The great era of Chinese enterprises going overseas

Mondo Finance Updated on 2024-01-30

Author |Liu Jingfeng.

In August 1984, when a freighter carrying 30,000 sets of automobile universal joints departed from Xiaoshan, Hangzhou, and crossed the ocean to the United States, the Associated Press on the other side of the ocean sensitively sent a set of telegrams:

"A farmer-run factory became the first Chinese company to succeed in the U.S. auto parts market. ”

This peasant-run factory was still a township enterprise at that time - Hangzhou Xiaoshan Town Universal Joint Factory (the predecessor of Wanxiang Group).

Thirty-eight years later, the founder of this township enterprise will represent the Chinese automotive industry and winThe world's highest honor in the automotive industry, the American Automotive Hall of Fame.

The first step of the universal joint factory in the overseas market is also the earliest step for Chinese private enterprises to go overseas after the founding of the People's Republic of China.

In the following decades, Wanxiang Group successively established American companies, and gradually integrated into the local community through the evolution of its role from a businessman, investor to a partnerAnd knocked on the door of General Motors of the United States and entered the mainstream market of the United States;In 2000, Wanxiang set a precedent for township enterprises to acquire overseas listed companies. Today, Wanxiang is one of the representatives of the globalization of China's private enterprises.

If you count from the first step of Wanxiang, it has been nearly 40 years since China's private enterprises "went to sea". In the past 40 years, China's private enterprises have realized the trend from sparks to prairie fires overseas, and in the field of manufacturing, there are a number of international enterprises such as Wanxiang, Fuyao, and SanyIn the field of science and technology, there are Huawei, Tencent and other technology companies with global layout;In the field of e-commerce, Alibaba, Pinduoduo and TikTok are deploying the e-commerce model that has been successfully verified in China to the world, and even the Chinese e-commerce platform has become the biggest attraction of this year's overseas "Black Friday" shopping festivalIn the field of pan-entertainment, Chinese game companies and entertainment companies have already blossomed in ......the global market

Taking Fortune China 500 companies as an example, more than 90% of them have different forms of international business, and nearly half of them still regard expanding overseas international business as one of the important strategies of enterprises in the futureThe way to expand international business is not only focused on overseas investment and mergers and acquisitions, but also takes into account overseas localization operations, such as overseas marketing capacity building, overseas ** chain and overseas technologyWait.

This is the turbulent changes in the current era of globalization - when the global chain begins to reconstruct, countries begin to pay attention to their own manufacturing capabilities, China has the most complete manufacturing category, a strong chain has become a scarce capacity, superimposed on China's rapid rise of digitalization, Chinese enterprises are expanding the ability to upgrade the manufacturing industry to the world, and become a new force of globalization.

On a summer night in July 2022, the entrance of the Convention and Exhibition Center next to the Detroit River in Detroit, USA, was very lively, and luxury cars parked here, and VIPs in dresses got off the cars one after another and walked into the venue.

Inside, the 2022 American Automotive Hall of Fame Awards Ceremony was held. It was at this ceremony that Lu Guanqiu, founder of China Wanxiang Group, was inducted into this year's Hall of Fame, along with Ferruccio Lamborghini, founder of Lamborghini, and Naichi Ohno, founder of Toyota's production system TPS.

This is the first time in the 83-year history of this highest honor award in the global automotive industry that it has been awarded to Chinese. Wanxiang is also the first company to be selected for clean energy vehicles.

Lu Weiding attended the award ceremony and accepted the Automobile Hall of Fame trophy on behalf of Lu Guanqiu, Chairman of the Board of Directors of Wanxiang.

As a symbol of the automotive industry, the world-renowned Automotive Hall of Fame awarded the award to Chinese automobile companies for the first time, which also means that China has been recognized by the world.

In fact, the award won by Wanxiang this time, which is also a microcosm of the entire Chinese new energy vehicles beginning to compete for overseas dominance.

