China, Brands, And Black Swans

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 |  Includes: FXI, PGJ
by: David Wolf

In my recent Op/Ed in AdAge Magazine, I explained why China was going through its most disruptive changes in three decades, and that this slow-motion change has largely been missed by many in the mainstream media.

But for me, the crux of the issue is this: just as China is going through all of these changes, we are giving Chinese policymakers and consumers reasons to doubt their long-held faith in Western institutions, and corporate brands are every bit as succeptible as “Brand America” or “Brand Europe.”

A commentator on the piece correctly pointed out that the Chinese are hardly abandoning foreign brands, and I agree. It would be overstating the case to suggest that, given the choice, Chinese consumers would rather drive a Geely than a Mercedes, wear Li-Ning instead of Nike (NYSE:NKE), or even Changhong over Sony (NYSE:SNE).

Unfortunately, I think as marketers and marketeers we tend to focus a bit to much on past performance and the current situation, and draw straight lines into the future, when we really don’t have that luxury. How much better to anticipate the emergence of strong local competitors and use that as an impetus to raise the level of our game than to wait for their arrival and scramble to deal with them then? And how much wiser to expect the disruption of our market position by entropy, disruption, or “black swan” events than to be surprised or defeated by them?

Too much of what passes for planning in our business is little more than glorified scheduling. Enough of that, especially here in China: it is time to don our binoculars, scan the horizon, and reclaim the future of our companies and our clients.