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How many Chinese brands can you name? Probably fewer than the fingers on your hands, reckons the Atlantic Monthly journalist James Fallows. He's probably right. The typical American buys products made in China, like Nike shoes or Apple iPhones, but probably can't name many Chinese brands at all.

Still, we shouldn't make the mistake of thinking that Chinese companies are incapable of branding. nike airmax 2009 That's what Fallows suggests, and his logic would be right if this were still 2005Five years ago most Chinese companies did indeed compete mostly on price and distribution. Their management teams didn't have the savvy and patience to build brands, and their consumers were extremely price sensitive. Moreover it had taken decades for Japanese and Korean firms like Sony ( SNE - news - people ) and Samsung to become household names in the West.

Yahoo! BuzzBut in 2010 it would be foolish for executives to underestimate the competitiveness of Chinese brands. Take Li Ning, the sports apparel maker. cheap nike shoes It just announced that it had surpassed Adidas ( ADDDY.PK - news - people ) in sales in China even though Adidas had spent tens of millions of dollars as the official sponsor of the Beijing Olympics two years ago. Li Ning is no longer competing just on price. It has hired Americans to work as shoe designers near Nike's ( NKE - news - people ) Beaverton, Ore., headquarters, opened retail stores in the U.S. and Singapore and hired high-profile celebrity endorsers including Shaquille O'Neal.[url='http://"http://www.nikeeb.com/'] scarpe nike [/url]Its wide range of products appeals to Chinese consumers, while Adidas has been too slow to introduce new products and has been hit hard by a glut of inventory.

Kevin Garnett, the Boston Celtics great, opted out of his contract with Adidas to be the celebrity endorser for Anta, another up-and-coming Chinese sports apparel maker. Executives at Puma ( PMMAF.PK - news - people ), New Balance and other sports gear makers should be concerned. They are facing aggressive, marketing-savvy domestic competition in a retail market that is growing 16% to 18% a year.

Unlike other developing markets, like Nigeria or Columbia, China confronts multinationals with well-capitalized, ambitious local competitors that often get preferential support from the state.[url]http://"http://www.nikeeb.com/[/url] My firm, the China Market Research Group, recently interviewed dozens of senior executives at multinationals in 10 sectors to find out what they felt were their biggest challenges operating in China. They are concerned about rising Chinese players that are no longer positioning themselves as simply cheap but are actually moving up the value chain. This is happening in industries from health care to clean technology to consumer products.

Look at Google ( GOOG - news - people ). Our research suggests that Google failed in China in large part because consumers believed that Baidu had far better Chinese-language search capabilities, not just because of an unfair playing field. In head-to-head search comparisons we conducted, Baidu's results weren't necessarily much better than Google's, but its branding as the site that knows Chinese better than Google and that has technology as good has helped it dominate.air max shoes Unused to serious local competition, Google was slow to roll out local services and marketing campaigns that would resonate with Chinese consumers. Similarly, Ctrip, an online travel site, is beating up Expedia ( EXPE - news - people ), and Taobao, Air Max Nike shoes the online auction site, remains far ahead of eBay ( EBAY - news - people ). They are better branded, and they fit the needs of local consumers better.