On July 3 this year, China's 20 million new energy vehicles rolled off the assembly line at the Guangzhou GAC Aion production line. From the first to the 10 millionth, it took China 27 years;From the 10 million to the 20 million, it took only 17 months for China. Also in this month,For the first time in the first half of the year, China's automobile exports surpassed Japan's, ranking first in the world.

These new energy vehicles have contributed to China's leap to become the world's largest automobile exporter. According to data from the General Administration of Customs in August this year, China's vehicle exports in the first half of this year were 2.34 million units, a year-on-year increase of 769%。Among them, the export of new energy vehicles was 7950,000 units, a year-on-year increase of 1127%, the momentum of China's new energy vehicles going overseas is unprecedentedly strong.

Under the general trend of going overseas, China's new energy vehicles have also been recognized all over the world. According to the data of the China National Association, the production, sales and ownership of new energy vehicles in China account for more than 50% of the world. In Europe, one out of every 10 new energy vehicles comes from ChinaIn the Middle East and Southeast Asia, driving China's new energy vehicles has become a fashionable ......

China's industry, represented by automobiles, has been the vanguard of Chinese enterprises going overseas in the past few years. In addition to Wanxiang, BYD, Geely, etc., there are also Sany Heavy Industry, Liugong, Haier, Hisense, Gree and so on. Today, they are not only the leading enterprises in China, but also the world's leading enterprises in their fields, and have become the first batch of Chinese enterprises to go overseas.

Driven by them, batches of Chinese small and medium-sized enterprises and "individual champions" have also joined the tide of going overseas in recent years.

For example, Damon Technology, which started from rollers and became the "single champion" of the track, has more than a dozen sales and service organizations and four overseas assembly plants around the world, and its goal is to become a small multinational enterprise in a subdivided fieldHals, located in Yongkang City, China's "hardware capital", started as a cup and pot OEM, and has now become a leading enterprise in China's cup and pot industry, and has acquired the Swiss century-old brand Sigg overseas and launched the Santeco brand in North America, and has sold 4500 million cups and pots;Yueli Group, a small household appliance enterprise in Cixi, Zhejiang, has become one of the world's largest hair dryer manufacturers by relying on hair dryers alone, and its products are exported to the Americas, Europe, the Middle East, South Africa, Southeast Asia and other regions, of which the products sold to the American market once accounted for 40% of the company's total exports.

Going overseas is no longer the patent of large Chinese enterprises, but a necessary characteristic of excellent enterprises.

This trait has even spread to the tech unicorns that have risen in China in recent years.

For example, SHEIN, with the advantages of China's ** chain and digital capabilities, has become a super unicorn with a valuation of 90 billion US dollarsTikTok has only been established for 6 years, but it has shaken Meta in the social field, repeatedly topped the global app list, and has become the most popular social platform for overseas usersThe overseas version of the "Pinduoduo" platform, Temu, which was only launched in September last year, has become the biggest dark horse in this year's "Black Friday" with its strong discount capacity.

For a time, from New York and San Francisco in the United States, to rural residential areas in Japan, to Singapore and Malaysia in Southeast Asia, online shopping has become the most popular way of consumption. All of this is inseparable from the globalization of China's e-commerce and online payment models.

Even in terms of food, Chinese tea, hot pot, and time-honored brands are sweeping the world. For example, as of October this year, Mixue Bingcheng has 4,000 overseas stores, while the number of its overseas stores was only more than 1,000 in the middle of last year, an increase of nearly 3,000 in more than a yearIn August this year, Heytea opened its first store in London outside of Asia, and on the opening day of the London store, it is said that some consumers waited in line for hours to buy a cup of tea from China70% of its stores are next door to big brands such as Starbucks and McDonald's, with an average monthly turnover of 300,000 yuan, and its co-founder Shang Xiangmin previously said that the "small goal" in 2023 is to accelerate the plan to open stores overseas.

