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 senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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