China Daily: A global brand with profound China heritage

March 14, 2013 - 10:12am http://www.chinadailyapac.com

“You hear people say Lenovo is a Chinese brand, but we are a global brand that has a deep heritage in China,” says Jack Lee, corporate vice-president of the Lenovo group.

While Lenovo, the personal electronic products giant which ranks 23rd as the most valuable Chinese brand in a BrandZ report in 2013, Lee said the company draws 58 percent of its revenue from overseas markets. The brand not only leads the mainland’s PC market with a 36.7 percent share, it’s also the No 2 in Middle East, African and Canadian markets.

“We work very hard to achieve that,” he said, adding that their dedication to build revenue overseas is critical. “One must not use ‘Made in China’ as an excuse, and give people a reason to buy,” he said. “In that way, if you go out, you are not a one-trick pony, you are not a China play. A lot of people know Chinese products, but they don’t know Chinese brands. It’s a bit shameful for me to go outside and find out that the brand consumers only recognize is Tsingtao beer. There should be a lot more. It’s our responsibility to make these brands not just big in China but also well-recognized worldwide.”

The industry is all about speed and validity, Lee said. However, to build a global brand, one should always invest in the long term and not tentative. “My chairman always says, M&A (mergers and acquisitions) goes like when you want to buy, people don’t want to sell to you and when they want to sell to you, you don’t necessarily want to court.”

Back in 2011, Lenovo bought the PC branch of NEC, the then biggest player in the Japanese market. “Our strategy is localization through acquisition. So immediately, you get there.” But Lee warned “that is only meaningful when it adds value to your brand”, adding one should spend on building brand equity. “Don’t expect a quick ROI (return on investment). I guard A&P (advertisement and promotion) tougher than anything else. I believe branding will finally drive margins.”

Besides, executing strategy in a well-choreographed way helps a great deal. Lee pointed out that while Intel is an engineer excellent company and Microsoft is a product excellent one, Lenovo is execution excellent. “Some say sales people are just box movers. It’s true. But this is the industry we are in. My black box versus your black box, but my black has something better than yours. We rely on frontline workers. The frontline sales are what we go for … A lot of Chinese companies do big projects with low margins, but we believe in strong performance,” he said.

Last year, Lenovo revenue has increased by 12 percent to $9.359 billion, while earnings jumped by 33 percent to $205 million. In March, the company won back its blue-chip status as one of the 50 HSI constituent stocks. “That curve is nice, but not easily done. You need to have a strong execution to ensure results.”

To be global also means believing and investing in diversity. “Not just localization, but hiring people who understand the local market,” Lee stressed.

Source: http://www.chinadailyapac.com/article/global-brand-profound-china-heritage