It was an Indonesian taxi company called Steady-safe that sent into liquidation the Hong Kong-based Peregrine, one of the largest investment banks in Asia. The collapsing value of the Indonesian currency crippled the taxi company's ability to honour its debt of about US$300m.
The irony of the company's name was seized upon by the media and confirmed the prejudice of several Western financiers. "Some Asian names are so over-the-top that they simply put me off ?I can't take them seriously enough to take the trouble to learn about their business in order to recommend them to my clients," says Mr David Sullivan, director of institutional sales at Vickers Ballas, the Singaporean stockbroker in the UK.
Inappropriate company or product names are a genuine worry for those Chinese companies endeavouring to build a presence in the global market. The world is inundated with goods made in China, yet very few internationally recognised Chinese company names have emerged ?with the exception perhaps of Tsingtao Beer.
Spreading the word
International brand recognition of Chinese names is important now that more companies are raising capital abroad or exploring overseas markets to make up for sluggish home demand. Almost two decades have passed since the start of China's open door policy but Chinese enterprises are only just waking up to the realities of competing in the world market. The number of such companies is not yet large, says Mr Alex Abplanalp of Zenith Media in Hong Kong: "Most are still investing heavily behind brands in the mainland."
However there is a growing desire, held by industrialists and government leaders, to see China's emergence as a major global economy matched by its capacity 'to sell products under its own brand name rather than just making them for other people.
Ms Sally Lazarus, chief executive of Ogilvy & Mather, is in no doubt about the significance of what is taking place. "Professionalising the Chinese brand within China is the first step towards what I believe will be one of the most significant events in global markets in the next 20 years ?the emergence of China as an exporter of branded products as opposed to mere commodities," she says.
The first major problem when introducing a Chinese name abroad is one of unfamiliarity ?or, even worse, down-right hostility. "Names which sound silly to the Western ear are certainly the first major block to brand recognition," adds Sullivan. "Then there are others which make perfect sense in Chinese but may sound unfortunate to us Westerners, as in the case of Stone Electronic." This is a well-respected company but an inert object like a stone hardly has the dynamic connotations one would wish for in the fast-moving world of computers. It is also a headline writer's dream when the share price falls, as Stone Electronic's did after it announced poor annual results in 1995.
Mr Wu Dehua, Financial Controller of Shanghai Diesel Engine, believes that most Chinese entrepreneurs recognise the importance of brand appeal. But names pose a problem because of cultural differences and English translation.
"Those who aim at the world market, including ourselves, see the issue as a serious challenge," he says. A small portion of his company's goods are exported overseas under the brand name of Dong Feng, meaning 'east wind'.
"When we promote ourselves over-seas, which name has better appeal, Shanghai Diesel Engine or Dong Feng? Which one is more suitable for our company as the country's number one diesel engine producer? We don't know. We don't have marketing expertise in the international market."
Some companies are closer to realising their global ambitions. Haier Group, led by its charismatic president Zhang Ruimin, is already one of the world's top 10 refrigerator manufacturers. Although still dwarfed by leading names from Japan and Germany, Haier is now manufacturing in eastern Europe and South America with the view, ultimately, of selling two-thirds of its goods abroad. Its name is also becoming better known internationally, thanks to a successful public relations campaign.
Other Chinese companies have been investing in promoting awareness through advertising. Hairun is launching China's first-ever advertising company in Los Angeles, hoping to help introducesome Chinese brand name to the US market as well as bringing more US goods to China, according to the company's chairman Mr Liu Yanming. Its first assignment will be for shampoo made by Chongqing Olive Cosmetics Company, one of China's largest manufacturers of daily-use chemicals.
International advertising groups are also picking up business. Pharmaceuticals group Taita has a market ?leading health tonic product, for which it can partly thank Bates Advertising. Guangdong Kelon, originally a small township factory and now a major refrigerator manufacturer, is another example.
In late 1996, Guangdong Kelon signed a contract worth US$12m with Leo Burnett, the international advertising agency, to help launch a focused advertising campaign. To better position itself, the company recently announced that it was to relocate its management head-quarters to Hong Kong and research and development centre to Japan.
The company currently does not have the budget to launch a full-scale overseas campaign, but it is using Hong Kong as a hub from which it can expand in future. However the management already has first-hand experience of international anonymity ?visiting London in 1996, for example, to raise funds for its ambitious expansion plans.
"In the case of Kelon, I was not at all familiar with the name despite their claim to being the largest refrigerator producer in China," says Mr John Li, a Beijing-born fund manager at Framlington. Li noted that not even Chinese financiers in London were aware of the company name. "It probably made the management realise the importance of brand awareness in the world market," he says.
All these companies face the same problem of having emerged from a planned economy where brand names, if important at all, were only relevant in the domestic market. Now they face foreign competition on their doorstep in the form of imported goods, joint ventures and foreign-owned enterprises in China.
Indeed, the profound changes which have taken place in China over the past 20 years will help equip these dynamic Chinese companies with the ability to compete on the world stage. One year ago Ogilvy & Mather conducted a survey of young Chinese consumers which revealed that they are as advertising sophisticated as any of their Asian counterparts, and highly aware of the differences between brand positionings. If a brand can succeed in China, there's no reason wht it can't anywhere else.