China Perspective I: The Value of Brands In An Environment of Distrust

If you visit a tier three city in China, you might get an idea of what service and product quality standards were like in the U.S. in the late 19th and early 20th centuries – when “buyer beware” and “snake oil salesmen” were hallmarks of the times. This historical perspective may in turn help point the way forward for marketers entering these fast-growing, important markets expected to drive most of China’s growth over the next 10 years.

In the less developed counties we visited for recent research, I heard consumers talk about their frustrations in making major consumer durables purchases. Many of the larger household items that they desire do not deliver on the most basic levels of trustworthiness. For instance, the unfortunate shopper could buy a knock-off (a problem not restricted to luxury hand-bags), or a seemingly new product that is actually made with used parts. Of course an unlucky shopper could simply buy a lemon that doesn’t work the way it should. That’s when the real problems begin.

While we may complain about service in the U.S., nothing compares with the typical experience for residents of China’s tier three cities. When temperatures are hovering at 100 degrees Fahrenheit, a broken-down air conditioner is not acceptable, especially if you’ve invested a significant portion of your disposable income on the item. Consumers described situations where they called the service number, and there was no answer for days on end. If a customer were lucky enough to get a repair-person to come to her home, the individual would often make excuses and leave without having addressed the problem. Complaining at the store where the purchase was made could even result in being insulted and laughed at by employees.

These people expressed a strong, conscious demand for authentic brands that could be trusted. This need for consistency and trustworthiness is not dissimilar to the early 20th century of America. Brands like Maytag and Sears became incredibly successful by offering moderately priced, reliable and well-serviced products. They stood behind their products and delivered on their promises when many others did not – proving that communicating a promise is not nearly so important as delivering on that promise.

The opportunities for trustworthy, reliable brands in these third tier markets are huge. In an environment where little can be trusted, the brand that delivers on what it promises is likely to capture long-term loyalties for years to come. This will be true for retailers and product brands alike. And this simple insight remains true in America and China alike.