Text: Wu Qing.
Editor's note: Nearly 100 years after Zheng He's voyage to the West, from the 15th century to the 17th century, Spain, Portugal, the Netherlands, Britain and other countries launched a series of maritime operations, and adventurers such as da Gama, Columbus, and Magellan found a sea route for Europe to reach the East, discovered the American continent and circumnavigated the world through ocean voyages. Since then, the continents and civilizations of the human world have been connected by the ocean. This meant a wider market and endless wealth for Europeans, and Western products and culture began to prevail around the world, thus ushering in an era of Western civilization that has lasted for hundreds of years.
I remember 10 or 20 years ago, we used Nokia Apple mobile phones, installed Microsoft Windows and Google Android systems, drove Toyota Honda and Volkswagen Mercedes-Benz cars, had a McDonald's KFC and were quite happy, most of the hot movies in the cinema were Hollywood blockbusters, and our lives were wrapped in European and American products. At that time, we should not have thought that today, more than ten years later, China's products can be "the best in Europe, America, Japan and South Korea, not only clothes, shoes and socks, but also high-tech products such as mobile phones and cars; There are not only hardware tools, but also various software apps; For the first time, Chinese products and culture have begun to penetrate into the people of Europe, America, Japan and South Korea.
Nowadays, the daily life of a European and American user may be like this: driving a BYD new energy car to work, a Glemei air conditioner installed at home, Haier Hisense TV, using Huawei Xiaomi OV (OPPO and vivo) mobile phones to play **, swiping tik tok entertainment to relax, on temu, AliExpress shopping hard, and then play Tencent's chicken and miHoYo's "Genshin Impact" game, and then look at the Chinese online articles and skits of "The domineering president falls in love with me".
In the past 2023, China's vehicle exports will be 4.91 million units, a year-on-year increase of 579%, ranking first in the world for the first time; At present, the share of Chinese household appliances in the world's largest household appliances is as high as 38%, and it has been ranking first in the world for many years; Three of the top five mobile phone shipments in the world are Chinese brands, and seven of the top ten are Chinese brands; Also popular are various apps, online articles and games in China.
According to SensorTower data, in the first quarter of 2023, among the top five apps in 95 countries and regions around the world, 156 (accounting for 33) are Chinese apps, and the top four apps in the United States are all Chinese apps, namely: Temu, TikTok, Capcut, and Shein. China's apps and technologies going overseas are quietly opening up a new way of life and consumption in Europe and the United States.
From the world's No. 1 automobile export, to the popularity of short dramas in North America, to the overseas cross-border e-commerce conquest overseas, from Internet application companies to digital infrastructure, overseas enterprises and products are becoming more and more diversified; In the overseas market, from Southeast Asia, Europe and the United States in the past, to the emerging Middle East, Africa and Latin America, it has blossomed everywhere. The "Age of Discovery" of Chinese enterprises has begun, and the wave of Chinese enterprises going overseas has swept in, forming an unstoppable new trend.
And all this is happening, perhaps just at the beginning. In this issue of business cases, the reporter of "China Business News" will work with you to ** the roots, changes, characteristics and trends behind Chinese enterprises and products going global.
Metamorphosis
Introduction, going out, and then being born global
In January 2019, Alibaba founder Jack Ma went to Europe to attend the Davos Forum, he went to a restaurant to invite friends to dinner, and when he paid the bill, he accidentally found that he could swipe Alipay, and a smile suddenly appeared on his face.
Ant Group's "curve going overseas" represented by Alipay is quite typical: it is characterized by a local team + China model, such as investing in the Indian version of Alipay Paytm; Launch local e-wallets with partners, such as the Indonesian wallet dana. Bringing out China's proven effective business model and successful experience has become the epitome of Chinese enterprises going overseas at that time.
From the early "three to one supplement" to the later various foreign trade exports, after the reform and opening up, Chinese products began to gradually go global. However, in the real sense, the success of Chinese enterprises going overseas is after the opening of the mobile Internet era. Tencent founder Ma Huateng once said that the mobile era has given Chinese Internet companies a new opportunity for internationalization, because the global Internet giants in the PC Web era have not yet made global products suitable for the mobile era.
Before they really go global, Chinese companies start by imitation. More than 20 years ago, a group of pioneers moved the model of Google, Yahoo, eBay and Amazon to China, and founded the first batch of Chinese Internet companies such as Sohu, NetEase, Sina and Alibaba. Nowadays, foreign companies have begun to learn from Alibaba, Tencent, and ByteDance, and their roles have quietly reversed.
