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Xu Jinhua is a frequent visitor to Natural Beauty, a chain beauty parlour in Beijing.
"There are two beauty parlours near my home but I have no confidence in their cosmetics or their equipment," said the 33-year-old white collar worker. "I trust this parlour simply because it is well-known in Beijing."
For a great number of customers in China, the brand is the top consideration when choosing products or services.
In order to help companies adapt to this trend, China's Ministry of Commerce (MOFCOM) is currently encouraging enterprises in the service sector to accelerate their brand building attempts. It follows a similar attempt in the manufacturing sector.
"The brand strategy is key to developing the industry as a whole, and is a way to boost the competitiveness of an enterprise," Deputy Commerce Minister Zhang Zhigang told the Services Working Conference held in Beijing yesterday.
He said the commercial service sector in China is currently affected by a series of problems, such as out-of-date management, poor economies of scale and weak capability.
Besides boosting some large service sector enterprises, the ministry is also encouraging small and medium sized service providers to adopt flexible operational methods in line with their own specialised service.
The ministry will promote the development of commercial services through the implementation of a brand strategy, thus establishing in China some service brands with self-owned intellectual property rights and a strong competitive edge.
After that, Zhang said, the enterprises should strive to develop themselves into famous service brands in China.
He also urged local authorities to offer more support to these enterprises.
The ministry has mapped out an ambitious blueprint for the service sector.
It is expected that in 2010, China will have cultivated around 100 well-known restaurant brands, 100 famous exhibition brands, 50 famous hotel brands as well as a certain number of well-known brands in the beauty, laundry and home service sectors
Meanwhile, the Chinese Government is attaching great significance to the protection of traditional Chinese service brands.
Zhang said some of these old enterprises are poorly served by their old equipment, management and styles.
"Therefore, we should push them to make changes in a bid to achieve management reforms and conduct innovation," he said.
"Our further plan is to help some famous Chinese brands to expand internationally," Zhang said.
China's service exports accounted for just 9 per cent of the country's total exports in 2004, 10 per cent lower than the global average.
(China Daily August 3, 2005)
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