beyondbrics

From sneakers to skin cream, Chinese consumer goods companies are no longer willing to kowtow to the foreigners who taught them branding. What’s more, they are taking their game to the big leagues.

Take Li Ning, for example, the Chinese gymnast whose sportswear brand is going upmarket to challenge the likes of Nike and Adidas in China. The brand is neck and neck with Adidas for second place – suggesting that increasing numbers of Chinese feet are happy to be shod by compatriots. A Chinese cosmetics giant is now seeking to emulate Li Ning’s success.

State-owned Shanghai Jahwa has made a play to lure Chinese women away from their L’Oreals and their Lancomes, to a brand famous from when Shanghai last tried to rival Europe for decadence – in the 1930s.

Shanghai Jahwa relaunched its iconic “Shuang Mei” brand under the name Shanghai VIVE – at prices of up to Rmb1500 ($220), stiff for a bit of face cream or a splash of perfume. The company is cultivating an aura of post-Depression glamour to sell the new line at the elegantly restored Art Deco gem, the Peace Hotel, recently re-opened on Shanghai’s renovated Bund.

The company is gambling that today’s beautiful people want local produce in a bit of Art Deco packaging, with nostalgia value thrown in for free. Shanghai ladies may have fond memories of their mothers or grandmothers using the famous cream; but, while a broader trend of Chinese consumers choosing value over foreign branding is taking hold, today’s consumers know that cosmetics are about quality, and rightly or wrongly, they think top quality comes in foreign packaging.

Sportswear or skincare, the bottom line remains: will Chinese consumers pay the same for a local brand as a foreign one? When that point is reached, China will be well on its way to the new high-value society Beijing is aiming for. The volume of sales at the new Shanghai VIVE store in the Peace Hotel may prove as good a proxy as any of the rebranding of China.

Additional reporting by Shirley Chen

Related reading:
Watches, handbags and boutique hotels for China’s luxury shoppers, FT beyondbrics

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