Chinese EV Brands' International Expansion in Europe : Transforming "Made in China" Image and Building its Global Brand Equity

If you were born in the 80s or the 90s you've had to come across the "Made In China" label. If you'd turn around basically anything, from your toy to any house appliance, positioned more or less prominent, somewhere there would be the stamp "Made in China".

Unfortunately for all of its manufactures that would willingly on unwillingly wore this label, most of the products coming out of China was not only dirt cheap, but also of poor quality. The image of "Made of China" label and associations tied to it became "cheap" and "poor quality". Most of what came out of China was simply a poor copy of Western brands. And there were some really funny knock-offs, both of brands and also of products. What was less funny, however, was that every now and then, Chinese toys would be found to contain toxic chemicals or its electronic products would go up in flames. So while not all the manufactures curbed the procedures, safety regulations and built their business around just price, rather than the quality, blanket image of "Made in China" meant that there was really no brands (just products and manufactures) you could trust let alone desire.

So while not all the manufactures curbed the procedures, safety regulations and built their business just around price, rather than the quality, blanket image of "Made in China" meant that there was really no brands you could trust let alone desire.

As a consumer, when you'd opt out for products from Chinese manufactures or go into Chinese stores, there was always an underlying expectation that it would : a) be cheap b) poor quality.

So while you'd opt out for some non-important items when you wanted to save money, you'd, for example never buy a Chinese car or fly a Chinese plane; or god forbid wear a Chinese fashion brand (especially as a teenager).

Premium look and feel, innovation and high quality was never associated with products coming out of China.

And with reason, given its underlying economic model was based on transfer of knowledge from Western companies who, in case they wanted access to Chinese consumers, usually had to set-up joint ventures. Many complained about IP rights, copyright infringement which didn't seem to bother nor central government not companies who competed on price and volume.

Premium look and feel, innovation and high quality was never associated with products coming out of China.

While this is the image that marked the entire generation in the 80, 90s and 2000s, the future generation of European consumers on one side and Chinese manufactures on the other, might have an entirely different relationship from 2020s and beyond.

Chinese EV Brands' International Expansion in Europe

For Europeans, perceptions of "Made in China" started to shift with consumer electronics products, specifically smartphones out of which Huawei and Xiaomi were among the first to crack the door open in Europe.

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They later to be followed with brands like Oppo, OnePlus, Vivo and most lately Honor, since they were competing in an established industry, led predominantly by Samsung and Apple, they were always just an economically effective alternativeto already established premium brands. While these brands were leading the market share in emerging markets, mostly because of their lower price points, they never managed to be(come) status symbols, trusted and coveted on the level of, for example, Apple products.

European consumers on one side and Chinese manufactures on the other, might have an entirely different relationship from 2020s and beyond

However, with Chinese EV brands, which are taking Europe (and rest of the world) by storm it might be a different game and much more favourable outcome when it comes to both their brand status and image of "Made in China".

For the past couple of years, Europe has seen a rapid incursion of Chinese EV brands. While most of them entered first Nordics as the most advanced EV market in Europe, they are making rapid gains across rest of the Western Europe.

Zeekr brand flagship Amsterdam experience center. Source : YouTube

NIO Experience Center Amsterdam. Source : MRDV, Ossip van Duivenbode

XPENG Centre Rotterdam, Source : xpeng-center .nl

Chinese EVs : New Generation of Chinese Brands Reaping The Benefits of New Category Establishment

While Tesla might have been the first mass-electric brand, due to its price and status it was reserved for super early adopters and affluent consumers. As European carmakers have legacy business to cater to, in a classic industry disruption story, challenger Chinese brands are swiping in and reaping the benefits of new category establishment.

This time, their go-to-market strategy is different. Innovative and high performing products, premium design, luxury look and feel and attractive pricing is paving the path for success. Most importantly, Chinese EV brands have an additional benefit of a new category which by default warrants mental availability and lenience towards new brands.

When a new category is being formed, however, all brands start with a clean slate in the eyes of the consumers. And, from the current standing, it is the Chinese brands which might define category expectations from EV vehicles today and in the future.

Namely, had Chinese brands tried to compete within the traditional, combustible engine car manufacturers and brands, it would have never had the potential for growth as brands have already been established - their manufacturing but most importantly brand superiority and equity would be impenetrable for challenger brands. Especially without significant investments.

When a new (sub)category is being formed, however, any challenger brands and any incumbent brands start with a clean slate in the eyes of the consumers. And, from the current standing, it is the Chinese brands which might define category expectations from EV vehicles today and in the future in Europe and beyond.

Unlike smartphones, even as a non-user you are exposed to the Chinese brands as you start seeing then and noticing them around you.

Chinese brands currently have supremacy across all elements of their go-to-market model. Most importantly, for the first time, Chinese brands are leveraging brand elements which go beyond the product and price : brand experience. Their products are bravely designed, carry futuristic innovation, they feel and look premium, they have superior performance of battery life and range and have very competitive prices - those that may make them a mass success.

Redefinition of "Made in China" by Chinese EV Brands in Europe

While we do read about innovation in China, even being more in future when it comes to digital technology consumer brands like WeChat, Tmall, AliPay etc, these were out of reach for an average European consumer. Smartphones, even thought they might be au-pair on the level of functionality, didn't really bring anything new to the game. And smartphones, per se, are individual - private. Its not like you're going to be exposed to them as a non-user.

And as a first, because of their bold design, but also premium presentation you start developing not only favourable, but also aspirational attitudes.

With Chinese EVs it's a bit of a different game. While they're still cars, they are markedly different. You can see the difference in design both inside and outside. And most importantly this bold design and innovation is matched perfectly with innovation expectations consumer would have a from an innovative category like electric vehicles.

Moreover, unlike smartphones, even as a non-user you are exposed to the Chinese brands as you start seeing then and noticing them around you. And as a first, because of their bold design, but also in case of more upper class, premium brands like Nio and Zeekr, and their go-to-market which includes not only premium design but also premium presentation you start developing not only favorable, but also aspirational attitudes. A first for Chinese brands.

Chinese EV Brands' Expansion in Europe and Global Brand Equity Building of "Made in China"

Because of their bold design, but also their go-to-market which includes not only premium look and feel but also premium presentation and experience you start developing not only favorable, but also aspirational attitudes

While Chinese brands became serious players, if not leaders, in other categories like smartphones in emerging markets, their presence or market share hasn't earned them a status of being coveted for. Western Europe and US markets as most lucrative, but also deterministic for global brand status and globalisation ambitions have stayed out of reach.

Europe and especially Western Europe is a crucial stepping stone in global brand equity building and Chinese EV brand globalisation status. European consumers are strongly influenced by US culture and in case Chinese brands create a strong foothold in European continent, known for its automaker brands, this will prove that they have capability for global brand status.

Europe and especially Western Europe is a crucial stepping stone in global brand equity building and Chinese EV brand globalisation status.

Customer based brand equity occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favourable and unique brand associations in memory. Chinese EV brands are the first that are on the path of building those and should they continue, it will set groundwork for brand equity building of the "Made in China" label for the new generation of global customers.

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