Chinese brands are sweeping the world. Good

Ask a Westerner for an example of a successful Chinese consumer-goods brand, and until recently most would have struggled. Although China is the world’s premier manufacturing power, it has long lagged behind when it comes to imaginative home-grown retail brands and products, even as its factories have cranked out vast numbers of them for foreign companies. This is now changing. Innovative Chinese brands are popping up everywhere. Consumers and investors around the world stand to benefit

From Stockholm to Sydney, the electric car gliding silently by is increasingly likely to be Chinese. Mixue, a purveyor of ice-cream and cold drinks, has dethroned McDonald’s as the world’s largest fast-food chain by number of outlets. It is expanding in South America, as is Meituan, a Beijing-based delivery app. Chagee, a chain of tea shops, is on track to have at least 1,300 stores outside China by the end of 2027, mainly in South-East Asia; a few years ago it had barely any. And Pop Mart, a Chinese toymaker, has created a buzz worthy of Disney around its strange grinning (or are they grimacing?) nine-toothed dolls, called Labubus. Fans include Rihanna, a pop star, and Sir David Beckham, a retired footballer.

Chinese brands were long seen as poor-quality, unimaginative and unfairly subsidised. Scandals around food safety and labour standards did not help.  New firms are now overturning those old assumptions. Many happily advertise their roots.  Many brands now compete on quality as well as price.

In the past, Chinese firms typically succeeded by learning to replicate Western products cheaply. Now they are accumulating valuable intellectual property of their own. And though state media outlets laud Labubus, the government does little to subsidise these new consumer firms (with the exception of electric-carmakers). Indeed, China’s capital markets, which are tasked with nurturing technologies to beat America, are stacked against them. Consumer firms have received only 3% of the capital raised in listings on the mainland over the past two years. Chipmakers have taken five times as much.

The rise of Chinese consumer brands is good for shoppers everywhere: they now have a wider array of innovative products to choose from. Investors, too, should welcome the sight of oddly mesmerising dolls and the taste of red-bean ice-cream.

Western firms will have to wake up and smell the bubble tea. Within China, the premium that foreign brands command simply for being foreign is eroding. In the future they will need to try harder to understand Chinese customers’ particular tastes. Some may even do deals with inventive Chinese partners, to gain insight and inspiration. These are still early days for Chinese marques’ foray into global markets. But Chinese carmakers are already forcing Western rivals to reconsider their strategies. And competition from China may eventually push Disney, Mattel and other Western mega-brands to new heights of creativity. Chinese brands’ westward journey, like the Monkey King’s, could bring lavish rewards.

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