While building a trustworthy brand outside their home market has always been a tough task for Chinese companies, it has become more challenging because of the ongoing travails of Huawei Technologies.
The global market’s perception of Chinese brands, which was already poor, has become progressively worse because of the troubles of telecommunications equipment manufacturer Huawei, according to a new survey by US-based communications marketing firm Edelman published by msn news on its website.
“The Huawei factor is significant” in the diminishing trust “in brand China”, said Edelman president and chief executive Richard Edelman at an event in New York, according to a Forbes report.
He cited new data gathered from the “Edelman Trust Barometer” survey last month, in which the Huawei issue had further eroded trust in Chinese brands by “five or six points”.
Edelman’s earlier survey between October and November last year found that the average trust level of respondents for Chinese companies was 40 percent, compared with 70 percent for German, Swiss and Canadian firms. This survey, which polled more than 33,000 respondents in 27 countries and territories, considers as ‘distrust’ a score below 50 percent.
“I strongly suggest that this is a problem that Chinese companies whether state-owned or publicly held must address as a matter of deep priority,” Edelman said.
A spokesman for Huawei did not comment on the Edelman survey.
Edelman representatives in Hong Kong confirmed the October survey, but did not immediately send an update on the March poll.
The survey results have come as Huawei, the world’s largest telecoms gear supplier, wages a public relations battle against Washington’s efforts to block the international deployment of its 5G mobile equipment because of security concerns, which the Chinese company has strenuously and repeatedly denied.
Shenzhen-based Huawei and chief financial officer Sabrina Meng Wanzhou – the daughter of company founder and chief executive Ren Zhengfei – face nearly two dozen charges brought by the US government, which has accused her of financial fraud and violation of trade sanctions against Iran. Huawei has denied these charges.
Despite Washington’s campaign to get the Chinese company’s equipment banned, Ren thanked the US for “promoting” Huawei in an interview with American broadcaster CBS in February. He also referred to Trump administration officials as “great figures” who have helped grow awareness of 5G mobile technology.
“5G was not known by common people. But now, these great figures are all talking about 5G … And we’re becoming more influential and getting more contracts,” Ren said.
Lu Shaye, China’s Ambassador to Canada, echoed Ren’s sentiments in an op-ed published in the same month by Ottawa-based weekly newspaper The Hill Times. “The general public did not know about Huawei’s leading expertise in 5G technology, but thanks to the US hype it's now known to the world,” Lu wrote.
To be sure, Huawei’s brand is not seen as a negative in other polls. The company topped a list of the strongest Chinese brands overseas in 2018, according to a report published last week by UK public relations company WPP and research firm Kantar. Their survey estimated a 22 per cent increase for Huawei in the metric for brand equity, which refers to the tendency of consumers to choose a brand.
Smartphones from Huawei, the world’s third biggest supplier behind Samsung Electronics and Apple, were recognised for being better in function and design, as well as more popular than those of other major Chinese handset brands, according to the WPP-Kantar report.
Privately-held Huawei has also signed more than 30 commercial 5G network equipment contracts, according to 5G product line president Yang Chaobin on March 7, when the company filed a lawsuit against the US government in a bid to overturn a federal ban on its equipment.
Edelman, however, sees more room for Chinese companies to improve how they are perceived by consumers.
“They’ve got to have better governance,” Edelman said. “They’ve got to have much more kind of public-facing versions of themselves.”