Third of businesses see China as a threat

A third of British business leaders see China as a threat rather than an opportunity, while many underestimate the importance of branding their companies properly when entering the market, research finds.

A survey of 126 business leaders, which questioned selected respondents on their attitudes to China, finds 34 per cent rank the country as a business threat. Respondents in the media and communications industry are wariest at 41 per cent, followed by finance and business at 29 per cent. At the other end of the scale, senior leaders in politics and non-government organisations are overwhelmingly more positive with 81 per cent saying China represents an opportunity for UK companies.

When carrying out business in the country, nearly all respondents (98 per cent) recognise the importance of having a good relationship with local government in China and the same number also rate understanding Chinese customers, culture and languages as either ‘very important’ or ‘quite important’.

But Kevin Lin, founder and managing director of KL Communications, which commissioned the survey, describes as ‘disturbing’ the fact that only 22 per cent of respondents say having a Chinese version of their brand name and identity is ‘very important’.

Lin, a former Foreign Office interpreter who was Prime Minister David Cameron’s translator during his recent visit to China, points to Pizza Hut as a company that had a failed marketing strategy. He says when the restaurant chain launched in China it began with a simple translation of the name that had no connection to the brand or the product. Recently the company added the Chinese for ‘happy canteen’ to improve its brand presence.

He comments: ‘Western brand owners often bury their heads in the sand. You often see designer shops bearing a brand name in English but, in fact, shop staff use their own Chinese version of the brand name on things that matter to customers – instructions, labels and manuals.

‘The UK is competing against every other country for its place in China’s hearts and minds. Branding doesn’t work if your customers cannot even read or remember the name.’

Nearly half of the surveyed business leaders also underestimate the importance of trademark registration, with only 51 per cent rating the practice as ‘very important’, despite UK companies regularly quoting intellectual property infringement as one of the biggest deterrents to entering the market, Lin adds.

Lin continues: ‘It’s easy to complain but it looks as though we are not prepared to invest in one of the most obvious means to protect a company and a product.’

Nick Britton

Nick Britton

Nick was the Managing Editor for growthbusiness.co.uk when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...

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