In terms of eating, in addition to Haidilao's popularity overseas, Little Sheep, Liu Yishou, Shu Daxia, Xiaolongkan, Xiang Tianxia, Xiabu Xiabu and its high-end brand "Coucou" and other influential hot pot brands in China have been deployed overseas and are loved by overseas diners. Hot pot has become the forerunner of Chinese cuisine going overseas.

From manufacturing giants, to first-class champions, to Internet unicorns, and even daily consumer brands, the main body of Chinese enterprises going overseas is gradually extending to smaller and smaller enterprises, and they have also become a new force for Chinese enterprises to go overseas.

If the past two centuries were the era of globalization of Western enterprises, then today Chinese enterprises have also begun to accelerate on the stage of globalization. The times are already rewarding Chinese companies for going global.

Behind the globalization of Chinese enterprises, what is promoting?

This is a question with extremely diverse answers.

Some people say that this is because the domestic market is too volatile, and Chinese companies need to explore overseas marketsIt is also said that Chinese companies are looking for new opportunities overseas based on some overseas parties.

Although these answers are not wrong, if the most essential core is extracted, the core strength of Chinese enterprises' globalization may be the structural advantages accumulated by Chinese enterprises at present, including the ability of the first chain, organization and management, technology and product advantages, etc.

Let's talk about the advantages of the ** chain first. There is a vivid example, an international practitioner once told Xiaguang Agency: "We have an observation that new energy products on the international ** platform,But everything from China has an absolute advantage over products from other places - the same quality, Chinese products are cheaper;In the same way, China's products are more functional and of better quality.

In fact, not only new energy products, but almost all products that can be manufactured in China, from automobiles to home appliances, daily necessities, and food and beverage consumer goods, all follow such a law.

This is because China has the world's most complete set of industrial categories and the most complete chain capabilities.

China has 41 major industrial categories, 207 medium categories, and 666 sub-categoriesIt is the only country in the world that has all the industrial categories in the United Nations Industrial Classification.

The more complete the industrial category, the stronger the resilience of the chain - once the chain is damaged, it can be repaired and restored in a shorter period of time.

In the past, China undertook the transfer of the global industrial chain, making it play a central role in the Asian regional chain. From the perspective of China** dependence of major Asian economies alone, according to UNCTAD statistics, in 2020, ASEAN, Japan and South Korea accounted for more imports from China than in 2012. 5 and 77 percentage points. China has become the largest partner of most Asian countries.

After the epidemic, when the global ** chain suffered a heavy blow and faced reconstruction. In this case, the advantages of China's ** chain are further highlighted. A statistic shows that in 2021,China's manufacturing added value accounted for 18 percent of the world's total value added in 20102% increased to nearly 30%, which is equivalent to the United States (16%), Germany (7.).4%), day (5.).2%), the sum of the three countries has an absolute advantage in the world, and other countries such as India and Vietnam cannot surpass it in the short term。Superimposed on the transformation and upgrading of the manufacturing industry brought by digitalization and intelligence, this competitive advantage continues to be consolidated.

One of the phenomena brought about by this is that countries around the world are highly dependent on China's ** chain. For example, according to a report by the McKinsey Global Institute, among the 186 countries and regions in the world, 33 are the largest export destination is China, and 65 are the largest import destination is China.

A strong manufacturing base, a huge number of laborers, and a huge market demand naturally make Chinese products extremely cost-effective.

Secondly, it is the ability to organize and manage.

Many overseas companies have this feeling: overseas, many local employees are more "free" to work, have a fixed commute time, and will have strict rest on Saturdays and Sundays. This is difficult for some service industries to accept.

Taking express delivery as an example, in the past, in Southeast Asia, the Middle East and other places, express delivery was only delivered during working hours on weekdays, and an ordinary express mail could only be delivered to consumers within a week after placing an order, sometimes even two weeks. However, when Chinese express delivery companies come to Southeast Asia and the Middle East with the express delivery model that has been verified in China, it not only greatly optimizes the local express delivery process, but also improves the delivery efficiency of express delivery, and a product can be delivered to consumers within three to five days after placing an order. The delivery of express mail is faster and more, not only the consumer experience is better, but the income of the courier has also increased significantly.