Around 2010, the first wave of Internet going overseas in China arose, and representative enterprises such as Jiubang, NetQin, UC, and Cheetah seized the first wave of the mobile era and quickly laid a foundation for overseas products by relying on tool products.
But use the scenario sheet.
1. Pure tool applications with lack of user stickiness and high substitutability, highly dependent on platforms such as Google and Facebook, will usher in a cliff after the platform has been ruthless in these tool applications that focus on monetization and are full of ads.
Before 2015, BAT (Alibaba and Tencent), which had become giants, embarked on their first internationalization journey. Search, Tencent's social networking, Alibaba's e-commerce, but at that time it was not able to gain a firm foothold in the international market. "Technology introduction + model copy + micro-innovation" was difficult to hold up the high hopes of many enterprises to go overseas at that time.
Around 2017, with the rise of the second wave of going global, Chinese companies have rapidly evolved from imitators to innovators in the fierce competition, and a large number of platforms have copied their business models that have been trained and run through China's huge market overseas. SoftBank's founder, Masayoshi Son's time machine theory, is enshrined, that is, to copy the models and experiences of developed regions to untapped markets, and to achieve "dimensionality reduction" like time travel.
Many voices believe that the era of "copy to China" is over, and the era of "copy from China" has come.
In China's ** recruitment market, BOSS Zhipin has triggered a "revolution" to achieve two-way matching between recruiters and job seekers. Zhou Haibo, who used to be the president of Dajie.com and the co-founder of Maimai, launched the ** recruitment platform KUPU in Indonesia, and said bluntly: KUPU is to be the Indonesian version of BOSS Zhipin.
It is equivalent to writing a middle school essay question after you pass the college entrance examination, although you can't copy the answer directly, but you will believe in yourself, can't you even answer this question? Zhou Haibo said with a smile.
Grocery shopping at home, scanning the code to shop, scanning the code to take the car, ......These familiar lifestyles of Chinese have rapidly spread to the world in the past few years as the pace of Chinese companies going overseas has accelerated.
Today, after completing the key leap from "copy to China" to "copy from China", Chinese enterprises are completing the transformation of "born global". This represents two very different ideas, the first two are inside-out, China-led thinking, and globalization is global-oriented from the moment it is born.
Different from BAT, nearly ten years after the establishment of the company, it began to carry out the journey of internationalization, and the birth of ByteDance, Meituan, and Didi in the mobile Internet era has been promoting internationalization from the beginning.
TikTok is a typical example of globalization: it has been committed to "global vision + localized operation" from the beginning, so that TikTok can avoid the problem of water and soil discomfort. DataAI data shows that TikTok has more than 1 billion monthly active users, replacing Google as the world's most trafficked Internet platform.
In addition to giants, more and more start-ups in China are inherently global. According to the statistics of Amazon Web Services, among the enterprises that have gone overseas in China, large enterprises account for 63%, and small and medium-sized enterprises account for 37%; Among the enterprises planning to go overseas, 35% are large enterprises and 65% are small and medium-sized enterprises. Especially in industries such as games, e-commerce, developer services, SaaS and hardware, and mobile phones, more and more start-ups have been in the direction of globalization since birth.
Transsion mobile phone, which was born in Shenzhen, is a "small and transparent" in China, but it is an out-and-out "national mobile phone" in Africa. Many people have never heard of the Shanghai-born J&T Express, but it is almost well-known in Southeast Asia.
In addition to the main force of the Internet, the scientific and technological background of Chinese enterprises going overseas is also getting stronger and stronger, and the technical content is constantly improving.
In the global semiconductor display industry, Chinese companies also occupy a leading position. Statistics show that one of the four smart display terminals in the world comes from BOE. At the same time, China's civilian drone industry accounts for nearly eighty percent of the global market share, and in the field of consumer drones, DJI drones occupy about 70% of the global market share.
While China's export commodities have completed the structural upgrading of primary products to mechanical and electrical products and high-tech products with high technical content, Chinese enterprises have completed the iteration from product output to business model output and technology output in the past few decades.
Traceability
Internal force enhancement and spillover expansion
The question then arises, how can Chinese corporate brands complete the butterfly change from imitation to output to leadership in just over a decade?
