Chinese companies’ average market share in export markets is projected to rise to 31% by 2035 from 18% this year, according to a Goldman Sachs report. The global expansion of Chinese firms was not yet fully reflected in their share prices, but their revenue would grow 3.6-fold by 2035, according to the report, which covered 40 global companies in 11 sectors, including 21 Chinese players and 19 of their global peers. The report said the biggest growth opportunities favor the “latecomers”, including companies in sectors such as robotaxis, e-commerce, surgical robots, clear dental aligners and power equipment, which have the potential to expand their market positions. Conversely, the outlook is less favorable for “early achievers”, including carmakers operating in Europe, who face more mature, contested and potentially price-destructive expansion paths. Consequently, implied revenue could come under greater pressure. The investment bank said sectors such as heating, ventilation and air conditioning, express delivery services, and industrial robots would be the hardest for Chinese competitors to penetrate overseas.
Separately, the biggest share gains by Chinese players have been in emerging markets, followed by the European Union. This year, Chinese companies’ market share is highest in emerging markets at 24%, where their aggregate revenue growth has been nearly 15 times faster than organic market growth. In contrast, their market share is lowest in the U.S. at 10%, followed by the EU at 16%, the report found. In nearly 70% of cases, the Chinese companies entered the international market by pursuing a strategy of “disruptive innovation”, according to Goldman Sachs. This approach meant focusing initially on low-end market segments or emerging markets where demand was price sensitive but usually underserved by the non-Chinese incumbents.
Although the consensus was that Chinese industrial products were more disruptive, Goldman Sachs said consumer products had the highest adoption rate in overseas markets, the South China Morning Post reports.