Express delivery is just one of the many areas that have been "transformed". In fact, behind the transformation of China's express delivery is the rapid development of the entire Internet.

The most important management change of the Internet is that the organization is flattened and the system is more sensitive. Taking TikTok as an example, its overseas team is mainly composed of local employees in the host country, and the overseas company has sufficient decision-making autonomy. Even TikTok's internal employees can't say that the company's global headquarters is in **,Rooted in the local + decentralized centralized management".Make its market sense more acute.

This way of organization and management also promotes technological innovation and product optimization.

The third is the advantage of technical product capabilities.

The past decade has been the first decade of China's Internet development, which has also created a group of nearly 80 million engineers in China, and China has the largest number of engineers in the world, more than the United States.

The huge group of engineers provides a solid foundation for the development of Internet technology and the iteration of scientific and technological products. Today, China has become one of the world's leading companies in the fields of e-commerce, gaming, pan-entertainment, and even AI capabilities. For example, TikTok has surpassed Facebook to become the world's largest software since 2021, and surpassed Google to become the world's most visited Internet**, and has exceeded 1 billion monthly active users worldwide in 5 years (only half the time it took Facebook) to be online.

* Chain advantages, technical product advantages and organization and management advantages have respectively promoted the export of product brands, APP applications and service capabilities. The three directions of going to sea promote each other and become a new ecology of going to sea.

To sum up, there are three particularly major changes in the current Chinese enterprises going overseas:

First, from large enterprises to small businesses. In the past, most of the enterprises that went overseas were large enterprises such as state-owned enterprises and industry leadersNow, many small and medium-sized enterprises are starting to operate overseas;

Second, from the product to the brand. China is the world's largest exporter, and the proportion of commodities, raw materials and semi-finished products going overseas is relatively high. Up to now, with the improvement of product quality and service, the company has changed from OEM to brand going overseas;

Third, from entrepreneurs going to sea to organizing going to sea. In the past, entrepreneurs invested overseas, but now companies prefer to localize, build factories and offices overseas, hire local staff, and integrate into the local culture.

But if we take a long-term view, when Chinese companies are born global, what kind of background should they have?

This kind of background will not be a single first-class chain ability, technical product ability, and management ability, but a feature at the bottom of these capabilities - cultural soft power.

Previously, when Xiaguang Society visited overseas enterprises in Jiangsu and Zhejiang, it was found that many private enterprises here have a strong cultural precipitation.

In Xiaoshan, Hangzhou, the "capital of down raw materials", there is a company specializing in the production of down products - Zhejiang Samsung Down Products*** In the past, this company mainly provided raw materials for some big-name down products at home and abroad, and then with the decline of foreign trade, Samsung down gradually embarked on the road to sea through cross-border e-commerce. In May 2022, Samsung Down launched a REST cool quilt on Amazon, which directly made this brand "out of the circle" and became the star product of the duvet category on the Amazon platform.

When you are in the company, you will find that there is a deep accumulation behind its success in going overseas - in the showroom of Samsung Down Company, there is a two-story down museum. It not only shows the history of down development in China and the world, as well as some unique down raw materials, such as Icelandic goose duck down, which is extremely scarce with a down content of nearly 99%, and Samsung down is imported from Iceland and processed and supplied to domestic down jacket brands to produce more high-end down jacket productsA variety of down raw materials combined with science and technology were also exhibited, such as aromatic down materials with microcapsules, heat-generating down with heat-generating fibers, and water-repellent down ...... using nanomaterials

Samsung Down exhibits a variety of down raw materials.

Here, people can see that behind a slight down, there is a huge culture, as well as the spirit of continuous innovation and breakthrough of Chinese enterprises. With the popularity of REST cool quilts overseas, China's down culture has gradually spread to overseas markets.

