Arthur Hagopian
Apr 4, 2024

Beyond the Great Wall: Navigating global expansion for Chinese businesses

Chinese brands seeking success abroad must fully commit to brand building, stay flexible and take ESG seriously, says SPRG Beijing's strategy director.

Shutterstock
Shutterstock

In the ever-evolving world of international business, I've had the privilege of being a front-row spectator to the dynamic dance between cultures and commerce, particularly within the vast and intricate landscape of China. As a seasoned communications professional with nearly two decades of experience, my journey has been a tale of guiding foreign enterprises in China, from tech and automotive giants, to consumer goods and luxury brands, steering them through the nuanced channels of brand establishment and growth.

In recent years, the script has taken a different turn, as I now spend a lot of time supporting Chinese enterprises— helping the rising stars of the East spread their wings and venture into uncharted territories beyond the Great Wall. Aiding Chinese companies in their quest for global growth, the pain-points and triumphs have taken on a new and exhilarating dimension. Some challenges are akin to those faced by foreign companies looking to grow their footprint in China, and some are unique to the Chinese “Chuhai” experience. While the following doesn’t cover every aspect, it highlights crucial considerations essential for the success of Chinese companies venturing overseas.

Fully commit to brand building/marketing

When going overseas, Chinese companies often find themselves caught in a dilemma between short-term sales and long-term growth and development. As renowned Austrian-American consultant and educator Peter Drucker aptly stated, "The business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs."

In China, where rapid growth and immediate profits are often prioritized, the concept of branding is still evolving. However, beyond the borders of China, branding, which is the precursor to and driver of all marketing strategies, is not just a luxury; it's a lifeline. It's about crafting a compelling identity that resonates with customers. Whether in B2B or B2C contexts, it’s about giving them a reason to choose your business over the competition, and bring them back again and again.

While short-term sales may yield quick wins, investing in branding is the cornerstone of sustained, long-term success in global markets. This is especially the case in times where geopolitical tensions may cast doubt in global consumer’s minds regarding the viability of Chinese companies and their products. Chinese companies have to tell their story in a way that is compelling to their global stakeholders.

Be flexible and listen to experts

In expanding into foreign markets, adaptability and flexibility are not just desirable traits but absolute necessities. Unlike their Western counterparts, Chinese organizations often operate within rigid hierarchical structures and operational styles, which can clash with the dynamic and fluid environments of international markets.

Recently, I had a candid conversation with two associates based in Europe who shared their frustrations with the influx of requests from Chinese companies in their markets. They expressed exasperation at the inconsistency and lack of strategic preparation displayed by these companies, which led to operational and workflow issues. One recounted a situation where a Chinese company director insisted on a media engagement method that directly contradicted regional policies, as well as other ineffective strategies ignoring the advice of local experts.

This incident underscores the importance of Chinese enterprises embracing flexibility and being open to strategic guidance from local experts, rather than viewing them solely as executors of predetermined plans. In the global arena, success hinges not just on adherence to established hierarchies, but on the ability to pivot, adapt, and leverage local expertise for strategic advantage.

Take ESG seriously

As the global business landscape evolves, the principles of environmental, social, and governance (ESG) are emerging as key determinants of corporate sustainability and success. While ESG considerations are gaining traction in China, they remain in a nascent stage of development, lacking clear requirements and standards for companies regarding targeting and reporting.

However, the significance of ESG in global markets cannot be overstated. ESG practices are increasingly viewed as essential criteria by investors, government stakeholders, the general public, and consumers. An organization's commitment to ESG principles serves as the cornerstone of its "license to operate" within society, directly impacting its long-term viability and operations in the region. Notably, the European Union recently advanced mandatory ESG reporting standards for companies and their supply chains, signaling a global shift towards ESG integration.

Chinese companies aspiring to thrive in global markets must take ESG very seriously, adhering to policy requirements and fulfilling reporting obligations. Furthermore, robust communication of ESG-related commitments and initiatives is imperative. Leveraging social media platforms, dedicated website pages, and ongoing media outreach channels will enable companies to effectively convey their dedication to ESG principles, fostering trust and credibility among stakeholders on a global scale.

The world is watching as China redefines its role in the international business arena, and I'm thrilled to be part of this exciting evolution. As Chinese companies step onto the global stage, the opportunities for growth are boundless. However, success in these markets requires more than ambition; it demands strategic foresight, adaptability, and a willingness to embrace change.

Chinese enterprises must be prepared to navigate diverse cultural landscapes and meet the varied expectations of changing regional markets. This involves more than simply exporting products; it necessitates a redefinition of their brand DNA, positioning themselves as global innovators finely attuned to the needs and expectations of consumers worldwide. I'm excited to guide you through this incredible journey—so stay tuned for more informative articles.


Arthur R. Hagopian is senior director of global strategy and digital at Strategic Public Relations Group in Beijing.

Source:
Campaign Asia

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