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Explanation Of China’S Shopping Spree Of The Last Decade

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Dotcom bubble collapsed in 2000-01 and that was one of the most significant events that shook the financial world as was the case with the financial meltdown of 2007-08. Companies were perplexed that what happened wrong after everything was going smoothly. The reputation of all the big companies took a hit as a result and some of them fell like ninepins and made everyone scared. The global financial collapses as discussed above are one of the many reasons why companies worked seriously towards building a brand. A top brand image became the top priority for upcoming startups and small businesses as they knew if they have to compete in a fragile market, they need to take desperate steps. The companies in Asia, in particular, though of a smart plan and started acquiring big companies with a good brand reputation all over the world. Let me discuss this aspect with you in detail now.

Turbulent Times call for Desperate Measures

After the dotcom bubble busted, no one thought of a shopping spree by Asian companies primarily from China, India and the countries from the Gulf/Middle East. Some of the best known companies that were acquired or got merged in this period included IBM’s ThinkPad (US) to Lenovo, (China) UK cereal maker Weetabix to Bright Foods, (China) Jaguar/Land Rover (UK) to Tata Motors, (India) and Harrods (UK) to Qatar.

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The idea behind this major acquisitions over a course of a decade right from 2002-2012 was all about acquiring companies already having a brand name. Acquiring existing global brands is always a safe bet as starting a company from the scratch and turn it into a household name. But a question arises; why a country like China waited so much to buy these companies as it could have years ago? Let me shed some light on this aspect now.

Buying Big Brands on a Bargain Price

It is a known fact that countries like China and India grew at an unprecedented pace during the last 1 decade or so. For 2-3 years they even had double digit growth. China’s foreign reserves over the years grew astronomically as exports outweigh imports by a long margin. After the dotcom bubble and financial meltdown of 2007-08, companies all around the world faced severe cash crunch and their stock prices nosedived. The effect of increase in demand of finished goods of countries once thought as developing countries by their middle class made the companies operating in those countries earn huge profits. UAE and most notably Dubai did have the advantage of oil through which they were earning a handsome amount without much new investment. But, there too, companies looking to get a head-start have to take the assistance of a reputable branding agency Dubai.

A Brief Explanation of China’s Shopping Spree of the Last Decade

As I have discussed in the paragraphs above that the companies from China reaped the benefit, so this was just the right time for companies like China and in the Middle East to buy companies of their choice as they were reeling with cash crunch and looking for someone to salvage their brands in a fierce marketplace. Much of the companies that were bought by China and the Gulf countries belonged to Europe and North America. And there were good reasons why some of the biggest firms looked to be bought.

The example of Jaguar/Land Rover hits the bull’s eye. Land Rover and Jaguar were once one of most iconic brands in the world. Along with Aston Martin and Rolls Royce, they were considered the symbol of rich and the famous. But with changing times and most notably with the Japanese and German cars making a dent into their sales, Jaguar lost its charm even among its loyal fans. So when eventually Tata Motors bought the company in 2008, most people weren’t surprised at all.

What it Takes for a Brand to Sustain in the Marketplace?

Big companies and conglomerates now have learned the lesson mainly from China’s acquisitions of some of the biggest brands in the world. Companies now look to consolidate their market image with smart strategies and remain in the news. They use social media platforms aptly and use their websites too to attract their target market in hordes. That’s one of the reasons why they need a web design company to offer them the deft support in this regard. Tech companies too, who were the main recipient of the dotcom bubble, tried desperate measures and to some extent they succeeded too. Microsoft and Google, for example, bought every company they think as a direct competition to one of their products. That was the reason no company emerged as a competitor to these above mentioned giants.

Final Word

It take years to create a brand and make it a household name. But just a single incident or tough economic scenarios can tarnish its image to a great extent. That’s why companies need to think of strategies that can make them survive any situation and its dire consequences. Please share your thoughts with me and other readers regarding this post in the comments section below.

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