Tracing back to the source, it is the significant enhancement of China's economic and cultural comprehensive strength, as well as the rapid improvement of the competitiveness of Chinese enterprises. China, with its huge population and market scale, has become the best training ground and source of models and methods for global enterprises in the past ten years.
As of June 2023, the Chinese population is 14100 million people, the scale of Chinese netizens reached 107.9 billion people, with an Internet penetration rate of 764%。In terms of the number of Internet users, the scale of e-commerce transactions, and the scale of mobile payment, China ranks first in the world. In terms of the number of consumers, China has always been the world's most populous country, and at the same time has a large number of middle-class consumer groups; From the perspective of the scale and development speed of the real economy, China is already the second largest country in the world economy, the world's largest country in goods, the world's largest manufacturing country, and the only country in the world that has all the industrial categories listed in the United Nations Industrial Classification.
In the Chinese market, the abundance of scenarios that can be provided for entrepreneurs and the fierceness of competition between enterprises can be called the world's. It has also cultivated many successful products and models, as well as a large number of mature practitioners, including venture capital teams, technology developers, product designers, marketing personnel, etc. All these have laid a solid foundation for Chinese enterprises to go overseas.
At present, the successful overseas models that have become large-scale mainly include traditional foreign trade, APP, games, cross-border e-commerce, etc. The essence of the success of these models lies in the potential energy of China's accumulated capability elements, such as business model, manufacturing, technology research and development, operational experience, artistic creativity and outstanding talents, etc., to the spillover and landing of the target country's market, restructuring and innovation). Chen Shi, investment partner of FreeS Capital, told reporters.
However, there are two sides to the coin, and behind the huge transaction scale and high network penetration, it means that the room for growth is limited; Behind the endless micro-innovations and prescriptions, what is highlighted is the intensity of involution and confrontation of Chinese enterprises.
It is generally believed that in recent years, the acceleration of Chinese enterprises to go overseas has been driven by two forces: the "thrust" of the peak growth rate of the domestic market, the domestic Internet industry after years of rapid growth and fierce competition, there are signs of slowdown around 2013, the population and traffic dividends have peaked, the pattern of giants is basically finalized, and it is difficult for small and medium-sized companies to find new development opportunities; The "pull" of overseas market potential, Southeast Asia, the Middle East, and even Europe and the United States still have more Internet demographic dividends, and the rise of emerging markets, new channels, and new markets has opened up the imagination space for those who go to sea.
Taking the online shopping population as an example, as of June 2022, the scale of online shopping users in China is 84.1 billion, down 1.53 million from the end of the previous year, with a penetration rate of 80% among overall Internet users. Comparatively speaking, the retail e-commerce penetration rate in Southeast Asia in 2021 was less than 5%, much lower than that of China, making it one of the fastest-growing regions in the world.
In the context of the domestic traffic dividend has been nearly exhausted, there are no more than several ways for Internet technology companies to break the situation: upward, break through hard technology; downward, dig deep into the sinking market; inward, improve quality and efficiency; Outward, global. Only by going to sea can we conquer cities in a broader market and obtain the dividends of globalization. Zhang Yiming said: "China's Internet population only accounts for 1 5 of the world, and if you don't allocate resources globally, you can't compete with 4 5, so it is inevitable to go overseas." ”
There is another important factor that cannot be ignored here, that is, the international environment and national policies are vigorously promoted by Chinese enterprises going overseas.
On September 27, 2019, the "China and the World in the New Era" released by the Information Office pointed out that "China contributes to building a better world", making going overseas a new choice for many enterprises.
First of all, China's international status and influence have been significantly enhanced. ** It was mentioned that China has made many friends in the international community, has established diplomatic relations with 179 countries, and established 110 pairs of partnerships in various forms. Since the 18th National Congress of the Communist Party of China, China has put forward the initiative of building a community with a shared future for mankind and jointly building the Belt and Road Initiative, which has been included in a number of United Nations resolutions and has been widely recognized and positively responded to by the international community. In addition, since the reform and opening up, China has actively followed the trend of globalization, "invited in" on a large scale, and made great strides to "go out".
From a policy perspective, the "Proposal of the Communist Party of China on Formulating the 14th Five-Year Plan for National Economic and Social Development and the Long-term Objectives for the 235th Five-Year Plan" proposes to accelerate the construction of a new development pattern with the domestic cycle as the main body and the domestic and international dual cycles promoting each other. In January 2022, 9 departments, including the state, issued relevant opinions, proposing to support platform enterprises to promote digital products and services to "go global", enhance their international development capabilities, and enhance their international competitiveness.
