Under the background of "promoting high-level opening up to the outside world", EqualOcean will release the "TOP50 GoGlobal Brands in China, 2023" report at the "GoGlobal 100 Forum" in Shanghai in November 2023, and elect the leading goglobal brands in various industries. It will also interpret and analyze their development status, practices and development trends, and sort out the industry chain of goglobal businesses.
This article is a phased presentation of the research results of the report, and sorts out stages of the globalization development of Chinese companies. To learn more about the report and participate in the evaluation of "TOP50 GoGlobal Brands in China, 2023", click the link or scan the QR code at the end of this article.
Looking back to the 21st century, very few Chinese brands went overseas. Although China has long been an important player in global manufacturing, it has only silently OEM for foreign brands. Through learning and imitation, a group of Chinese manufacturing companies have grown rapidly. Since China joined the WTO in 2001, after more than 20 years of ups and downs, Chinese brands have shown increasingly strong competitiveness and influence in the global market.
Although overseas exploration is gaining momentum , according to the Statistical Data of the Ministry of Commerce in 2022, only 567,500 of the 48.42 million Chinese companies go overseas, accounting for 1.2% , and the vast majority of Chinese companies still focus on the domestic market. There is still huge room for development.
Based on the summary of past industry research and EqualOcean's unique research experience , we divide Chinese enterprises' globalization development into the following major stages: the export stage of OEM products after joining the WTO, the overseas M & A stage after the financial crisis in 2008, the global stage of China's Internet and cross-border e-commerce, and the natural globalization stage driven by innovation and brand.
2001-2008: Joined the WTO , OEM became mainstream form
In 2001, China's accession to the WTO rewrote the history of Chinese brands going overseas. In 2000, the Fifth Plenary of the 15th Central Committee of the Communist Party of China clearly put forward the "Going Out" strategy for the first time, and regarded it as one of China's four new strategies , Encourage enterprises to enter the international market and participate in the global division of labor . Chinese enterprises ushered in the first wave of going overseas.
As a latecomer to the international market, Chinese enterprises go overseas mainly by OEM for international brands. At the same time, Haier (海尔,Founded 1984), Hisense (海信,Founded 1969), Huawei (华为,Founded 1987), Lenovo (联想,Founded 1984), TCL (Founded 1981), Midea (美的,Founded 1968), Changhong (长虹,Founded 1958), etc. A group of brands with manufacturing as the core began to emerge in the international community.
Small factories and family workshops During this period, unprecedented development opportunities also emerged, and a number of manufacturing cities known for their industrial agglomeration emerged, such as Jinjiang (晋江，the town of footwear), Yuhang (余杭，the town of clothing), Yiwu (义务，the town of small commodities), Cixi (慈溪，the town of bearings) and other cities.
After joining the WTO, China's total exports increased nearly fivefold between 2001 and 2008, and the total GDP also jumped from CNY 11.09 trillion to CNY 31.92 trillion. At this stage , the main export commodity categories include mechanical and electrical products, high-tech products, industrial manufactured goods and bulk commodities , and a number of leading enterprises have emerged, including mechanical and electrical enterprises Dongfang Electric Machinery(东方电机), jetionsolar(浚鑫科技) the photovoltaic enterprises and Communication technology enterprises such as Huawei .
These private enterprises are mainly responsible for the manufacture of commodity parts and the assembly of finished products. The main export destinations include the European Union, the US, Japan, ASEAN, South Korea, Russia, India, Australia and other countries and regions, relying on manpower and cost advantages to enter the supply chain system of multinational enterprises to achieve export expansion. For example , Goertek（歌尔声学） in Weifang, and Shenzhen AAC Technology（深圳瑞声科技） entered the international market by joining the mobile phone supply chain of Apple and Samsung.
During this period, the characteristics of overseas enterprises were lack of capital and technology, so they could only undertake the assembly work downstream of the supply chain through low labor costs and raw material costs, and temporarily lacked the ability to compete with international enterprises.
2008-2015: Capital in exchange for technology, private enterprises grew rapidly
The period from 2008 to 2015 is an important stage in the incremental improvement of the globalization of Chinese enterprises. Chinese enterprises completed the initial accumulation of capital and technology in the previous stage, and began to acquire technology, supply chain and brand voice through overseas mergers and acquisitions of foreign companies, thereby opening up overseas markets. By 2014, China's overseas investment exceeded foreign investment in China for the first time.
In 2008, under the shadow of the global financial crisis, many international giant enterprises fell into trouble and reduced their foreign investment one after another, and some enterprises were even heavily indebted and on the verge of bankruptcy. Chinese enterprises have gone upstream, acquiring a number of high-value overseas assets through capital operation , overseas acquisitions and mergers and acquisitions , and accelerating the pace of integration with international standards.
