Chinese firms earning more from overseas on better perception of 'made in China'

Customers buy computers at a store of Lenovo in Shanghai. [Photo/IC]

Chinese brands, especially those from the technology sector, continue to earn an increasing proportion of their revenue from overseas, according to the newly released 2016 BrandZ Top 100 Most Valuable Chinese Brands.

The top three brands with the greatest proportion of revenue from overseas business include Lenovo Group Ltd, with 68 percent of its revenue from international business, followed by Huawei Technologies Co Ltd, a newcomer to the ranking with 62 percent, and ZTE Corp with half of its revenue from business overseas, it said.

"With Chinese companies continuing to expand their operations overseas and a more positive perception of 'made in China', Chinese brands are deriving increasing overseas earnings," said Doreen Wang, global head of BrandZ, Millward Brown.

The expansion of international business is especially important as the growth of the domestic economy slows and Chinese companies attempt to raise awareness of Chinese brands, she said.

Wang said she believed that Chinese companies would see a steady growth in their revenue from abroad in the years to come.

Leading the top 20 Chinese brands with most revenue overseas, Lenovo, the world's largest PC maker, continued to grow its PC, mobile and enterprise businesses outside of China, helping balance the softening of the Chinese market.

It gained 68 percent of its total revenue from overseas business, up from 62 percent from the previous year.

Analysts said Chinese brands are increasingly gaining more revenue and market share not only in emerging markets but also from the developed markets.

Offering quality smartphone at a more affordable price, Huawei has successfully gained market share not only in emerging markets but also in Europe, while ZTE has also expanded its presence in the Android-based market in the United States.

Alibaba Group Holding Ltd has been aggressively investing in global growth with initiatives such as AliExpress, a platform to sell Chinese products to overseas customers, and establishment of a cloud-computing center in California.

"Western consumers used to view Chinese brands as makers of low-quality and cheaper items, but this perception has gradually changed as Chinese brands are coming up with more quality and value-added products under their own names," said Wang.

Wang said she was confident the Chinese brands will be better perceived on the global market in the same way as how the world came to see products made in Japan and South Korea.

According to the survey, 15 of the top 20 Chinese brands in terms of overseas revenue come mainly from three categories, including six from home appliances, five from airlines and four from technology.

With Chinese outbound travel growing 12 percent in 2015, according to the World Tourism Organization, increasing Chinese companies from the aviation sector are also seeing rising overseas revenue, with Spring Airlines Co Ltd, Air China Ltd and China Eastern Airlines Corp Ltd continuing to add international routes.

Half of the top 20 brands are market-driven and half are State-owned enterprises, mostly in the oil, gas and banking sectors.

The average proportion of overseas revenues of competitive SOEs is higher than the market driven ones, which suggests the government support still remains important for Chinese brands trying to gain a global presence.