Samsung down shows the down culture, while Hals is the representative of the cup and pot culture.

In Yongkang City, 200 kilometers away from Xiaoshan, it is the hardware capital of China. There is a company here, which is one of the most influential cup and pot enterprises in China - Zhejiang Hals Vacuum Ware Company. The cumulative sales of its products have reached 500 million so far, not only that, in August 2022, Hals's brand Santeco "Titanium Lifewater" smart titanium cup was also successfully launched into space with a rocket and the "Donghai No. 1" satellite, which verified that all parameters of the "Titanium Lifewater" smart titanium cup meet aerospace standards.

Overseas brand cup pot exhibited by Hals Cup Pot.

Behind these visible achievements and glory, this company has gradually accumulated a set of cup and pot culture. From the history of cups and pots in ancient China, to the history of the World Cup, to the development of the cup and pot industry in modern China, and even the special cups and pots made of different scientific and technological materials, a huge exhibition hall shows people's exploration of cups and pots and utensils to the fullest - what kind of scene, what kind of cups and pots are used;What kind of needs, with which function of the cup pot;What kind of crowd and what kind of cups and pots are suitable for you can find the answer here.

When you're inside one of these museums, you'll find:Behind a company, the essence is the culture it represents and creates. And these cultures are actually the core of Chinese enterprises' external display - tenacity, creativity, simplicity and so on.

When we export our enterprises and products to the world, it also means that we bring China's oriental culture to the world, and we are also changing their cognition and life. A overseas entrepreneur sighed.

Looking back, in the past 40 years, Chinese enterprises have gone through the development process of the West for 200 years, from the introduction of learning Xi digestion, to their own exploration and creation, technology, products, concepts after rounds of iterative upgrading, now it is time to go out in the opposite direction. This is not only the task of the current enterprise, but also indicates that the enterprise is entering a new height of growth.

Wang Pinxian, an academician of the Chinese Academy of Sciences, once said a sentence:

"If the Chinese civilization wants to stand up, it must win from the competition at sea. ”

According to a statistic from the World Bank, although the global economy has maintained positive growth in the past decade, the pace of countries has not been consistent - about 60% of the world's economic output today comes from coastal areas no more than 100 kilometers from the coastline, and some countries, especially landlocked countries, have been marginalized in the process of economic globalization, or even become "forgotten corners", and they will in turn restrict the process of economic globalization.

In the past few thousand years, continental civilization dominated the process of human civilization;But after Columbus discovered the New World, the maritime civilization began, and history entered a new cycle.

Academician Wang Pinxian once wrote an article on the core of marine civilization. He thinksModern science is a product of maritime civilization. Modern science has condensed the wisdom of various civilizations, and China, India, and Arab civilizations have all contributed, but the backbone is the maritime civilization of ancient Greece. The agrarian civilization of the continent requires inheritance and stability, while the maritime civilization advocates adventure and adventure, so the former tends to be conservative, and the latter tends to change, which is the premise of scientific innovation. This is of special significance to our efforts to build an "innovative nation".

This means that the contemporary ocean battle is actually a battle of science and technology"Our marine science and technology started too late, there are too many debts, and the road to 'strong country' is quite difficult."

Looking at the present, technology is entering a period of explosion, and the global market is ushering in new changes. Under this, China's economic growth model has formed the basic characteristics of "two-wheel drive" of domestic demand + external demand. This is also an important force in China's economic growth over the past few decades.

In recent years, with the deepening of protectionism in many countries around the world, a voice of "anti-globalization" has faintly sounded. Some scholars believe that on the one hand, the current global order may enter a long period of disintegration and reorganization, which will inevitably produce a certain degree of chaos and disorderOn the other hand, we may usher in a new world that is more in line with the principles of reciprocity, reciprocity, pluralism, respect, justice and development, whether in terms of economy, culture, religion or ethnicity, that is, it will be able to build a new global order that embodies the concepts of "sharing weal and woe" and "harmony without diversity".

