With the new opportunities brought about by globalization and the further saturation of the domestic market, in recent years, Chinese enterprises have rapidly increased their popularity overseas, becoming a new outlet for entrepreneurship and the second growth curve of enterprises. In terms of scope, the overseas market gradually expands from near to far. From the traditional Southeast Asian market, to the mature North American, European and Australian markets, to the emerging South America, Africa and the Middle East, you can see the presence of Chinese emerging companies and innovative products.
The new round of going to sea presents new features:
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From products going overseas to technology going overseas, brand going overseas, and then trying to go overseas with ecology, the forms of going overseas are diversified;
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From ToC to the rise of ToB, the overseas service industry is thriving and has been favored by capital;
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From large enterprises mainly going overseas to the rise of small and medium-sized enterprises going overseas, the "specialized, special and new" small and medium-sized enterprises with strong innovation capabilities have performed well;
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It has strong digital attributes, and the two forms of digitalization and digitalization are intertwined.
Currently, security compliance is the top priority for Chinese companies going overseas. With the strengthening of data and privacy supervision in various countries around the world, countries have improved their legislation and supervision. In addition, geopolitical risks, intellectual property risks, legal risks, exchange rate risks, internal control risks, etc., may all become headwinds during the voyage. Improving the ability of localized operations is an important factor for "Zhiyuan".
"Fortune" conducted a systematic inventory of overseas companies worthy of attention in 2023: in the seven most popular tracks at the moment, including pan-entertainment, e-commerce, corporate services, medical care, new manufacturing, smart hardware, automobiles and automotive technology , Selected those companies that are constantly exploring new fields, making new breakthroughs, and growing in influence.
Track 1: Pan-entertainment
Quickly copy China's successful experience to new markets
On the bustling streets of Ginza, Tokyo, young Japanese turn on their mobile phones to play "Original God"; under the Petronas Twin Towers in Kuala Lumpur, Hago has become a must-have social and interactive game software for locals; in Bangkok, Thailand, local Chinese have also begun to follow iQiyi Homemade dramas on the Internet; beside the pyramids in Cairo, locals use Boomplay to listen to songs and Vskit to watch short videos.
These products, without exception, are Internet products from Chinese companies. Most of them are not well-known to domestic users, but there are a group of loyal users overseas. Among the many overseas tracks, the pan-entertainment track represented by online games, social media, live broadcast, and short videos is undoubtedly the field with the most intense competition and the most frequent product updates. Compared with "big brothers" like WeChat and TikTok, cutting-edge companies and products in this field should not be underestimated.
In the field of audio and video, compared with the mature markets in China and the United States that are dominated by giants, emerging markets such as Southeast Asia, Latin America, the Middle East, and Africa are still a blue ocean. The attention economy in these regions is in the ascendant and the market is vast. There are more than 500 million Internet users in Southeast Asia alone. It is easy for Chinese companies to quickly complete the accumulation of original users from 0 to 1 with products tailored for the local area.
On the web text track, Dreame APP has been dominating the sales list of web text apps in overseas app stores all the year round. This is also due to the high maturity of the Chinese web text market and has accumulated rich experience for developers. GoodNovel, a subsidiary of Xinyue Technology, has increased its efforts in the US market, and its revenue has grown rapidly. China Literature, which is backed by Tencent, should not be underestimated. Its users cover more than 200 countries and regions, and it has also trained about 340,000 overseas online writers.
Chinese game companies are also targeting overseas markets, partly because the tightening regulation of the domestic game market has stimulated a large number of Chinese game companies to go overseas to survive. Considering the huge size of the two major game markets in the United States and Japan and the mature payment habits of users, domestic game companies can successfully break through with one or two hit games.
Obviously, overseas business has become the second growth curve for the steady development of Chinese game companies. In view of the improvement of Internet infrastructure in emerging markets such as Africa, Southeast Asia, and South America, from WIFI access to 4G network or even 5G network, the scene of mobile Internet users blowout and product sinking in China ten years ago is expected to be staged in these markets. For Chinese innovative companies with fast experience and product updates, it is still a huge blue ocean market with high certainty.
Track 2: E-commerce and retail ecology
Supply chain advantage converted into price advantage
Contrary to the situation of going overseas in the pan-entertainment track, the overseas market concentration in the field of e-commerce and retail ecology is relatively high, and the logistics and tariffs are complicated. However, Chinese companies still choose to go overseas. The reason is quite special.
Pinduoduo launched Temu overseas. Relying on the "extremely low price" price war, in less than half a year, the download volume has exceeded 24 million times, and the monthly active users of the platform have exceeded 11 million. new changes.
