Chinese MNCs conquering the world market

Chinese MNCs conquering the world market

In 2014, a group of experts in smart manufacturing, each of them boasting around 15 years of work experience, gathered in a three-bedroom apartment in Beijing and decided to start up Beijing Roborock Technology Co. What was extraordinary was their clear and simple ambition: to develop the world’s best robotic vacuum cleaner. Ten years on, their dream has come true. Roborock is a leading player in its sector and, in terms of global sales in 2023, the top-selling brand among smart vacuum cleaners worldwide, according to Euromonitor International, a market research firm. Roborock has invested over CNY1.9 billion in R&D and established three major research facilities dedicated to AI, electro-mechanical engineering and opto-electronics. Its products are available in more than 170 countries and regions, with nearly half of its revenue coming from overseas markets.

Quan Gang, President of Roborock, summed up the success story. “From day one, our eyes were set on the global market. From the very beginning, we have sought to meet the demands of global users. Our product design, production and marketing efforts have been tailored to meet their demands from the outset.” That helped the startup to remain flexible and nimble while preserving its unique technology. Corporate executives and experts said Roborock is the epitome of new-age Chinese enterprises that see the world as their oyster right from day one. Such companies are quick to recognize that growing globally competitive brands in their respective segments is critical to success these days. They rely on both China’s manufacturing prowess and their own strengths in research and development (R&D). What distinguishes them from the previous generation of globally known Chinese enterprises is their global vision and clarity on goals. While the previous lot went global only when they had grown big enough in the domestic market, the new bunch target the global market from the very beginning, experts said.

Huang Chenhong, President of SAP Greater China, who has witnessed the transformation of Chinese companies in their global expansion over the past three decades, said that “despite challenges such as lackluster global demand and geopolitical uncertainties, Chinese companies have not slowed down their pace of going global.” Chinese enterprises’ outbound direct investment (ODI) grew 5.7% year-on-year last year to exceed CNY1.04 trillion. “I think globalization is now entering a new stage. Globalization today involves more Chinese companies expanding their business overseas,” Huang said. “We can see many enterprises, whether state-owned, private or even small and medium-sized enterprises (SMEs), have 30% to 50% of their business overseas. Some companies are even born to serve overseas markets and have never considered doing business domestically.” Chinese companies have attained a stage of technological innovation where they are starting to embody the spirit of multinational corporations. “In the past, when we talked about MNCs, we thought of German or American companies. Today, Chinese companies come to mind naturally,” Huang said, adding that SAP has helped many Chinese companies such as Lenovo, BYD and Mindray navigate international markets over the past three decades.

The outcome of such spirited forays into global markets is that Chinese brands are becoming well-known and the preferred choices for many consumers worldwide. BrandZ China Top 50 Global Brands report, co-released by Kantar, a market research firm, and Google in 2023, underscored this trend by analyzing perceptions and evaluations of Chinese brands across 11 countries. It disclosed that at least 70% of interviewees were willing to consider more than 90% of the total 234 Chinese brands involved in the research.

Notably, the most significant indicator for domestic brands – being considered “top-of-the-mind” among consumers – grew 7% year-on-year. Chinese brands now significantly influence buying choices abroad. At the top of Kantar’s list is Bytedance’s TikTok, followed by Xiaomi, Lenovo, Shein, Aliexpress, Huawei, Oppo, Haier, Hisense and Vivo. Chinese drone brand DJI ranked 16th and BYD, which makes electric cars, ranked 22nd. Technology and innovation have served as growth engines, powering Chinese brands going global, said Doreen Wang, CEO of Kantar Greater China and global chair of Kantar BrandZ, adding that Chinese brands have made technology and innovation central to brand-building, improved brand competitiveness and enhanced consumer experience, the China Daily reports.