In line with the trend of economic globalization, Chinese enterprises can seize the important opportunity of economic globalization, promote Chinese brands to the world, and export "soft power". Overseas markets are being seen by Chinese companies as the key to opening up the "second growth curve".
Voyages
The opportunities of the times and the rebirth of transformation
The sea is a transoceanic voyage, and the prospects on the other side are vast, but the changeable weather, huge winds and waves, and invisible reefs hide all kinds of risks. Especially today's Chinese enterprises going overseas, the environment is already different from many years ago, the international geopolitical situation is becoming more and more complex, and the overseas market has also begun to "roll".
TikTok, which is the vanguard of China's overseas expansion, was suddenly banned in the United States, India, Indonesia and other countries; Xiaomi, vivo and other mobile phone brands in the Indian market and the collective removal of Chinese apps; Huawei, Hikvision and other Chinese high-tech companies have encountered chip bans and various ...... of repressionThese aspects highlight the complex environment and huge challenges faced by Chinese enterprises going global.
After graduating from university, Liang Tong has worked in the foreign trade industry for nearly 20 years, and is now in charge of related business in a overseas service company, witnessing the progress and difficulties encountered by Chinese enterprises in going overseas in recent years. "In the past, Chinese companies were still small and transparent and petty in the eyes of international giants, but now they think that Chinese companies are strong enough to be taken seriously and taken seriously; At the same time, China's chips, AI and other industries that are striving to break through have touched its core interests; And the rapid expansion of Chinese companies in the global market has even frightened them. Liang Tong told reporters.
In fact, Chinese companies are not only testing in the marginal market, but also penetrating into mainstream markets such as Europe, America, Japan and South Korea; It is not only at the end of the industrial chain such as processing and sales, but also in the upstream and downstream of the industrial chain such as core technology research and development, software services, etc., which makes the multinational giants who have been lying to win for many years feel great pressure.
However, while developing by leaps and bounds, Chinese enterprises are still facing problems such as partial breakthroughs and partial development, and the gap between the internationalization of Chinese enterprises and international giants is still obvious.
At present, the globalization of Chinese brands as a whole is still in its infancy. Although China has surpassed the United States in terms of the number of Fortune 500 companies on the list (ranked by revenue), the number of Chinese companies on the list is only about a quarter of that of the United States in terms of brand value that can create higher profits.
U.S. technology companies account for 55 percent of their overseas revenue86 percent, while Tencent and Alibaba, the leaders of Chinese companies, accounted for less than 10 percent of international revenue. Compared with European and American countries, the number of global well-known brands in China is still small. At the same time, Chinese enterprises going overseas will face more and more challenges such as geopolitics, regulations and policies, protection and localization.
Although the challenges are stressful, many practitioners in the overseas industry interviewed by the reporter are not too anxious. Liang Tong believes that the complex geopolitical environment and various emergencies will dissuade some people, but those who really want to go overseas are still insisting, because whether it is from the actual performance pressure of the enterprise or the long-term development, going to sea is the only way.
For entrepreneurs, the attraction of going overseas is still huge, and from the perspective of industrial development, it is still a good time to go to sea. Since the rise of the first wave of going to sea, the predecessors have built good infrastructure for Chinese people to go to sea, including payment and logistics, and have also accumulated rich models and experience in going to sea, and the ecology of going to sea has gradually matured.
Chen Shi believes that in the future, enterprises going overseas need to strengthen team capacity building, jump out of the inertia of traffic thinking and escape from the cost-effective Red Sea, and need to complete the transformation from the previous light mode of the "Air Force" to the heavy mode of "Marine Corps" in terms of play, so as to ensure the "landing" of the business and team. Only by going overseas on the basis of in-depth localized operation and deep market insight can we have broader development prospects.
After more than ten years of journey, when going to sea and entering the second half, "instead of being tired of dealing with various emergencies and thinking about what is changing, it is better to think about what is unchanged." Liang Tong believes that for the technology Internet industry, continuous R&D investment and model innovation are the key, and the ultimate implementation is also the key.