The rise of SHEIN, a Chinese clothing platform from Nanjing, is a classic case of "crushing" opponents with low prices. SHEIN is regarded as ZARA in the era of e-commerce, relying on "low price + fast fashion" to quickly become one of the most popular e-commerce platforms in the United States. In 2022, SHEIN's platform sales will exceed US$29 billion, and its net profit will be close to US$1 billion, making it one of the largest unicorn companies in the world.
However, the lack of localized and efficient logistics systems and payment channels is one of the main shortcomings restricting Chinese e-commerce platforms from going overseas. This pain point has also been converted into a business opportunity. Considering the efficiency of overseas logistics and the payment habits of netizens, domestic and foreign bilateral licensed payment companies Lianlian International and PingPong, and cross-border e-commerce logistics companies Zongteng Group have taken advantage of the trend. Independent website building platforms including ShopLine, as well as cross-border ERP services such as Dianxiaomi, are taking advantage of this wave of e-commerce going overseas to seek gold in overseas markets.
From a geographical point of view, the Southeast Asian market, which has deep cultural and trade ties with China, used to be the main position for Chinese e-commerce to go overseas. With the success of SHEIN and Temu in the US e-commerce market, a new door for Chinese manufacturing to enter the US market has been opened.
Track 3: Enterprise Services
From "big and complete" to "small and beautiful"
In the new wave of going overseas, companies providing enterprise-level services have emerged as the times require. Some of them serve Chinese companies going overseas, and some directly serve overseas local companies. The business covers network security, open source database, advertising and marketing platform, human resources service, legal service and other fields, forming an overseas service ecology.
Network security threats are a global challenge. Qi Anxin has the world's leading APT (Advanced Persistent Threat) tracking and analysis capabilities, and its overseas business is developing rapidly.
PingCAP, an enterprise-level open source distributed database manufacturer, has adhered to the globalization strategy since its inception. In overseas markets, it has provided services to more than 3,000 companies in countries and regions including the United States, Europe, Japan, and Southeast Asia, involving finance, operators, Manufacturing, retail, Internet, government and many other industries.
Personal privacy issues are also receiving more and more attention in various countries. The new Apple APP Store regulations implemented in July 2022 emphasize that users must be allowed to delete accounts and related data in the APP, and this function needs to be set in a position that is "easy for users to find" .
With the acceleration of the pace of Chinese enterprises going overseas, enterprise-level services will become a more popular track. For example, Tuya Smart, the world’s number one IoT PaaS provider in terms of shipments, has more than 647,000 developers in more than 200 countries and regions around the world; Mobvista and Feishu Shennuo provide overseas marketing services; Chenhai Group provides global compliance Services; Career International provides human resources and related SaaS services; Yingyun Technology provides open source IoT basic software services, etc.
Track 4: Medical and Life Sciences
Going to sea is a must to get out of trouble
On the one hand, pharmaceutical companies face a growing market in the context of an aging global population, rising prevalence of chronic diseases and rising expectations for healthcare. On the other hand, for Chinese pharmaceutical companies, the country is facing the pressure of centralized procurement, and encounters the double-sided attack of cost increase and price reduction. Therefore, going overseas has become a must for pharmaceutical companies to seize opportunities and get out of difficulties.
Pharmaceutical companies must seek progress if they want to get rid of adversity. There are only two ways out: one is to continuously upgrade technology and reduce costs; the other is to develop new products with high added value, that is, to develop innovative drugs.
BeiGene, WuXi AppTec, and Mindray Medical are the three leading companies in China's healthcare sector. Among them, BeiGene is the first Chinese biotechnology company listed on Nasdaq, Hong Kong Stock Exchange and Shanghai Stock Exchange Science and Technology Innovation Board. The company focuses on hematological tumors, solid tumors and other fields. WuXi AppTec announced the construction of a new base in Singapore, planning to invest about 2 billion Singapore dollars in project construction in the next ten years, officially joining the ranks of Nuggets in Southeast Asia.
In 2022, Mindray Medical's overseas revenue will stand at the 10 billion mark, reaching 11.698 billion yuan, continuing the growth trend. This will also become the first year for Mindray Medical's overseas high-end chain laboratories in the field of in vitro diagnostics to break through in batches.
Track Five: New Manufacturing
Chinese companies are rising in the fields of new manufacturing, new energy and high-end manufacturing
In recent years, photovoltaics, electric vehicles, and lithium batteries have been called the "three new items" of China's foreign trade exports. The new manufacturing they represent covers multiple tracks such as high-end manufacturing, new materials, and green manufacturing, and together form a new manufacturing "naval army".
