As its imports from and exports to other nations continue to increase at a dramatic rate, and the Chinese government’s continued efforts to encourage citizens to buy home-grown products are proving successful, can The People’s Republic of China really still be considered as an emerging market?
China’s economy has been growing by an average 10% every year for the last 3 decades, the fastest growing major economy in the world. It is the second largest economy after the USA, and could overtake the United States as early as 2020, according to experts at Standard Chartered Bank.
China is also the largest exporter and second largest importer of goods in the world, and became the world’s top manufacturer in 2011, surpassing the United States.
China mainly supplies goods to the West at low cost.
Chinese people emulate Western lifestyles and want to buy the same brands and products available in Europe and the USA.
When visiting China on business, Shanghai and Beijing are the most important places to go to.
China is already the world’s largest or second-largest consumer of a variety of products, including: cars, consumer electronics and internet use.
Chinese consumers are increasingly choosing domestic brands such as Tsingtao, Midea, and China Mobile.
There is significant growth in the regional cities, which are largely untapped by Western companies launching in China.
Adoption of new technology across East Asia is generally fast – Chinese citizens tend to leapfrog technologies that have previously become the norm in the West (such as Video, landline telephony and dial-up internet), and move straight on to the most recent developments such as 3G smartphones and high-speed broadband.
Western companies aren’t fighting just for a position in the Chinese market—they’re also fighting to forestall potential competitors in other emerging markets, and the battle will eventually come to them on their own turf.
So where are the opportunities? (i.e. What do the Chinese not have covered?)
Automotive, Healthcare/pharmaceuticals, Life Sciences, Education, Financial Services and Luxury Goods are all growth sectors for UK companies seeking to do business with China. US companies have also had a lot of success exporting food, amchinery and metals there.
How do multilinational corporations take advantage of these opportunities?
- Move quickly – the rise of domestic competitors will happen faster than most Western companies expect. Local companies such as Xizi (elevator manufacturers), 7 Days Inn (budget hotels), and Midea (consumer appliances) have already become leaders in these high-growth markets.
- Have a presence in multiple locations – China has more than 100 cities with populations of over 1 million. Companies who want to be successful there must consider these as well as the Megacites of Beijing and Shanghai.
- Prepare for extraordinary growth in demand. Some Western companies today are struggling to handle 35% annual sales growth in China—but the industries they’re involved in are growing at 60%
UKTI is a great source of advice on trading with China, or any other country. If you need language support to launch in China, drop us an email at sales[at]web-translations.co.uk
12 July 2011 14:32