“Little Giant” enterprises have become a new force for Chinese brands to go global.
China’s foreign trade data showed a positive trend in the first four months of this year, further increasing to 5.7% on the basis of a 5% growth in the first quarter. However, there is a certain “temperature difference” between the micro perception and macroeconomic data of many foreign traders.
Tu Xinquan, Dean of the China World Trade Organization Research Institute at the University of International Business and Economics, proposed that from the perspective of foreign trade, the main reason for the “temperature difference” is structural changes. In recent years, with the gradual increase in production costs in China, the relatively simple and easy forms of foreign trade in the past may become fewer and fewer. This has prompted more companies to actively explore the market, invest in product research and technological innovation. “This will be even more difficult for enterprises, requiring greater effort and correspondingly higher risks.”
This structural change corresponds to the advancement of Chinese manufacturing from order based OEM to R&D innovation and branding, as well as the increasing position of Chinese brands in the global value chain.
“Little Giant” Becomes a New Force for Going to Sea
At the China Brand Day event launched in Shanghai on May 10th, the Shanghai Robot Industry Association, together with leading companies in the field of robots such as Jieka Robotics, appeared in the newly added special exhibition area this year, marking the first time the event has opened a robot special exhibition area. These “little giant” enterprises have become a new force for Chinese brands to go global.
“In recent years, our overseas business has doubled every year.” As the person in charge of overseas business and global market operations, Chang Li, Executive Vice President of Jieka Robotics, told First Financial that the trust of overseas customers in new brands needs to go through a difficult process. But once the negotiation is successful, the other party will focus on the product itself and will also give Chinese manufacturing the qualification to compete in quality. Among them, European and American users have strict requirements for the performance testing of robots, such as achieving limits on speed and load that cannot be achieved in actual use. This also means that what can be ultimately left behind through layer by layer screening must be of extremely high quality, and Chinese manufacturing has such confidence.
The foreign trade data for the first four months shows that China’s exports of mechanical and electrical products reached 4.62 trillion yuan, accounting for nearly 60% of the country’s exports, a year-on-year increase of 6.9%. Among the 12 key export commodities of mechanical and electrical products listed by the General Administration of Customs, 11 have achieved positive growth. Among them, automatic data processing equipment and its components and integrated circuits increased by 9.7% and 23.5% respectively, exports of automobiles (including chassis) increased by 24.9%, ships increased by 108.4%, and exports of household appliances increased by 16.4% year-on-year. In addition to electromechanical products, the export of labor-intensive products also maintained a growth rate of 6.9% in the first four months.
Zheng Mingju, Managing Partner of the Retail and Consumer Goods Industry at Ernst&Young Greater China, believes that the advantages exhibited by Chinese consumer goods companies in the international market mainly come from cost control, product diversification, a complete and flexible supply chain, improved innovation and intelligent manufacturing capabilities, and rich online marketing experience. However, companies also face many challenges when going global. For example, cultural differences, market competition, laws and regulations, and talent development. It is recommended that Chinese enterprises strengthen international cooperation, while utilizing digital marketing tools and social media platforms to expand diversified sales and marketing channels, strengthen independent brand building, and enhance brand awareness and market coverage.
Leveraging cross-border e-commerce and regional integration
With the development of cross-border e-commerce, a large number of small and medium-sized enterprises are accelerating the pace of brand going global.
Zheng Zhikun, General Manager of E-commerce Business at PingPong, a global cross-border payment company, said that in the past decade, China’s supply chain has been on the path of online and technological transformation. With the development of the market, the transformation of the supply chain has become more urgent. They can see in the frontline market that many enterprises engaged in traditional trade, especially low-end products, are transforming and upgrading towards both ends of the smile curve.
As the first cross-border e-commerce pilot zone in China, the person in charge of cross-border e-commerce at the Hangzhou Bureau of Commerce told First Financial that foreign trade enterprises in Zhejiang, especially in Hangzhou, have strong brand awareness and are therefore more willing to directly reach the consumer end through cross-border e-commerce platforms like Amazon.
At the first batch of Yangtze River Delta international brand innovation case releases and the Yangtze River Delta brand internationalization development seminar held on May 8th, 30 brand innovation cases including NIO, Shanghai Institute of Nuclear Technology, Baosteel Group’s Magang Materials, China National Building Materials International, and iFLYTEK were selected, covering multiple fields such as advanced manufacturing, modern service, and cultural and creative industries.
As the Director of the Expert Advisory Committee for International Brand Innovation Case Collection in the Yangtze River Delta, Yan Haifeng, Vice President of East China University of Science and Technology, stated that the Yangtze River Delta must further strengthen the development of international brands, promote the high marketization, high quality, and high value development of the Yangtze River Delta economy and domestic and foreign economies. Undoubtedly, the development of international brands in the Yangtze River Delta is facing corresponding challenges. It is recommended that the Yangtze River Delta accelerate the formation of a system and mechanism suitable for its own brand economy development, strengthen policy coordination, and adhere to promoting regional community construction through branding and internationalization.