The oil, steel , chemical and other industries in the central enterprises led this overseas journey . In 2008, Zoomlion（中联重科）, a construction machinery and equipment manufacturer, acquired CIFA, an Italian concrete machinery manufacturer, and won the production technology , plant base and supply chain of the top three concrete mixer truck manufacturers in Europe and the United States. In 2012 , Sany Heavy Industry（三一重工） acquired Putzmeister, a leading concrete machinery manufacturer in Germany, expanding its R & D, manufacturing and sales network to Europe, America and the Asia-Pacific region.
Private enterprises have also joined this tide. In 2010 , Geely（吉利） acquired Volvo's sedan business, which accelerated Geely's expansion in the international market by learning from Volvo's management experience and sales network. In 2013 , Shuanghui International（双汇国际） acquired Smithfield for about CNY 43.20 billion, transforming it into a global enterprise, setting a record for the acquisition of a Chinese enterprise in the United States that year. In 2014, Anbang Insurance（安邦保险） acquired the Waldorf Astoria Hotel in New York for USD 1.95 billion, Fuhua International（富华国际） acquired the Park Hyatt Hotel in Melbourne for USD 120 million; Lenovo（联想） acquired Motorola Mobility for USD 2.90 billion to obtain more than 2,000 patent assets and more than 50 global operator partnerships and other intellectual property rights license.
In 2013 , the amount of overseas mergers and acquisitions of Chinese companies exceeded USD 10 billion for the first time. In 2015 , China's outbound direct investment reached a record high of USD 145.67 billion, accounting for 9.9% of the global traffic share , second only to the US (USD 299.96 billion) , ranking second in the world for the first time. In the same year , China's outbound investment exceeded the actual use of foreign capital by USD 135.60 billion in the same period , and for the first time realized the net output of capital under the two-way direct investment .
Private enterprises have made a qualitative leap in this stage. From the beginning of the financial crisis in 2008 to 2015, the number of Chinese private enterprises in the world's top 500 increased from 1 to 11, with an average annual growth rate of 40.9%.
2015-2019: Internet and e-commerce formed competitive advantages in global replication
Since 2015, the platform economy dominated by Chinese Internet companies has entered a red sea, and Internet companies that have grown up under China's huge population base and engineer dividends have innate advantages worldwide.
At this stage, China's Internet Tech Giants began to look for growth opportunities. Tencent(腾讯）, Alibaba（阿里巴巴）, ByteDance（字节跳动） , Didi（滴滴） and others seized Emerging Markets by investing overseas or establishing branches. Public data show that by the end of 2016, the number of Chinese mobile Internet overseas companies reached 6,000, and the main overseas products are divided into software tools, entertainment content and audio and video social applications.
Software tools are the most famous GOMO（久邦数码）, Cheetah Mobile（猎豹移动）, Shareit（茄子快传） and Lianshang network（连尚网络）'s wifi master key（wifi万能钥匙）. Among them, Cheetah Mobile's clean master（猎豹清理大师）,security master（猎豹安全大师）, PhotoGrid, Live.me, etc., ranked high in China's overseas A pp list, once had hundreds of millions of users overseas, leading the wave of Chinese Internet tools going overseas.
Entertainment content categories are dominated by mobile games , with game companies such as NetEase（网易）, Tencent, tap4fun, FunPlus, Long Tech（龙创悦动）, Game168, and IGG shining in overseas markets. According to the data of the GPC（中国音数协游戏工委）, Since 2016, the overseas revenue of domestic game manufacturers has exceeded the domestic revenue of overseas game manufacturers. Tap4fun's parent company relies on tap4fun to account for more than 95% of its overseas revenue.
In audio & video social networking, applications such as TikTok, BIGO Live, Newborn Town（赤子城）, Yalla（雅乐）, Coco and litmatch have achieved success in developed countries in Europe and the United States and Emerging Markets such as the Middle East , Latin America , and South East Asia have achieved success . Among them, ByteDance's TikTok has become a phenomenon-level popular application. Since its launch in 2017, MAU users have rapidly exceeded 500 million in two years, leveraging the global short video market; BIGO Live, the global LIVE platform under JOYY Inc（欢聚）, has been in The Kingdom of Thailand since 2016., Vietnam, Indonesia and other countries have been launched, and the number of users has exceeded 50 million in less than a year.
