Tim Min once drove BMWs. He considered buying a Tesla.
Instead Mr. Min, the 33-year-old owner of a Beijing cosmetics start-up, bought an electric car made by a Chinese Tesla rival, Nio. He likes Nio’s interiors and voice control features better.
He also considers himself a patriot. “I have a very strong inclination toward Chinese brands and very strong patriotic emotions,” he said. “I used to love Nike, too. Now I don’t see any reason for that. If there’s a good Chinese brand to replace Nike, I’ll be very happy to.”
Western brands like H&M, Nike and Adidas have come under pressure in China for refusing to use cotton produced in the Xinjiang region, where the Chinese government has waged a broad campaign of repression against ethnic minorities. Shoppers vowed to boycott the brands. Celebrities dropped their endorsement deals.
But foreign brands also face increasing pressure from a new breed of Chinese competitors making high-quality products and selling them through savvy marketing to an increasingly patriotic group of young people. There’s a term for it: “guochao,” or Chinese fad.
HeyTea, a $2 billion milk tea start-up with 700 stores, wants to replace Starbucks. Yuanqisenlin, a four-year-old low-sugar drink company valued at $6 billion, wants to become China’s Coca-Cola. Ubras, a five-year-old company, wants to supplant Victoria’s Secret with the most non-Victoria’s Secret of products: unwired, sporty bras that emphasize comfort.
The anger over Xinjiang cotton has given these Chinese brands another chance to win over consumers. As celebrities cut their ties to foreign brands, Li-Ning, a Chinese sportswear giant, announced that Xiao Zhan, a boy band member, would become its new global ambassador. Within 20 minutes, almost everything that Mr. Xiao wore on a Li-Ning advertisement had sold out online. A hashtag about the campaign was viewed more than one billion times.
China is undergoing a consumer brand revolution. Its young generation is more nationalistic and actively looking for brands that can align with that confidently Chinese identity. Entrepreneurs are rushing to build up names and products that resonate. Investors are turning their attention to these start-ups amid dropping returns from technology and media ventures.
When patriotism becomes a selling point, Western brands are put at a competitive disadvantage, especially in a country that increasingly requires global companies to toe the same political lines that Chinese firms must.
a jump in Tesla deliveries. IPhones remain immensely popular. Campaigns against foreign names have come and gone, and local brands that emphasize politics too much risk unwanted attention if the political winds shift quickly.
Still, interest in local brands marks a significant shift. Post-Mao, the country made few consumer products. The first televisions that most families owned in the 1980s were from Japan. Pierre Cardin, the French designer, reintroduced fashion with his first show in Beijing in 1979, bringing color and flair to a nation that during the Cultural Revolution wore blue and gray.
Chinese people born in the 1970s or earlier remember their first sip of Coco-Cola and their first bite of a Big Mac. We watched films from Hollywood, Japan and Hong Kong as much for the wardrobes and makeup as the plot. We rushed to buy Head & Shoulders shampoo because its Chinese name, Haifeisi, means “sea flying hair.”
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“We’ve gone through the European and American fad, the Japanese and Korean fad, the American streetwear fad, even the Hong Kong and Taiwan fad,” said Xun Shaohua, who founded a Shanghai sportswear company that competes with Vans and Converse.
Now could be the time for the China fad. Chinese companies are making better products. China’s Generation Z, born between 1995 and 2009, doesn’t have the same attachment to foreign names.
Even People’s Daily, the traditionally staid Communist Party official newspaper, is getting into branding. It started a streetwear collection with Li-Ning in 2019. That same year, it issued a report with Baidu, the Chinese search company, called “Guochao Pride Big Data.” They found that when people in China searched for brands, more than two-thirds were looking for domestic names, up from only about one-third 10 years earlier.