Trade Resources News & Press Release Moving from Made to Branded in China

Moving from Made to Branded in China

Moving from Made to Branded in China

The American Association of Industrial Design has estimated: for every $1 invested in industrial design, you can regain of $1,500 back. With "ingenuity" to successful "manufacturing", industrial design has become a “second core competency” for enterprises. The experts pointed out that " industrial design in China, is undergoing a “from scratch” process, lacking only in bands, but not designs." There are no really mature international brands in China right now. Many large enterprises are leading in the domestic industry, but there are still some distance away from creating their own core DNA. Most of the enterprises are still in the development stage; their understanding of the industrial design has only just begun. From "Made in China" to "Designed in China" and then on to achieving a "Brand in China”; Chinese enterprises still have a long way to go. Low-end processing is impacted mostly by economic turmoil At the beginning of the year, orders were reduced, due to the impact of the economic downturn in Europe and America; China's import and export downturn didn’t rebound until May. This was a heavy blow to many small exporting SME’s; especially to those in the Pearl River Delta region. Data shows that in the first quarter of this year, the increase of import to export value and the industrial output in Guangdong had fallen sharply. The private sector economy in areas, such as Foshan, which had kept developing, even in the economic crisis in 2008, had also decline sharply this time. According to Made-in-China’s investigation of its tens of thousands of SME’s members engaged in foreign trade, difficulties in finance, improved export standards and reduced orders have troubled many SME. "The lowest end processing trade is always the one affected the most by economic turmoil” Tong Huiming, the president of Industrial Design Colleague in Guangzhou Arts Academy and Executive Director of China Industrial Design Association, pointed out sharply. Many domestic enterprises doing OEM and foreign trade rely entirely on foreign orders. There are few choices when they meet bad international economic situations and they face sharply reduced orders, like this year. Industrial design promotes products transformation "Apple is the most typical example” Tong Huiming explains, the quality of products made in China has now been recognized; Chinese enterprises do not lack manufacturing capacity. The world-popular Apple products are actually from Chinese factories like Foxconn, but Foxconn only does OEM and the income is very low. Most of the overall revenue of the products becomes the property of Apple, because Apple has its own unique design and brand. What can industrial design do for a product’s added value and production efficacy? There are already some success stories from enterprises. As an award-winning enterprise in the 2011 Event--Beauty of "Made in China", Dongguan Dingli serves as a good example. Their main export is car air-conditioning to America. US regulation requires vehicle engines to be turned off when idling for an extended time. However, when the engine is turned off, air conditioning will also shut off. It is very tough to bear this in the summer. Dingli changed the air-conditioning power to storage mode, that even if engine turns off, the air conditioning still keeps running. Thus, Dingli was able to get uninterrupted export orders, even in the difficult periods for SME’s during the second half of last year. We have learned that, in order to encourage SME’s to promote, intellectual property, research and development, Made-in-China.com will cooperate with Southern Weekend. In addition we have organized the event, “The Beauty of Made in China", in which the selections range from SME's own product designs to colleges and design institutions. We hope Industrial design would promote products transformation. These select events will form a sustainable atmosphere of public opinion and enable SME’s to win a pricing advantage in domestic and foreign markets. They can also launch a number of outstanding products, which can show the level modern Chinese manufacturing rich in functionality, technology and aesthetic design. Xiaohu, Vice President of Global Light Industrial Products Business of CSTC Standards Technical Services Co., Ltd., said that, based on the experience of their company, the decline in export orders have effected mostly SMEs, many of their orders were absorbed by large enterprises. Compared with large enterprises, a SME has few advantages in unit cost and financing cost, so they must pay attention to product quality and innovation. In Xiaohu’s opinion, SME’s have to hold on to their main advantage, the vitality of their enterprise, rather than to take shortcuts that will hurt their own long-term development. Building "Brand in China”: a long way to go "Chinese enterprise industrial design level is still uneven at present, there are some doing well, but some is just getting started." The famous product designer Yang Mingjie, pointed out, that the level of industrial design can probably be divided into three phases; the first one is mature international brands. It has its own standardized system for its brand, but such enterprises in China hasn’t yet appeared. The second is the “leading brand” in the industry; domestic examples Huawei, Lenovo, Midea and other enterprises have reached this phase, their product systems are relatively mature, but the core - DNA of their brands are still a little shy. The third is developing enterprises, including OEM and export enterprises. The understanding of design, in these enterprises, has only just begun; they put their efforts on innovative products to capture market share, rather than in to building a brand. Yang Mingjie said different types of businesses require different methods of industrial design at this stage. Take the third kind company for example, industrial design is still at the product design stage and the product is a part of the brand. But branding also includes services, channels and the other critical aspects. Building a brand is a long term process. Compared with foreign brands that have been established for over one hundred-years, Chinese enterprises are still far behind; being established for only one or two decades. "Many brands are well known, but the core product technology is still not sufficient, even if it follows someone else’s model". "Some SME sells MP3 today, but mobile phones tomorrow, never building a brand successfully" Tong Huiming also pointed out branding is a long-term effort; it can’t be achieved in the short term. He said that the change from "Made in China" to "Designed in China” is an inevitable way to go and eventually leading to "Branded in China".

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