Only through quality can China conquer the global market

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Chinese smartphone maker Xiaomi is celebrating five years of success this week. In its home market, the company has secured a solid niche and is now extending its reach overseas.

Alibaba’s voyage to success took somewhat longer. When Jack Ma went to Hannover for the CeBIT exhibition 14 years ago, few people were interested in his small e-commerce firm. A second attempt eight years ago to market goods and services in Europe also ended in failure.

Last month, Ma made a triumphant return to the world’s largest high-tech trade fair with a cutting-edge facial recognition payment system developed by his company.

Chinese companies are taking their place on the global stage. Huawei provides telecommunication services in remote parts of Siberia and South American rainforests. China South Railway is making trains for South Africa.

For a long time, “Made in China” was synonymous with poor quality, low prices and fakes. Now, products and services underpinned by innovation are changing the global commercial landscape.

Brands like Alibaba, Lenovo and Huawei are increasingly recognized by consumers abroad, according to a survey on China’s global image by China Foreign Languages Publishing Administration (CFLPA).

“Chinese enterprises are more aware of the need to nurture their brands as part of the ‘go global’ drive,” said Wang Haizhong, a brand strategy researcher with Sun Yat-sen University.

The 2014 Fortune Global 500 list featured 100 Chinese companies, in contrast to 128 United States enterprises on the list.

“Chinese enterprises are hardworking, entrepreneurial, market-sensitive and capital-sufficient,” said Wang.

Innovate, innovate, innovate

Late last month during a State Council executive meeting, Premier Li Keqiang called for an innovative approach to support “Made in China”.

Nearly all entrepreneurs interviewed by Xinhua regard “innovation” as their core competence.

The CFLPA survey showed around 64 percent of all overseas respondents making positive comments on Chinese enterprises’ ability to innovate and the ratio was even higher in developing countries.

Huawei’s Hu Houkun attributes his company’s success to persistent technological progress, an open attitude to cooperation and better management.

Huawei spent 40.8 billion yuan ($6.6 billion), 14 percent of its revenue, on research in 2014. Over 45 percent of its 150,000 staff work in R&D. New ideas such as mobile Internet, cloud computing and big data have helped Chinese companies to catch up with (and even overtake) their foreign counterparts.

Huawei filed 3,442 patent applications in 2014, followed by US chip maker Qualcomm. ZTE, another Chinese telecom systems developer, took third place.

“In the personal computer business, it took Kingsoft 26 years to accumulate 300 million users. We collected the same number of mobile users in only three years,” said Ge Ke, Kingsoft CEO.

The tide of new technology will bring a new wave of innovation to China, Ge said, and with it more Chinese brands will rise to global prominence.

Culture, community, social responsibility

Chinese firms abroad now actively work to adapt to local culture and engage communities. They take social responsibility seriously. Neglect of local conditions has been fatal to many businesses.

Wu Wei, vice general manager of energy equipment producer Tebian Electric Apparatus Stock Co (TBEA), said her company, with training centers in Tajikistan and Kyrgyzstan, employs and trains many local workers in every overseas project. About 95 percent of the employees at a TBEA research base in India are locals, and most were trained in China.

To increase its global profile, white goods producer Hisense sponsors the Australian Open tennis tournament, German football club FC Schalke 04 and Formula 1. Yingli Solar, a leading solar panel producer, has twice been a sponsor of the FIFA World Cup.

As internationalization proceeds, many obstacles remain to be cleared, including previous bad investment decisions and discrimination. One of the greatest challenges is the established stereotype of low prices and poor quality, according to Wang.

“To dismiss this stereotype, competent enterprises in key sectors should stand out with high-quality goods and services, and engage in more global events,” said Wang.

 

 

Source : China Daily | April 9, 2015

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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