For years, American companies looked to China as a land of new opportunity. Now a new reality is settling in: The Chinese consumer isn’t about to save the day for Western brands.
“Now the quality is similar, so why not buy China?” said Gao Yang, 39, who works in home decoration, as he browsed in a Beijing mall. Once an avid buyer of Nike and Adidas products, Mr. Gao said he has switched exclusively to Li-Ning, a Beijing-based sportswear brand that has become fashionable in China. In a Hill+Knowlton Strategies survey in 1998, virtually no Chinese respondents said they thought Chinese brands were cool.
American brands now face two major challenges in a country that is increasingly a foe of the U.S. on matters of trade and geopolitics. One is that local Chinese brands are getting stronger. The other is that Chinese consumers are increasingly turning away from foreign brands because they have run afoul of Chinese politics. The result is that some American brands that used to be cool are falling out of fashion.