Global Proliferation of Chinese-Made Products: A Multi-Country Study on the Effects of Empathy and Expanded Worldview on Chinese-Made Product Evaluation

Where a product is originated from (country-of-origin effect, COO) is a topic that draws intense efforts in international marketing research. Studies show that this effect is salient and persistent (Bilkey and Nes 1982; Klein 2002). While products originated from developed economies are favored, those from “developing” economies, such as BRICs (Brazil, Russia, India, and China, Verlegh 2007) are unfavorably evaluated (Brouthers and Xu 2002). To reduce the unfavorable effect, products from developing economies need to carry internationally established brand names (Pappu et al. 2007) or sell at major price discounts (Sharma 2010).

Interestingly, the above generalizations could not explain how or why Chinese-made products proliferate globally. While studies (Sharma 2010) and executive interviews (Walmart’s CEO) remarked that Chinese-made products could only be marketed at the low-end, value-based segment (Tan and Tse 2010), some newly established Chinese brands, such as Shanghai Tang (fashion clothing brand) and Herbalist (cosmetic brand), have succeeded in affluent markets. In short, why Chinese-made products globalize is a phenomenon the COO literature has yet to explain.

There are three conceptual issues that need to be addressed. First, the quality (safety) of Chinese-made products is a well-known concern. Thus, why would affluent market consumers accept Chinese-made products in spite of these concerns? A second challenge emerges from the consumer ethnocentrism literature that suggests that some consumers would adopt a nationalistic bias and reject foreign-made products (Shimp and Sharma 1987; Klein 2002). As China becomes the world factory eroding jobs in affluent economies, it breeds an unfavorable sentiment against China (Verlegh 2007). The third issue relates to a more accepting worldview involving China and other emerging economies. According to Pew's polls, such tendencies are already taking place (Pew Global Attitude Project 2007). We postulate that an expanded worldview will reduce ethnocentric bias and enhance consumers’ product evaluation.

We propose empathy (for made-in country) and an expanded worldview are core constructs in understanding the proliferation of Chinese-made products. Using a model that integrates existing COO literature, we examine our hypotheses by sampling consumers from affluent (American and British) and developing markets (Indian and Filipino). With the help of a multinational research firm, Millward Brown, we test our hypotheses using a multi-country survey with 400 consumers from each country. In sum, our study aims to validate an expanded COO model that integrates the effects of made-in-country empathy and expanded worldview in the acceptance of Chinese-made product.