It is an inevitable choice for Chinese manufacturing enterprises to go overseas. Taking the new energy industry as an example, the global energy industry is embarking on a green transformation, and developed countries require to achieve carbon peaking and carbon neutrality, which means new opportunities to go overseas. A large number of manufacturing companies that have grown up on the back of China's supply chain have changed from passive going overseas to actively going overseas, looking for more opportunities to build factories in overseas markets.
Chinese companies are emerging in the fields of new manufacturing, new energy and high-end manufacturing, and some of them have grown into giants in subdivided fields. In the future, they have the opportunity to become the main force for Chinese products and equipment to go overseas.
Track 6: Smart Hardware
From imitator to innovator and leader
The overseas development of the smart hardware track can be summed up in one sentence: the world looks at China, and China looks at Shenzhen.
The CES exhibition held in Las Vegas in the United States in January every year was once "booked out" by Chinese companies going overseas before the new crown epidemic. If it is said that Chinese overseas products on the pan-entertainment track are blooming, then on the smart hardware track representing the highest level of consumer electronics, Chinese overseas companies are full of giants.
As the most concentrated production base of consumer electronics products in China, Shenzhen is undoubtedly a barometer of global smart hardware, and it is also regarded as the innovation center of global smart hardware, from Bluetooth headsets, AR glasses, sports cameras, to consumer drones, floor sweepers For smart home products such as robots, a number of leading companies have emerged in Shenzhen and the surrounding Pearl River Delta to rule the roost on the vertical track.
In this field, many Chinese companies going overseas have changed from imitators to innovators and leaders. The extremely complete supply chain system is the biggest advantage of Chinese companies going overseas.
Track 7: Automobiles and Automobile Technology
"New three pieces" become the technical advantage of going overseas
How hot are Chinese cars going overseas? According to data from the shipping market analysis agency Clarksons, the rent of car carriers has increased by more than 10 times in three years. At the end of 2022, in order to ensure that Chinese-made cars can be transported to the global market under the situation of hot demand, BYD and SAIC even bought their own ships.
Statistics from the China Association of Automobile Manufacturers show that in the first quarter of this year, China's auto exports reached 1.069 million, surpassing Japan's 1.047 million. China has become the world's largest auto exporter for the first time from the world's largest auto consumer. In 2023, China's auto exports are expected to be 4 million units, surpassing Japan throughout the year.
Connecting two million-level steps to achieve the milestone of "super-morality and catching up with the sun" is the epitome of the blowout of Chinese automobiles going overseas, and it is also one of the biggest highlights of Chinese companies going overseas in the past two years.
The "surge" in the export of new energy vehicles is the biggest attraction of this round of car companies going overseas. Relying on the "new model + new energy" approach, Chinese companies have continued to make breakthroughs in overseas sales. In 2022, China's new energy vehicle exports will be 679,000, a year-on-year increase of 1.2 times, accounting for about 22% of total vehicle exports.
Conclusion: The good show has just begun
After observing nearly a hundred companies going overseas in seven tracks, it can be found that behind the upsurge of going overseas is the strong sense of anxiety, urgency and glory of Chinese companies, which is also the entrepreneurial spirit behind China's economic take-off.
The 1980s and 1990s were the golden age of Hong Kong movies. At that time, Hong Kong films were not only focused on the local box office, but also aimed at the film markets of Japan, South Korea, and Southeast Asia. This greatly increased the market territory of Hong Kong films and made Hong Kong an Eastern Hollywood. From the flourishing of Chinese overseas products on the pan-entertainment track to the low-priced legends of overseas e-commerce platforms, there is somewhat a shadow of the Hong Kong film golden age sweeping the film markets of East Asia and Southeast Asia. In the era of mobile Internet, people's lifestyles are changing, but for The pursuit of entertainment and the pursuit of cheap and high-quality products will not change with the times.
Smart manufacturing, electric vehicles, new energy and other products in overseas markets can also be regarded as an upgraded version 2.0 of China's "world factory". In particular, China has replaced Japan as the world's largest car exporter. The second restructuring and the re-ranking of global car companies in the next ten years will have a profound impact.
Of course, compared with the multinational giants that have been cultivating globalization for decades, for Chinese companies that are new to the sea, various risks and challenges have to be faced directly. A little carelessness may hit the rocks. At the same time, the subversive technological innovation and application represented by AIGC is profoundly affecting all walks of life, and will also reshape the new look of Chinese companies going overseas. How to seize opportunities is also a question that companies going overseas need to think about.
In short, for Chinese companies, going overseas is a long marathon. The next step of "going out" is to "stand firm" and "go far". The road is long and difficult, and the fun has just begun.