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THE CHINESE ARE COMING! The Global Expansion of Chinese Companies / Brands

2021-03-04 1:03by Hina Jain0
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What do the following companies / brands all have in common?

  • Lenovo
  • Haier
  • Huawei
  • Hisense
  • Alibaba
  • Tencent
  • Xiaomi
  • ZTE
  • Anker
  • DJI

 

The answer is that they all originated in and continue to be based in China.   They are also all now “global” entities that are successful in many different markets / countries outside of China as well as being successful in China.

These companies, and multiple others in China, are following in the footsteps of the many Japanese, Korean, and Taiwanese companies who previously made the transition from “local” companies in their home countries to well known “global” companies.

Like their predecessors in Japan, Korea, and Taiwan, many of the Chinese companies now expanding globally also got their start as “contract manufacturers” for other companies from outside of China and then leveraged the knowledge / experience gained from that work to build their brands inside of China first and then expand into other markets outside of China.

As you might expect from the “factory of the world”, a significant portion of the branded products sold globally by Chinese companies are “consumer electronics”.  The Chinese companies also have a large global presence of branded products in certain “heavy industries”.  This is similar to what happened with their predecessors in Japan, Korea, and Taiwan.

However, what you might not realize is how big of an influence Chinese companies are also having in other areas such as “mobile gaming”, “e-commerce”, and “banks & payment networks”.   In these areas, much of the influence can be attributed to investments being made by Chinese companies in non-Chinese companies that the Chinese companies are then leveraging to create new products and to expand into even more markets.  The Chinese companies in these areas have realized that they don’t need to create everything internally in order to achieve their business goals.

Chinese companies are no longer content to sell in their domestic market only (as large as it may be), and they are no longer content to simply be the manufacturing source for products being sold into all of the markets outside of China.  As a result, the market dynamics in many countries / industries will change dramatically over the next few years as Chinese companies continue their global expansion.  There will be many new risks and many new opportunities for you to consider in your businesses.

While Chinese companies generally have significant cost advantages over their non-Chinese competitors (for several different reasons), the Chinese are not yet “masters” of marketing or of distribution outside of their home country.  This provides opportunities for collaborating with as well as for competing against Chinese companies.

If you haven’t already been doing so, it would be very wise to pay close attention to the moves being made by Chinese companies in your industries and in those industries adjacent to yours in the markets that you currently serve as well as in those markets that you desire to serve.

Your future success will be very heavily influenced by how well you monitor and respond to the expansion of the Chinese suppliers.

If you need any assistance for your business in China, visit www.victuregroup.com.

Join the following the largest China Sourcing group on LinkedIn at https://www.linkedin.com/groups/4462099/

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