Patriotism expels Korean brands in China
HAN WOO-DUKThe author is a senior reporter of the China Lab.
There is no Korean brand in the Chinese market. It is hard to find Korean cars, mobile phones, televisions and even cosmetics. “How did this happen?” asked the president of a mid-sized cosmetics company to the head of the team in charge of sales in China.
The team leader answered, “Due to young Chinese consumers’ tendency of ‘patriotic spending,’ foreign brands are losing their market share. I cannot see any solution to this.”
Really? Isn’t this just an excuse?
Unfortunately, it is true. Even a super global brand can be kicked out of Chinese market overnight if it becomes a target of “nationalism.” Patriotic consumption is more prevalent due to the U.S.-China hegemony competition.
Nike, the leading sports brand in the world, has suffered. The company became a target of “overthrowing” after deciding to not use cotton from Xinjiang due to China’s forced labor of the Uighur people in the early 2021. In the end, the biggest market share went to ANTA Sports, a Chinese brand.
McKinsey analyzed that young Chinese consumers are not easily lured by foreign brands. What matters for them is quality and price. The consulting company pointed out that the core of the problem is the innovation of Chinese companies rather than patriotic spending tendency. In fact, even an American YouTuber admitted that the quality of ANTA basketball shoes is as good as those of Nike’s.
But this is unfair. Galaxy smartphones have the biggest global mobile phone market share of 22 percent. But in China, it has less than 1 percent of the market share. The situation is similar for Hyundai Motors. Yet should they just blame themselves?
What should be considered here is the state intervention. That was the case for Nike. After the incident, Nike suffered from the tone of encouraging boycott by the Chinese state media. The Chinese foreign ministry spokesman stated, “Nike will not earn a penny in China.” It is similar to how Galaxy and Hyundai Motors rapidly lost their presence in the Chinese market during the Thaad conflict.
There is only one way to get it back. Korean products must attain quality innovation to overwhelm Chinese products, and the government must help prevent external influence through stable management of Korea-China relationship. The former is up to the companies while the latter is a job for the government. If that is impossible, the absence of Korean brands in China will continue.
with the Korea JoongAng Daily
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