Brand-building crucial for China's manufacturers

China is now the world's largest manufacturer. As the trade volume keeps expanding, lack of a proper brand strategy challenges the growth model.

China's foreign trade retains momentum.

However, as domestic labor and production costs keep rising, the world's largest exporter is worrying that its products may lose competitiveness.

Change is taking place as the pressure is mounting. And brand building is at the core.

Lily Zhang, General Manager of Sunwin Industry (USA), said, "We have long been doing OEM (Original Equipment Manufacturer) projects for others, but it proved to be very hard for sustainability today. The profit margin keeps shrinking. You must have your own brand, your own original design, then you can have an edge and survive."

Sunwin's branding strategy began in 2008 when the global financial crisis caused overseas demand to shrink.

Now the I-BABY clothing line has proved a success in the domestic market.

The overseas branding plan has just begun and the company says the promotion in the US is much more difficult.

Sunwin is not alone among Chinese manufacturers that are reshaping themselves.

Dong Yuejin, Chairman of Taotao US Inc., said, "Being an original equipment manufacturer, for no matter how long, you are working for the brand owners. The better your products are, the bigger the brand owners' business will grow. There is hardly anything for us to gain."

The scooter and All Terrain Vehicle maker was established in 1985. It took 21 years to sell its products under its own name, TAOTAO.

Overcoming the "Made in China" tag wasn't easy. Years later, efforts have paid off.

Data provided by a popular search engine shows that interest in TAOTAO has greatly increased over the past 3 years in the US. Its 2012 sales volume surpassed 80 million US dollars in the US and Canada.

Dong said,"Brand building needs continuous efforts. And I am confident that our brand TAOTAO will become even bigger."

In total, TAOTAO plans to invest 10 million US dollars for brand building in the coming two years.

For Chinese-made products, a cheap price tag is no longer the key to long-term success. Finding a better position in the world-wide trade flow which can generate common growth for partners is crucial for sustainability.