, Qeelin, uses specifically local motifs in its jewelry design, like pandas.
DOMINANT CHINESE BRAND NAMES
Branded jewelry accounts for only about 15 percent of China’s overall jewelry market, which was valued at about $100 billion in 2020.
Despite the presence big-name jewelry brands like like Cartier and Tiffany & Co., it is Chinese companies that dominate. Chow Tai Fook, for example, controls 7.6 percent of the market on its own. Established in Guangzhou, it developed from goldsmith’s workshop into a global company worth $19.5 billion, on a par with Tiffany & Co.
Now headquartered in Hong Kong, Chow Tai Fook’s development into one of world’s two largest jewelry companies came because of its grown on the Mainland, where its added 741 points of sale. And as opposed to its Western competitors, which limit their activities mainly to Tier-1 cities, it focused also on smaller population centers, Tier-4 and Tier-5 cities.
Another popular Chinese jewelry brand is Qeelin, named for a Chinese mythical animal. It has a strong Western connection, having been established by the French entrepreneur Guillaume Brochard, who teamed up in 2004 with Dennis Chan, a Hong Kong designer. The firm was acquired by Kering in 2013.
Qeelin’s growth strategy was largely to concentrate on Chinese elements, including the use of traditional symbols,like the panda, and the goldfish. It is one of Kering’s fastest-growing brands and expects reach to 44 boutiques in China by the end of 2021.