Aspirational or antagonistic?
That is the question facing American brands in China in the wake of Donald Trump’s election as president. Beyond big-picture questions of international relations and trade between China and the U.S., Trump’s victory has raised concerns about the perception of America in China, specifically among Chinese consumers.
Though Tom Doctoroff, chief executive officer of Tom Doctoroff Consulting LLC, sees Trump’s election impacting the perception of America among Chinese and what the U.S. connotes, he doesn’t necessarily see that impacting American brands, which haven’t traditionally played up their “American-ness” in marketing to Chinese consumers.
“They always have believed that our political institutions were robust enough to ensure our economic progress was fairly smooth. This is the first time they will see America in chaos, something Chinese don’t associate with America,” said Doctoroff, who has written several books about China, including “What Chinese Want: Culture, Communism and China’s Consumer.”
“What is clear is that the Chinese have never wanted to say, ‘I’m wearing or driving an American brand’ per se,” he continued. “It’s not like it’s associated with anything, other than individualism. Even Levi’s is a global brand as much as it is an American brand. I think, unlike Dior or Louis Vuitton, with their French style, America has never been a selling point. Marketers won’t have to shift their strategy because there isn’t [an America-focused] strategy to shift.”
In terms of how Trump’s anti-China rhetoric throughout his campaign may have insulted Chinese consumers, and the potential this might have for impacting their desire for American brands, Doctoroff said we will have to see whether Trump the president is the same beast as Trump the candidate before judging the potential for harm.
“It all depends on whether Trump is able to evolve in his role. If he continues as president in the manner that he was as candidate, then all bets are off in terms of how people are going to perceive American brands,” he said.
According to Benjamin Cavender, a senior analyst at China Market Research Group, there are mixed feelings about Trump from the Chinese population at the moment, with some resenting his tough talk on trade and others believing his candor and outspokenness may make him an “easier” president for the country to work with.
The impact on American brands depends on how the president-elect conducts himself once he enters office in 2017.
“Initially, I don’t think it’s going to make much difference in terms of how Chinese consumers perceive America or American products but if anti-China rhetoric continues or is amplified, then I could see it having a negative effect on buying decisions. The first 100 days of Trump’s presidency will be telling,” Cavender said.
There are also lessons to be learned in terms of how antagonizing China and the Chinese government can impact consumer attitudes to buying brands from certain countries, said Mark Tanner, managing director of Shanghai-based China Skinny, a marketing and research agency. He pointed to anti-Japanese sentiment felt in China in 2012, which led Japanese carmakers, as well as fast-fashion giant Uniqlo and beauty group Shiseido to de-emphasize their Japanese heritage in China.
“There’s a risk that if Trump goes on too much of an anti-China rampage it could get the Chinese government propaganda machine in full motion, which won’t do American brands any favors,” Tanner said, though he added that some anti-American sentiment is already present in the Chinese market.
“There’s always been this rhetoric coming out of America and when you have two superpowers that are a little insecure about their relevant positions, that’s going to happen,” he said.
The problem for American brands is the influence the Chinese government has on the country’s media organs and, therefore, public opinion. In recent years, American companies such as Apple and Nike have fallen victim to poor publicity after being portrayed as having treated Chinese consumers poorly on a popular consumer affairs TV program on the state-run broadcaster, CCTV.
On the upside, according to Tanner, any anti-American consumer sentiment that stems from Trump’s election is likely to be short lived.
“Look at Japan now — Chinese consumers can’t get enough Japanese toilet seats, rice cookers, all that stuff,” he said.
Chinese consumers also have been flocking to Japan to shop for fashion and luxury goods. Hurun Research Institute, publisher of the Hurun Rich List covering China’s high-net-worth individuals, has released reports that include information about attitudes toward immigration, investment and travel to the U.S.
The institute’s chairman and chief researcher Rupert Hoogewerf doesn’t expect the perception of America as the top choice for immigration among rich Chinese to shift, and points out that the U.S. is eclipsed by other destinations for international travel, though he expects the nation to continue to appeal at its current level regardless of Trump’s presidency.
“America’s number one when it comes to buying property, immigrating and doing investments, there’s no question. But when it comes to travel, America falls down the rankings compared to European countries and Australia — they are the big destinations. America as a travel destination scrapes into the top 10 for China’s high-net-worth individuals. We haven’t heard any indication that it’s going to get better or worse,” Hoogewerf said.
The biggest impact a Trump presidency could have on the perception of the U.S. among wealthy Chinese consumers looking to travel, live and spend overseas would be felt if it were to result in a sharp downturn or significant instability in the world’s largest economy, Hoogewerf said.
“Why is everybody so interested in America? Because the U.S. economy is strong and the U.S. dollar is strong. I think if those two fundamentals were to change, the whole position of the U.S. as a destination of choice would also change.”