A latest investigation shows that customers still choose Nippon and Dulux as their first choice, while domestic brands are mentioned rarely. Compared to foreign coatings corporations, what are the deficiencies of Chinese corporations?

1. Lacking of technology outlay
    “Although our commercial coatings have obvious distances from foreign coatings, the technology of our architectural coatings is similar as foreign coatings. Therefore, the coat and profit are the main reasons of our mediate and low grade products.”

    Since the technology content of architectural coatings is not too high and the product risk is not large, Chinese coatings companies have the ability to produce high-grade products. However, the limitation of cost, profit and R & D outlay restricts Chinese corporations’ production of high-grade coatings. It is known that in our paint & coatings industry, the annual outlay of R & D is less than 1% of sales value, lower than Korea (2.5%) and much lower than developed countries (>5%).

2. Small scale of coatings corporations
    There are about 8 000 coatings corporations in China, but no one can enter the top 50 corporations all over the world. The big corporations with annual output of 5 000 t are less than 3%, and most products are low grade products. In addition, a Chinese coatings corporation sometimes have many brands, which means the separate of capital and strength.

    However, the foreign brands are centralized and have high reputation and competition. They also pay much attention to the protection, utilization and exploitation of their brands. In a963, the USA has 1 800 coatings companies, with annual output of 3.54 million tons. In 1994. the number of coatings companies reduced to 800, while the annual output increased to 4.90 million tons. Since 1980s, 25~35 coatings companies are being consolidated annually in the USA. It is estimated that in 2005, Nippon will take up 19% of Chinese coatings market.

3. Incorrect orientation
    In late 1990s, our domestic coatings corporations imitated foreign corporations to build their own brands. Because of the great success of Nippon in China market, many Chinese corporations build similar brands, which was brand mistake.

    Actually, the key value of brand is orientation. With correct orientation, the corporation could differentiate its own brand from other competitors and accumulate its own value. At present, Chinese coatings corporations are fond of imitating foreign brands without their own brands, which waste lot of manpower and materials.

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