No shortage of Chinese consumers have a well-established desire to consume luxury goods. This was clearly demonstrated in the $21 billion that Chinese netizens, alone, spent on such products in 2019, amounting to 35 percent of global luxury spending (a figure that is expected to reach 50 percent by 2025, per Bain & Co.), and 90 percent of the growth in the personal luxury goods market for the year. Since China’s luxury market “has yet to develop the widespread sophistication necessary to sustain demand for [homegrown] brands,” as McKinsey put it, the vast majority of those purchases were of Western luxury goods – from Hermès, Louis Vuitton and Chanel bags to Patek Philippe and Rolex watches and Mercedes and Porsche cars, just to name a few.
Many of these brands have a strong-hold on the wallets of Chinese consumers and the Asian Pacific market more generally, thanks in large part to their world-famous reputations for luxury, and yet, success in this market is hardly a sure-fire win for non-native entities. In fact, brands are likely to be underserved if they do not adapt specifically to the Asian market – in terms of the products, themselves, and their marketing of those goods. And beyond that, brands need to be strategic about the names and other trademarks that they use.
While brands may be able to engage in seamless experiences in many non-native markets by using their English language names, this is not a practice that is applicable across the board, and certainly does not translate neatly to the important Chinese market, as even though figures of English-learners in China can reach up to 300 million, according to some reports, most statistics about actual English speakers in the country put the number closer to 50 million, which is less than 3 percent of the population. That is a significant statistic for brands.
With such striking figures in mind, and given that many foreign companies still fail to shake the idea of a “global language” and thus, do not realize that English is not the best approach to target most Chinese consumers, HFG Law & Intellectual Property’s Daniel Escudero asserts that brand owners should be reminded of the importance of adopting – and protecting – Chinese language versions of their brand names. “This approach is not only effective from a consumer standpoint,” he says that it will also help companies “to protect and reinforce the strength of their trademarks and broader brand awareness in the market,” he says.
Aside from serving as an essential part of any marketing activity in China, it is also important for companies to adopt – and consistently use – a Chinese-language name because if they fail to select and secure such names, it can result in a host of negative consequences. “Most common is the phenomenon of registration piracy,” which refers to instances in which an unaffiliated third-party (or third parties) register a brand’s name, often in an attempt to use it to piggyback on the established appeal/reputation of that brand without its authorization or as part of a plan to hold the trademark registration for ransom and extract a settlement from the brand owner, thereby, resulting in many cases in expensive disputes and/or litigation for the bona fide brand owner.
Beyond that, there is the risk that if brands do not select Chinese names for themselves, consumers will inevitably do it for them, and will use the name(s) they choose when they refer to the company and its products, potentially resulting in names that companies do not approve of. It is not uncommon for “Chinese netizens to collectively assign a Chinese name if a brand becomes popular enough” and lacks a specified Chinese name, Schwegman Lundberg & Woessner’s Aaron Wininger tells TFL. This can prove to be problematic, he contends, if the consumer-chosen name is not on-brand, so to speak, and “does not carry the connotation” that the brand aims to embody in the market.
Aside from consumers potentially choosing names that are off-brand and thereby, depriving companies of the ability to exert “control over their brand narrative” in the process, companies stand to be damaged if one group consumers is left to adopt a Chinese language name for a brand and then different Chinese trademarks are developed by different groups of consumers, which could ultimately cause confusion and “dilute the strength of a brand’s trademark,” according to Escudero.
These risks are driving forces behind why many major Western companies looking to expand into the Chinese market select separate Chinese language names, which – in many cases – are not merely a simple translation from their English language monikers, and often, make their Chinese-language names known early on. Because “Chinese trademarks as a whole are fanciful terms with no specific meaning in the dictionary,” CCPIT Patent & Trademark Law Office’s Hongyan Wang says that brands often select their Chinese names by way of “a combination of transliteration, translation and adaptation, while also factoring in the features of the goods [and services]” that they offer.
With this in mind, he asserts that brands commonly select Chinese names that “correspond closely” with their original trademarks and that have “a clear pronunciation, relevant meaning, and high level of consumer recognition.” The Chinese trademark for cosmetics giant Estee Lauder, for instance, is ‘雅诗兰黛’ (YA SHI LAN DAI); the Chinese trademark of Chanel is ‘香奈儿’ (XIANG NAI ER); and for LANCOME, it is ‘兰蔻’ (LAN KOU). “All of the selected Chinese characters relate to beauty, elegance, poetry, flowers, or perfume,” he states, noting that all of the marks “are similar to the [brand’s English language] trademarks in pronunciation; and all are easy to read.”
At the same time, Wininger tells TFL that Hermès uses 爱马仕 (Àimǎshì) on its website in China in place of the Hermès name, a term that “roughly translates as ‘loves horses,’” a nod to its roots as an equestrian brand. Meanwhile, LVMH-owned brand Bulgari opted for a Chinese language name that approximates its English pronunciation, 宝格丽 (Bǎo gé lì), as did Armani, which uses the “阿玛尼” (“A MA NI”) name in China, Nike 耐克[nai ke], adidas 阿迪达斯 [a di da si], and GUCCI, which has registered at least three Chinese marks with similar pronunciations, 古驰[gu chi], 古慈 [gu ci], and 古奇[gu qi].
All in all, Wang encourages companies that are entering the Chinese market for the first time or that have already done so but have not established specific Chinese-language names to “consider the features of Chinese characters and Chinese market, properly translate their brand into Chinese, and timely apply for registration of both their English and Chinese trademarks.” Doing so, he says, “can ensure the protection of your brand and lay a solid foundation for the marketing, promotion and success of your brand in China.”