In China, Pabst Blue Ribbon is Pure Gold

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Another post from Ruchika Tulshyan:

Recession got you down? There’s a new way to reach a 1.3 billion-strong market. Rebrand your run-of-the-mill American product, launch a “luxury” ad campaign and sell it in China for 20 times what you sell it for in the U.S.

Don’t trust me? Pabst Blue Ribbon did it. The PBR beer that has hipsters paying $2 for a can was re-marketed and retails for a $44 bottle called “Blue Ribbon 1844” in China. Pabst Brewing Company insists the beer is a special brew only for China, different in taste from what they sell here. Even if that’s the case, it’s like Walmart trying to sell luxury bags at Louis Vuitton prices.

But that’s the genius of marketing abroad. You can wipe the slate clean and reposition yourself to be whatever you want to be. Ailing giant General Motors found their Chinese savior in Buick. GM capitalized on being perceived as a “big, strong American car” in China, and their Buick LaCrosse model is “the fastest-growing member of China’s premium upper-medium sedan segment,” according to GM. Two days ago they announced that they passed the 100,000 sales milestone, after less than a year of launching the sedan in China. GM caught on to the trend early – 1999 – and by 2006, became the best-selling foreign automaker in China.

I spoke to Scott Galloway, founder of Luxury Lab, a think tank for prestige brands. He said scaling up when selling overseas is nothing new – think of Heineken, an ordinary beer in the Netherlands, but a premium one here. What makes China unique is that American brands manufacture their products in China, but then attach a foreign tag to market them at a higher price. Galloway agrees, “there’s a mystery associated with foreign brands.”

Coach was part of the “aspirational” luxury market that doubled its revenues between 1998-2008. China was a key market for the brand, where they marketed themselves as “high-end” and sold products at a hefty premium. And the best part of it? The majority of items were made in China, so consumers weren’t even paying more for a “Made in America” label. It’s a win-win situation in terms of costs too.

What’s more, China’s particularly brand-conscious society is spending. A Euromonitor study estimates 31.7 percent of total households in China will have an annual disposable income of US$5,000-$15,000 this year—which is a decent amount for China. “China is where the action is. In five years, they will have more millionaire and billionaires than any other country,” says Galloway.

Only one concern remains – what if brands start to flow in reverse? China Mobile has ten times more mobile subscribers than any US mobile company, and Google’s 20 percent market share in China is far outweighed by the 70 percent share of local brand Baidu.  If Chinese brands start to market here, well that’s a whole another story. For now, retailers, it may be time to go East. If you haven’t already.

1 comments
RichardBasildonUK
RichardBasildonUK

I made fortune selling Versace clothes in china. Of course I paid bribe for the local police first in a town with around 60.000 people + other surrounding smaller towns and villages, all together about 120.000 potential clients. I opened completly fake illegal Versace store which looked like oruginal, even a lot of inside store furniture add ons and so on were bought in real genuine Versace Home online store,  and I made up a story about being Italian and all clothes had stiched labes telling: made in italy. To be honest they were bought in China itself, label;s removed, made in italy stiched. Clothes had bad quality but stupid asians were buing it anyway, few times they try to argue about quality and genuine or not problem. Then I were calling local police who were protecting me from such a situations and people, they were paid by me to do so. So yeah guys ... China is a land of opurtunity as you can see. The shop is still running but by my ex partner (hot little china woman) Now I rebranded and I offering fake USA visas in a town of X (I can not write it) I offering usa visas for the purest china people who want to leave country and start normal live in modern country. I made up a story that I'm a secret service officer in US ambassy in China and I and my friend from ambassy can offer real US visas, to be accurate Green Cards, for only 5.000$. You cant imagine guys how many stupid naive china man and woman fall in to this trap, all they get after payment is visit of the local police officer (paid by me and corrupted). Police man say to them this: we cought the guy who sell to you visa. We know everything. We still do not want him to be cought yet because we want more evidences against him. Then they are forced to sign a faked "secret" paperwork. They sign that they will never tell about it, they will never contact him again and they know that if they will dot obey to this rule they will be sentenced to death together with family as a traitors, their families will be considered as enemies of the Peoples Republic of China and their bodies will remain in unknown place. So those idiots fall for it and we alll can earn a lot of money :)