There were two interesting announcements today that point to trends in the marketing world and both originate in China. Tsingtao Beer profits and sales are way up, due to increased consumption of brew in China and Chinese car companies like Great Wall Motor and Cherry Automobile Co. are growing faster than expected — and not just because they are selling to a new, emerging class of Chinese with disposable income. It’s because other developing countries, such as those in Africa, are finding value in Chinese automobiles. A new car in Africa doesn’t have 10 airbags or new age catalytic converters (not that there’s anything wrong with them), so their prices are lower and they’re outselling US and European brands. China is growing, consuming and growing smart.
I was driving around Puerto Rico a couple of months ago and was amazed at the number of Suzuki cars on the road. They outnumbered other brands 4 to 1. Now Suzuki’s aren’t Chinese, but they are a value brand and though the Puerto Rican economy has been dinged lately, by and large it’s doing okay. Many of these Suzukis were new. Clearly, Puerto Ricans want value. And the leading local beer in Puerto Rico, by the way, is Medalla. Why does it lead the market? It tastes good and costs less.
As China goes on line (not online) with more and more low wage jobs pushing out mass-produced products of value, we need to carefully watch the lower end of our market. We have only scratched the surface of what’s to come from China and other foreign-based value brand marketers. If you want a case to study, check out the growth of the Hyundai automobile brand in the U.S.