Chinese companies have unique advantages from an international perspective, with core competencies in innovation, operations, products, integration, connectivity and talent. Optimistic about China, Chinese, and thousands of Chinese entrepreneurs around the world. Ye Daqing, co-founder, chairman and CEO of Rong 360, said that thinking globally and acting locally is a protracted battle, and it is necessary to keep the world in mind and adapt measures to local conditions.
The recent rapid rise of TikTok, Temu, etc. shows that in the future, the overseas market is likely to give birth to a new batch of BAT. In the era of digital exploration, Chinese enterprises are setting sail and sailing towards a broader sea of stars.
Observe
Relocate the position in the global axes
At that time, most of the destinations of China's going to sea were neighboring countries, such as Japan, Korea, Southeast Asia, Arabia and other regions, and the foreign trade commodities exported were mainly silk fabrics, ceramics, ironware, etc. Compared with imported products, the technical and cultural content of China's exported commodities is relatively high, and a unique circle centered on China has finally been formed.
Nowadays, going overseas has entered a new stage, and its characteristics are not only complete, but also the products covering all kinds of products, hardware, tools, games, e-commerce, cloud computing and other categories; It is also wide, and the sea radius has expanded from the "near sea" of Southeast Asia and the Middle East to the "ocean" of Europe, America and Latin America; Even higher, many overseas companies are born global, and from the very beginning, they have focused on creating a truly global product or service.
Behind this transformation is the great progress of China's economy, the leap in national strength, and the rapid improvement of the competitiveness of Chinese enterprises and products. It is the internal impulse to further expand and upgrade under the pressure of peak flow; It is a natural spillover of strong industrial capabilities, models and technological innovations, and experience.
After years of going overseas dividends, the overseas market has also rolled up. Nowadays, when enterprises go abroad, it is like a game, and it has become a difficult mode to use up the "welfare package" of the novice village. In the face of a very different market environment, it is indeed not easy to win in the fierce competition. Internationalization is destined to be a difficult process of transformation and upgrading.
Looking back on the history of Chinese enterprises going overseas, it is not difficult to find that Chinese enterprises are struggling to develop all the way, and have been striving to climb to the upstream of the global value chain: from the tool applications led by Cheetah and UC to go overseas, to the Internet business models that have been verified locally, and then to the technologies and services that have gone overseas.
At the beginning, it anchored itself in the global coordinate axis, and it is becoming a new realm for Chinese enterprises to go overseas, because in history, the truly great enterprises are all global enterprises without exception. To this end, many enterprises have deployed operation and R&D teams overseas at the beginning of their business, and even set up their headquarters directly overseas.
After all, no country accepts that foreign companies only want to make money and grab the market, but hope to bring technology, employment, industrial upgrading and even a complete industrial chain. Born global, not self-centered expansion and arrogance, nor simply copying domestic business and resources in the past, but researching, respecting and serving the local, has become the consensus of more and more Chinese enterprises going overseas.
Japan, which is also located in East Asia, has brought us a good reference, the proportion of Japan's manufacturing industry going overseas has dropped from 70% in the early 90s of the 20th century to 40% after 2012, and most of them are concentrated in high-end manufacturing such as semiconductors and automobile manufacturing, while the proportion of service industry has risen to 60%. It can be said that in the 30 years that the Japanese economy has lost, it is the rise of high-end manufacturing and services going overseas that has made up for the lack and weakness of the domestic economy and maintained the competitiveness of the Japanese country and enterprises.
Why is it that the status of the American superpower remains strong despite being challenged? In the final analysis, it is because it has a large number of excellent global companies and products: Apple's mobile phones and computers, Microsoft's system software, Google's system maps, Meta's social products, Nvidia Intel's AI chips, Tesla's general motors, McDonald's and Starbucks all over the world, and Hollywood blockbusters ...... that are popular all over the worldIt is they who occupy the food, clothing, housing, transportation and minds of users around the world, and maintain the super "hegemony" of the United States.
Going overseas is a manifestation and result of the diffusion of China's economic and cultural influence to the outside world, and it is a deeper export of civilization. Set sail to the sea, bring technology, experience and opportunities to the locality, and at the same time, realize its own benign expansion and upgrading; While building more circles of interest and friends, it is becoming a new goal for Chinese enterprises to deeply involve and even reconstruct the global industrial and technological power map. This is not only the only way for Chinese enterprises to survive to grow and then to greatness, but also the inherent responsibility and mission of Chinese technology enterprises.
The articles in this edition were all written by Wu Qingcai, a reporter of this newspaper