Lenovo's Crisis In China

Lenovo
A Lenovo ultrabook and a tablet are displayed during a news conference in Hong Kong, China May 21, 2015. (Photo: REUTERS/Bobby Yip/File Photo)

Within a month after Lenovo came under heat due to allegations that it exploited the Chinese people's deep love for their country, the company has once again been called out for its alleged "unpatriotic" move in adding China into its brand name at a critical time.

Some analysts noted that Lenovo's popularity may slowly decline in its home turf following questions about its sincerity. The backlash started after the firm made the quiet move of changing its name to Lenovo China.

Many of China's online community members questioned whether the laptop giant was sincere about its decision to change its name or if the decision was made as a strategy to hopefully get the support of the massive Chinese market amid raging trade war with the U.S.

The last few months of U.S. tariffs being handed out to billions of Chinese goods triggered a wave of nationalism among consumers and netizens in the country. Ever since tariffs started rolling out and Huawei was blacklisted from working with American firms, Chinese communities have been watchful of other home-grown companies.

It didn't help that rumors circulated in May regarding Lenovo allegedly halting supplies to Huawei due to increased pressure from the U.S. government. The company has denied the rumors.

This is not the first time Lenovo went under fire for inappropriate comments and missteps. Late last month, CFO Wai Ming revealed that the company can relocate production from its home country should the White House slap additional tariffs.

Chinese Internet users immediately unleashed comments online, reminiscing on CEO Yang Yuanqing's comments in September last year that Lenovo is "not a Chinese company" and instead is a "global" firm.

At that time, the laptop provider clarified that Yang's comments were taken out of context. Yang explained through Chinese social media platform Weibo that his statement was referring to Lenovo's global manufacturing plants and international ventures.

2018 was particularly a crisis-laden year for the company as the issue on the firm's decision to back Qualcomm over Huawei in a 5G standards scheme in 2016 resurfaced. Alibaba Founder Jack Ma seemed to come to Lenovo's rescue at that time, stating that competition was necessary for business.

Yang denied that it sold out its own over the U.S. chipmaker. Founder Liu Chuanzhi admitted that criticisms against the company he built were beating on its reputation. A local media outlet revealed during the chaos that Lenovo switched to vote for Huawei's Polar code camp a month after.

Due to the recent backlash against Lenovo, some industry experts indicated that confidence in the company could decline, as well as support from Chinese buyers who are usually very supportive of products manufactured from their home country.

Lenovo has yet to comment on its name change.

© 2019 Business Times All rights reserved. Do not reproduce without permission.
Sign Up for Newsletters and Alerts