chinese-brands

One fifth of the way into the 21st century it’s already very clear that China will be the biggest economy in the world for this century. Chinese consumers dominate a lot of categories – notably overseas travel, luxury goods purchases and so on.

While a large number of global business have responded to that in various ways, there are still more companies that haven’t yet done anything about it. They’ve not started manufacturing in China. Nor have they started selling to China.

However, this post isn’t about either of these things. It isn’t about leveraging the Chinese population as a cheap labour force or as a vast consumption market.

It’s about recognizing that in the next few years, Chinese companies are going to go from being domestic giants to becoming global behemoths.

We have a few examples already. Huawei, which has been in the press for negative reasons, is clearly in the spotlight because it’s one of the rising stars of China, poised to become a global leader in cell phones (goodbye, Apple). Many moons ago, Lenovo bought out IBM’s computer business and continues to be one of the big global brands in personal computers and laptops even today. Chinese brand Roewe is the metamorphosized Rover brand that reinvented itself with electric cars. Geely bought Volvo to give itself a global platform. Xiaomi, Oppo and others are expanding rapidly across Asia and Africa. China is pioneering high-speed, long distance mass transportation with it’s Maglev and high-speed rail expertise and starting to export that across the world. Many new areas like AI and alternative energy are already dominated by Chinese companies.

We’ve been reading about Apple’s woes in China recently. What happens when Chinese phone and hardware brands innovate themselves ahead of Apple not just in China, but across the world? We saw Japanese and then Korean cars overturn the US car industry and luxury Japanese cars compete with European marquees like Benz and BMW. How long before Chinese brands start to dominate the West?

Preparing your business to survive and thrive in the Chinese century isn’t just about having a strategy for China any more. It’s about having a strategy to counter Chinese competitors worldwide. Some of the keys to that could be:

  1. Having a strong business and consumer base in China to compete with Chinese brands in their homebase and delay their expansion abroad
  2. Evaluating up and coming businesses in China and striking strategic alliances with them early to profit from their international expansion
  3. Leveraging innovations that win in the competitive Chinese market and launching them elsewhere to block a niche in the market before the Chinese originator of that innovation arrives (that’s a polite way of saying learn from and copy the successes of Chinese brands and business models)

All of which sounds very different from how people thought about China when I first got here – 21 years ago. Which makes me think, while this post is all about China and Chinese brands, India is on its way too – perhaps 20 years slower. Be prepared!