Dr. Kevin Lin, Founder & Director, KL Communications

UK Opinion formers see China as an opportunity but are not preparing as well as they might when entering the China market, according to newly published research commissioned by KL Communications.

66% of opinion formers rank China as more of an opportunity, with senior people in politics and NGOs giving the highest rating at 81%, whilst 41% of the media and communications industry see China as more of a threat (compared with the 34% overall figure). Perhaps unsurprisingly the areas that work most closely with China — the City and Business and Politics see it less as a threat than the Media and Public sectors.
Kevin Lin of KL Communications who works with UK companies entering the China market and whose clients include HSBC, BP, Tesco and BHS comments “As China has officially become the world’s 2nd largest economy with 1.3billion consumers, there is no doubt it offers tremendous opportunities for the UK. More worrying is what the UK is prepared — or not prepared — to do to capture this market. However, even 29% of City and Business seeing China as more of a threat is disturbing to me”
On a positive note, the research reveals that the UK is becoming more aware of what doing business in China entails — for example 98% of the opinion formers recognise the importance of having a good relationship with local government — something which is vital in China but not generally so important when doing business in the UK. “I’m very pleased to see that 98% of the respondents recognized the importance of the local government in China. Given the fact that the role of the local governments in the UK is very different, the result represents an extremely high level of the awareness of a different business environment in China.”

Similarly, the softer issues, understanding Chinese customers and understanding Chinese culture and language, score highly — 98% of all Opinion Formers rate these as either very or quite important.

More disturbing is that only 22% rate having a Chinese version of their brand name and identity” as very important. “Western brand owners often bury their heads in the sand. You often see designer shops bearing a brand name in English but shop staff in fact use their own Chinese version of the brand name on things that matter to customers — instructions, labels and manuals. The UK is competing against every other country for its place in China’s hearts and minds. Branding doesn’t work if your customers cannot even read or remember the name.” Kevin Lin comments.
Pizza Hut is a classic example often commented upon in China. First it began with a simple transliteration of its English name which made no connection with the brand or its offering. It’s only in the last few years that the company has added “happy canteen” to its name in an effort to improve the brand communication.

Lin continues “I can understand why people might think trademark registration is more important (91 per cent net important) — although if only 51% see it as very important, why is IP infringement regularly quoted as one of the biggest deterrents for a UK company entering the market? It’s easy to “complain” but it looks as though we are not prepared to invest in one of the most obvious means to protect a company and a product.”