Chinese Suppliers Struggle to Build Brands

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Many Chinese lubricant suppliers spend considerable time trying to figure out how to develop a successful brand in the country’s highly homogeneous market. According to speakers at a recent industry forum in Xian, there are few shortcuts to accomplishing that goal, as effective strategies require time and resources.

Ogistar Research and Development Director Zhang Yueyi was one of several industry insiders to address the topic at the mid-December Lube Industry Branding and Marketing Forum, hosted by local consulting firm Muchengyou. Ogistar is the lubricant arm of Liaocheng, Shandong province-based chemical manufacturer GTS Group, and Zhang joined the company after decades as a senior engineer with China Air Force Institute of Oil Production, a military body focusing on jet fuel studies. He contended that Chinese companies lack sophisticated technical marketing.

Zhang said it is important now for lubricant marketing to have a technical basis, especially for industrial products, because many industries are using new types of equipment or equipment with new functions. Lube suppliers aspiring for sustainable growth are almost required to learn about new types of equipment and to make products that protects them.

As an example, Zhang cited boring machines. Modern boring machines use more accurate hydraulic systems than earlier ones, and those systems require super clean hydraulic oil to minimize friction. In China, where subway lines are being built in nearly every big city, boring machines are in demand, creating an opportunity for lube blenders as well as additives manufacturers.

Another example are robots used in sewage treatment facilities. The robots operate in a humid environment contaminated by oily substances. In this case, special lubricant products with properties that include water- and wear-resistance are required to ensure stable performances, said Zhang.

Zhang said Chinese companies should also learn from the example of multinationals like German lubricant marketer Fuchs Petrolub, which takes product design seriously.

You have to design your products carefully, in accordance with the clients you serve, he said. Think about how to help your clients lower costs by offering products that keep their machines reliable and durable.

Many Chinese manufacturing companies rely on imported lubes to take care of their costly imported machines, such as chain oils from Spanish blender Brugarolas for machines used in the textile industry. Zhang said that developing products to replace imported oils represents an opportunity for Chinese lubricant suppliers, but that it is challenging.

Chinese manufacturers are reluctant to change oils as they have little trust in Chinese lube brands. To win their trust, it might take a lot of time, Zhang said.

Developing a new product takes time, wining trust takes time, and so does branding. Among thousands of Chinese private lube brands, consumers may recognize only several of them, such as Lopal and Tongyi. Their suppliers took a decade to build recognition for them.

Even with the help of social media, it’s still expensive to do branding, and for many private companies, this spending is an investment mostly without quick returns, said Zhang Chenhui, a retired senior engineer and former general manager at Sinopecs facility in Maoming, Guangdong province, explaining why there are few private companies in China with strong lube brands.

He said some companies prefer investing heavily in advertising to growing a loyal and talented team. And this, he said, is one of the major differences from big companies like his former employer.

As far as I know, big companies all have talent cultivation programs because they know real talent is rare among potential hires, Zhang said, urging private companies to allocate their limited funds wisely.

Gleaning from his experiences in a major state-owned company and private companies, Zhang said that access to new technologies is the main thing that private companies lack.

What is the new development of motor engines? Whats new in additives? Are there any new industrial policies in the United States or European Union? Private companies know little about these things, which are closely related to product development, Zhang said.

Because most sources of technical information are written in English and cannot be found using Chinese search engines, Zhang suggested companies should invest in hiring young, English-speaking graduates.

These young people can read English and are generally internet-savvy. They know where to look to get the information, and they learn fast enough to bring changes to your businesses, Zhang added.

Photo: Lube Report Asia / Joe Beeton

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