At the same time, cross-border e-commerce is gaining more and more attention. In 2015, the scale of cross-border e-commerce transactions in China reached CNY 4.80 trillion, a year-on-year increase of more than 28%. Among them, the total value of cross-border e-commerce exports was USD 191.548 billion, a year-on-year increase of 43.53%. The working office of the State Council of China issued the "Guiding Opinions on Promoting the Healthy and Rapid Development of Cross-border E-commerce" to further provide policy support for the development of cross
At this stage, the main commodities of cross-border e-commerce are consumer goods such as clothing, shoe and hat accessories, and household products. The main transaction mode is B2C. It is mainly sold to the US, Japan, Germany and Developed countries such as Australia, while Emerging Markets such as South East Asia, the Middle East and Latin America are also concerned by the cross-border e-commerce industry.
The star players of cross-border e-commerce include AliExpress（速卖通）, Gearbest, SHEIN, Zibuyu（子不语）, Ziel（致欧）, Aosom（傲森）, etc. Gearbest After being launched overseas in 2016, it has been listed in the top 30 BrandZ Chinese overseas brands for three consecutive years, ranking second in the e-commerce category, and its overseas revenue exceeded the CNY 4,500 billion mark in 2018. Aosom has set up subsidiaries in 7 countries including the US, Canada, Germany, the United Kingdom, France, Italy and Spain, and has established more than 30 self-operated overseas warehouses, and has stably sold Made in China to more than 10 countries around the world. The independent station has more than four million stable users. Fast fashion brand SHEIN expanded its business to many countries and regions such as Europe, the US, Japan and the Middle East in 2015. In 2019, the number of APP downloads exceeded 100 million, the annual active users exceeded 20 million, and the sales exceeded USD 10 billion.
2019-Present: Innovation and brand-driven born-global companies seeking emerging markets
In recent years, factors such as the energy revolution, digital transformation and the global epidemic have spawned a full-scale outbreak of Chinese companies going overseas. The rise of online consumption and emerging social platforms has driven changes in overseas marketing channels . The energy revolution and digital transformation have spawned a series of industries driven by technology and forming global advantages, including automotive and battery manufacturing, photovoltaic modules, SaaS, etc .
Benefiting from the advantages of Internet genes , technology accumulation, large domestic market and Internationalization talents , many emerging brands have started from the beginning of their birth The layout of globalization and targeting the blue ocean market are considered "Born Globally" . At the same time, in order to seek a step-by-step leap, traditional enterprises have also joined the wave of overseas exploration. "Going overseas" is no longer a niche topic, and China has entered the era of "going overseas with all kinds of industries".
At present , the representative categories in the direction of going overseas include consumer electronics, daily necessities, cross-border e-commerce and automobiles. Among them, the new entrant Miniso（名创优品）achieved a revenue of CNY 2,708 billion in international business in the nine months ended March 31, 2023, an increase of 46% year-on-year. In the first quarter of 2023 , revenue recorded CNY 800 million, and the year-on-year growth rate was 55%, far exceeding 18% of the domestic market. US has become Miniso's single overseas market with the highest revenue for two consecutive quarters. Temu,the cross-border e-commerce platform under Pinduoduo（拼多多）has reached the top of the shopping App list in a very short period of time since it landed in the US market in 2022 , and has maintained an amazing expansion rate since then. It has been launched in 23 countries in less than a year, and ranks among the top of the application list in most countries.
Chinese auto companies are becoming representatives of exporting technology , production capacity and brands to the world , and new energy vehicles have become one of the most concerned tracks in the direction of going overseas. Whether it is traditional car companies such as BYD （比亚迪）, Geely, Dongfeng（东风）, or new car forces such as smart, Xiaopeng（小鹏）,Leading Ideal（理想）, NIO（蔚来）, Neta（哪吒汽车）and other brands, they are actively deploying developed countries mainly in Europe and Emerging Markets mainly in South East Asia and the Middle East . According to data from the China Automobile Association, China's annual auto exports exceeded 3 million vehicles in 2022, surpassing Germany to become the world's second largest auto exporter.
From the layout point of view, China's overseas markets have gradually shifted from Mature Markets such as the US and Europe to Emerging Markets such as South East Asia, the Middle East, South America, and Africa. Data released by Amazon Cloud Technology shows that more than 60% of overseas companies cover more than 3 continents and overseas regions . InfoQ and Vonage conducted a survey of 188 companies, and the results show that South East Asia, the Middle East and South America have become popular destinations for Chinese companies to go overseas. Among them , South East Asia even surpassed North America and Japan and South Korea to become the first choice for Chinese companies surveyed.
Click on the link to learn more about the report or to register for an evaluation, and scan the QR code below to consult with EqualOcean staff.