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Ever heard of Lenovo, Haier, CNOOC? You will.
Their names don't exactly spark instant recognition: Lenovo, Haier, TCL, Pearl River Pianos, State Grid Corp., and CNOOC. If they mean nothing to you, just wait a few years. All of them are prominent Chinese corporations set to go global and may soon become household words.
No longer content to remain no-name suppliers of generic products for American and other offshore businesses, Chinese companies are setting out to become recognizable brand names. The Japanese have their Sonys, Toyotas, and Toshibas. Now, it's China's turn.
In the vanguard of this global movement is Lenovo, China's leading maker of personal computers. It burst onto the American scene late last year when it bought the personal-computer division of IBM for $1.5 billion (half in cash and the rest in stock).
Having passed muster with the authorities in the United States who scrutinize sales of American technology to foreigners, Lenovo is preparing to seal the deal with American consumers. It plans an extensive marketing and advertising campaign to implant the Lenovo name firmly in this country's commercial consciousness.
Lenovo has been working steadily to become China's first global brand. Two years ago, it changed its name from Legend to Lenovo (an invented word from Latin novo, meaning new) specifically because Legend was too common and already trademarked in the West.
In acquiring the IBM computer division, Lenovo gained the ThinkPad laptop and the ThinkCenter desktop, two of the best-known brands in the computer industry. Lenovo's strategy is to link its name with the better-known products, until they become synonymous in the customer's mind.
"There will be no doubt that ThinkPad is made by Lenovo, just like iPod is made by Apple," says Deepka Advani, Lenovo's senior vice president and director of marketing. The products will be produced under the IBM logo for five years. As the Lenovo brand becomes better known, the company will eventually drop the IBM logo and sell them as Lenovo brand ThinkPads and ThinkCenters.
The strategy should help Lenovo gain the recognition it wants, say some analysts. "The way the deal is structured, with IBM retaining a stake and putting its brand name on the line, will help them do that," says Oded Shenkar, professor of international business at Ohio State University and author of "The Chinese Century."
Lenovo is now taking the unusual step of moving its corporate headquarters from Beijing to New York State. The company's chief executive, Yuanqing Yang, plans to move to Westchester County soon.
From small fridges
Another Chinese company crossing that great divide between commercial anonymity and renown is Haier. The 17-year-old appliancemaker, based in the Chinese port city of Qingdao, began quietly selling in the US market in the mid-1990s. It now accounts for about half of the American market for small refrigerators (such as those used in college dorms).
Taking a page out of Lenovo's playbook, Haier announced that it is leading a group of investors bidding to acquire Maytag, the No. 3 American appliancemaker. That would give the Haier group control of such all-American brands as Hoover vacuum cleaners, Amana appliances, and Magic Chef ovens.
