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From Hongda to Wumart, China brand names have familiar ring
Thursday, October 19, 2006

By Gordon Fairclough, The Wall Street Journal

SHANGHAI -- When executives at Shanghai Automotive Industry Corp. failed in their bid to buy the celebrated Rover brand name for a line of cars they are rolling out this month, they quickly switched to Plan B: Call the new autos Roewe, instead.

Roewe, which Shanghai Automotive suggests should be pronounced "roe-wee," is the latest in a series of Chinese brands that bear a striking resemblance to foreign trade names.

In some cases, names are drawing ire from multinational companies.

Branding is in its infancy in China. Few Chinese companies have experience developing international brands -- something that has become a corporate obsession in the West, spawning a huge industry of consultants who help pick names and logos and build images.

Many Chinese companies "feel safer following someone who's established rather than striking out on their own" in terms of branding, says David Wolf, CEO of Wolf Group Asia, a consultancy in Beijing. "There seems to be an institutional lack of confidence."

China also has less of a history of respecting trademarks. Chinese firms often borrow names or mimic those of Chinese and foreign brands.

But that is changing, branding experts say, as Chinese companies -- such as computer maker Lenovo Group Ltd. and appliance manufacturer Qingdao Haier Co. -- that have global ambitions ready themselves to compete in international markets.

More-aggressive legal action by companies against Chinese copycats could also encourage more originality. Starbucks Corp. last year won a lawsuit against a coffee-shop chain whose Chinese name is identical to that of Starbucks. Honda Motor Co. won a case last year against a big motorcycle maker using the name Hongda; the motorcycle maker now uses Lifan, from its corporate name Chongqing Lifan Industry Group Co., as its brand name.

International auto-industry executives have long looked askance at the name of Chery Automobile Co., whose English name is similar to General Motor Corp.'s legendary Chevy brand. GM sued Chery, alleging that the company had copied the design of its compact Chevy Spark.

The two companies reached a settlement last year, terms of which haven't been disclosed. But Visionary Vehicles LLC, a U.S. company aiming to bring Chery-built cars to the U.S., says it won't use the Chery brand name in the U.S. Chery continues to use the brand name in China.

Chery's English name is based on the sound of its Chinese name, Qirui, pronounced "che-RAY," which means, roughly, "unusually lucky" and sounds nothing like the Chinese name for Chevrolet, Xuefolan.

Wumart Stores Inc., a fast-growing Chinese retail chain, has also raised some eyebrows with its name, which some have confused with Wal-Mart Stores Inc. Nikita Huang, a Wal-Mart spokeswoman in China, says the company "doesn't have much concern. We believe consumers know the difference." Wumart says its English name is based on its Chinese name, Wu Mei, which means "beautiful products."

In some cases, companies do appear to be trying to piggyback on the image and name recognition of famous brands. When cellphone company China United Telecommunications Co. launched a wireless email service in April, it dubbed it "Redberry."

China Unicom said in a news release at the time that the name would "extend the image and name of 'BlackBerry' that people are already familiar with." China Unicom has since deleted that explanation from its Web site. The company declined to comment.

Research in Motion Ltd. of Canada declined to comment on China Unicom's name. The company's BlackBerry service in China is available through China Mobile Communications Corp., a competitor of China Unicom.

Chinese Internet company Inc. also seems to be banking on name recognition -- at least in English -- for some of its new offerings such as Baidupedia, a reader-edited encyclopedia that mimics Wikipedia, and Baidu Space, which allows users to create personal home pages like MySpace.

In the Starbucks case, the local coffee chain, whose Chinese name is identical to that of Starbucks -- Xingbake -- has appealed, and its business continues to operate under the same name and use a circular green logo that echoes that of Starbucks.

The Chinese company, Shanghai Xingbake Cafe Corp., says its brand name was the brainchild of its chairwoman, who was inspired by the character Simba in Disney's "The Lion King." Simba is transliterated in Chinese as Xinba. But the company's name uses the same characters as Starbucks, not the characters used to write Xinba.

Eden Woon, a Starbucks spokesman, said the company is "confident that it will win the appeal."

Many Chinese executives "don't think a lot about intellectual property rights," says Chris Reitermann, managing director of Ogilvy & Mather Advertising in Beijing. But, usually, he says, there isn't ill intent, just inexperience and lack of originality.

"A lot of Chinese companies don't put much effort into the name they choose," Mr. Reitermann says. "There's not a lot of thought behind it." Mr. Reitermann says there was once a Chinese car model that took the same name as Ogilvy does in Chinese. "We were flattered," he says.

Chinese companies can also be reluctant to pay for brand-consulting services. Branding isn't a top concern for companies, which are focused on absorbing new technologies and mastering production techniques as they do business in a rapidly growing domestic market.

That is changing, however, as Chinese consumers become more sophisticated and as Chinese companies increasingly look to sell their products outside China. "The appetite among consumers for brands is growing faster than corporate awareness," he says.

Shanghai Automotive had been hoping to use the Rover brand name for its new line of vehicles, the first models of which are based on designs for the Rover 75, which the company acquired from the now-defunct MG Rover Group Ltd. of Britain.

Shanghai Automotive, whose partnerships with General Motors Corp. and Volkswagen AG make it the largest passenger-car maker in China, is devoting significant resources to the new car project, with plans to invest more than $1 billion over the next four years.

Last month, however, Shanghai Automotive failed in its bid to buy the Rover name from BMW AG when Ford Motor Co., which now makes Land Rovers, exercised its right of first refusal and bought the name instead.

A Shanghai Automotive spokesperson said the company hired local consultants with experience at an "international firm" to help it choose a new brand name.

The English name that was chosen, Roewe, is based on the German word for lion, loewe, which is pronounced "LUR-veh." The name "obviously wasn't meant" to be similar to Rover, the spokesperson says.

The spokesperson says the company changed the "L" to an "R" to avoid duplicating the name of Spanish luxury-goods company Loewe SA.

The brand's Chinese name is Rong Wei, which means, loosely, "glorious power." The name is not at all similar to the name Ford uses for Land Rover in China. But it is close to the name of a Buick model produced by Shanghai Automotive's venture with GM, the Rong Yu.

GM said the similarity between the names is "coincidental" and that GM "is not concerned about this similarity." Ford declined to comment.

The Shanghai Automotive spokesperson also questioned the amount of attention being paid to the name. "The most important thing is not the brand name itself. The real thing is the product and its quality," the spokesperson said.

Still, a number of branding consultants say the company would probably need to come up with another brand before it proceeds with plans to sell the car overseas. Shanghai Automotive has said it plans to begin selling the vehicles in the United Kingdom by the end of next year.

The Shanghai Automotive representative said it has "not been confirmed yet" whether the company will use the Roewe name overseas.

In the Chinese market, Shanghai Automotive is touting the Roewe by stressing its Chinese origins. One print ad appearing now has a series of pictures of inventions -- the compass, gunpowder, paper and printing type -- ending with the logo for the new car.

"We used to propel the world with technology," the ad says. "Now the technologies of the modern world are harnessed by us."


(Andrew Batson in Beijing and Willy Wu in Shanghai contributed to this article.)
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