It is an indisputable fact that the global economy has entered a cyclical downturn and world consumer demand has entered a period of weakness. ButFor production enterprises, going overseas is one of the keys to breaking the cyclical nature. The difference in market space and profitability has made going overseas a way for countless manufacturing companies to break the cycle and grow again in the past.

As a manufacturing country, with a huge global market, China can quickly "dilute" the cost of industrial products through scale advantages, realize various complex supporting production required by industry, make various industrial products very cost-competitive, and greatly enhance the global competitiveness of Chinese manufacturing.

At the same time, with the accumulation of hard technologies such as AI in China in recent years, it can promote the digital and intelligent transformation of enterprises and accelerate the entry into the intelligent era.

Based on the above changing trends, every Chinese enterprise needs to continue to optimize its global development roadmap and take "localization" as the basic criterion for integrating into overseas markets in its future overseas operations.

Even, enterprises going overseas should understand and study the development context of overseas countries in the same way as they study China's "five-year development plan". For example, Indonesia's National Revitalization Plan, ASEAN's Connectivity Master Plan 2025;Kazakhstan's "Bright Path" NEP, Turkey's "Middle Corridor" initiative, Saudi Arabia's "Vision 2030" plan, Egypt's "Suez Canal Corridor Economic Belt" plan;and even the "Northern Economic Center of England" in the United Kingdom, the "Amber Road" in Poland, etc.

Under these policies, the map of demand, which used to be heavily skewed in favor of advanced economies, is now being redrawn by emerging markets. According to McKinsey estimates,By 2025, emerging markets will consume nearly two-thirds of the world's manufactured goods, including products such as automobiles, building products, and machinery. Developing countries are expected to account for more than half of global consumption by 2030. These countries will continue to be deeply involved in the global flow of goods, services, finance, people and data.

Today, many Chinese companies have seized the opportunity to grow rapidly from the huge demand in these emerging markets. For example, in the mobile phone market, Shenzhen Transsion Holdings, founded in 2013, seized the demand for low-cost smartphones in Africa, the Middle East, Latin America and other markets at the beginning of its establishment, and launched a large number of affordable smartphone models, wholesale** less than 100 US dollars. In just ten years, it has become the "king of African machines", surpassing vivo and Honor in terms of shipments, and ranking among the top five smartphone manufacturers in the world.

For another example, J&T, which was listed on the Hong Kong Stock Exchange in November this year, started from Indonesia in 2015 and rolled out the domestic verified express delivery model in Southeast Asia, the Middle East, Latin America and other markets, greatly improving the efficiency of local express delivery and express delivery experience, but also incarnated as a dark horse, and it took only 8 years to reach the scale that the domestic private express giants have accumulated in nearly 30 years.

In the past, in the eyes of people, the globalization of enterprises was a slow growth and a long-term accumulation, and it took more than ten years or even decades for an enterprise to extend from local to overseasBut today, going overseas has greatly increased the speed of globalization of Chinese enterprises, and even companies such as Transsion and J&T have focused on globalization at the beginning of their establishment, focusing on overseas markets.

For Chinese enterprises, this kind of globalization is actually a kind of "time is not waiting" growth requirements.

At present, China's own economy is entering a critical period of development. In 2022, the per capita GDP of Chinese will be 85,698 yuan (1270,000 US dollars), and the GDP per capita will reach 3$50,000, more than twice as much as it is now, reaching the level of moderately developed countries;By 2049, according to Lin Yifu, dean of the Institute of New Structural Economics at Peking University, China's per capita GDP will reach $45,000 and become a modern power. At that time, globalization will become the norm for Chinese enterprises and the "standard" for their competitiveness.

This means that far-sighted Chinese enterprises need to carry out the strategic layout of globalization from now on, because this has become a long-term plan related to the long-term development of enterprises and the rise of national competitiveness.

Related Pages