First, the enterprise out of the waves surge
1. The number of enterprises going to sea has increased significantly.
In 2023, the number of non-financial overseas enterprises directly invested by China reached 7,913, a sharp increase of 1,483 over the previous year, the highest growth rate in history. This data fully shows the strong momentum of China enterprises going out to sea. Many enterprises actively expand overseas markets and seek new development opportunities.
2. The scale of investment continues to expand.
China’s foreign non-financial direct investment was US$ 130.1 billion, a year-on-year increase of 11.4%, second only to the high point in 2016; From January to February, 2024, the index maintained a growth trend, with a year-on-year increase of 10% in RMB. Under the complicated and changeable global economic situation, the scale of overseas investment of China enterprises has been expanding, which reflects the strength and confidence of China enterprises.
3. Multi-industry joint efforts
Overseas enterprises cover many industries, from internet application enterprises to digital infrastructure, from manufacturing plants to e-commerce logistics. For example, new energy automobile companies frequently go to sea, Geely plans to invest 10 billion US dollars in Malaysia to build an automobile city, BYD will set up a large-scale production base complex in Brazil, and SAIC plans to invest in building a new energy automobile factory in Europe. At the same time, in the traditional infrastructure, energy, minerals and other construction fields, Chinese enterprises are also constantly pursuing high-end.
4. The joint promotion of national policies and market decisions
National policies have played an important role in enterprises going to sea. From facilitating outbound investment to strengthening overseas investment supervision, policies are constantly adjusted to adapt to market changes. At the same time, various factors in the market operation, such as domestic economy and business environment, international relations environment and enterprise initiative, have also jointly promoted the wave of China enterprises going to sea. Going out to sea is not only a commercial activity, but also an important measure for national economic development and global influence.
Second, the legend of BYD going to sea
(1) Full speed mode is turned on.
BYD’s going out to sea has indeed created a remarkable miracle. On July 4th, BYD rolled off the assembly line for its 8 millionth new energy vehicle. This milestone marked BYD’s outstanding achievements in the field of new energy vehicles. In just three months, the 7 millionth to 8 millionth new energy vehicles rolled off the assembly line, which is a "miracle of the world automobile industry". At the same time, BYD’s factory in Thailand was completed, and it took only 16 months from start to production. The annual production capacity of this factory is about 150,000 vehicles, which can provide 10,000 local jobs, which not only promotes the warming of Sino-Thai friendship, but also fills in BYD’s overseas "territory". In the Thai market, BYD has won the title of pure electric vehicle sales in Thailand for 18 months in just over a year, and seized more than one-third of the market share. At present, BYD’s new energy vehicles have been exported to 88 countries and regions and more than 400 cities around the world, showing the strength of China’s automobile brand to the world and leading the strong rise of China’s automobile industry.
(2) Excellent performance in overseas markets
BYD has gained numerous praises in overseas markets. Many famous stars have praised BYD. For example, Premier League Manchester City football star Kyle Walker chose BYD Seal as his new car and praised its products on social platforms. The linkage between English stars and BYD is not only the recognition of BYD’s products, but also in line with BYD’s green dream. BYD has been the No.1 automobile brand in China for three consecutive years, and one new energy vehicle sold worldwide is BYD. The designs of its models, such as Dolphin, Seal and ATTO 3 (Yuan PLUS), are full of new ideas, which can meet the car needs of different groups of people and are recognized by overseas audiences in many circles. In the 2024 European Cup, BYD, as an official partner, will further enhance its global influence and let the global audience know the charm of China brand and the powerful strength of China automobile enterprises.
Third, Xiaomi’s road to the sea
(1) Outstanding results in the first quarter
In the first quarter of 2024, Xiaomi was spent in victory and anxiety. In this quarter, Xiaomi’s performance greatly exceeded market expectations. The revenue of smartphone business increased significantly, reaching 46.5 billion yuan, up 32.9% year-on-year. Global smartphone shipments reached 40.6 million units, a year-on-year increase of 33.7%. The revenue from IoT and consumer products business was 20.4 billion, up 21% year-on-year, and the gross profit margin reached a new high of 19.9%. Internet service business revenue was 8 billion, up 14.5% year-on-year. The good performance of various business segments highlights Xiaomi’s strong competitiveness in the market.
(B) overseas strategic layout
Xiaomi has actively expanded in overseas markets and formulated different strategies for different markets. In the European market, Xiaomi is committed to improving the product structure and promoting the high-end strategy. Take Xiaomi 14 Ultra as an example, its price in Europe is as high as 1,499 euros (equivalent to nearly 12,000 yuan), which marks an important milestone in the high-end of Xiaomi. At the same time, Xiaomi pays attention to strategic cooperation with local operators to promote the further internationalization of the European market in the future by upgrading product grades and improving brand image. In the African market, Xiaomi aims at market share and actively explores emerging markets. In addition, Xiaomi also launched an orderly sea plan for smart home appliances. At present, 100% of the air conditioners, refrigerators and washing machines in Xiaomi’s household appliances are in the China market. In the future, we will consider how to go to sea in an orderly manner to further expand overseas market share. At the same time, Xiaomi is also expanding overseas Xiaomi Home stores, exploring the landing and closed loop of Xiaomi Home in overseas markets, laying a solid foundation for multi-category and future cars to go to sea.
(3) The whole ecology of people, cars and homes
Xiaomi launched the strategy of "people, cars and homes are all ecological" and performed well overseas. The sales volume of Xiaomi 14 Ultra in Europe has tripled compared with the previous generation, and the sales volume of Xiaomi 14, which was released in Europe at the same time, has also increased by 6 times year-on-year. As the flagship mobile phone of Xiaomi’s professional image, Xiaomi 14 Ultra is equipped with the hottest satellite communication system, the first two-way satellite communication system, and two Xiaomi self-developed T1 signal enhancement chips, which realize higher communication efficiency and provide protection for users’ emergency communication needs in extreme scenes. At the same time, Xiaomi also released a number of "all-ecological" category flagships, such as Xiaomi flat-panel 6S Pro 12.4, Redmi Book Pro 2024 series, professional-grade e-sports display Redmi display G Pro 27 and so on. Xiaomi Su7 made its debut overseas, which attracted a lot of attention. In an interview with CNBC, Xiaomi executives revealed that the company has formulated several pricing strategies for Xiaomi SU7, and predicted that the price announcement time is coming soon. The first delivery work in the domestic market is expected to start in the second quarter, which is expected to open a new chapter for Xiaomi in the field of smart electric vehicles.
Fourth, the exploration of the sea route
(1) Advantages of holding a group to sea
Holding a group to the sea can bring many advantages to enterprises. In the face of overseas cultural differences and various risks, enterprises can form a cooperative model with complementary advantages and division of labor to avoid vicious competition. For example, Wang Yongqing, full-time vice chairman of the All-China Federation of Industry and Commerce, said that 274 of the top 500 private enterprises in 2017 participated in the "Belt and Road" construction, achieving overseas income excluding exports of more than 790 billion US dollars, a substantial increase of more than 540 billion US dollars over the previous year. According to the data of the National Information Center, in 2017, the total import and export volume of private enterprises and countries related to the Belt and Road reached more than 600 billion US dollars, accounting for 43% of the total trade volume of countries related to the Belt and Road. Private enterprises have become an important force participating in the construction of the Belt and Road.
Holding a group to the sea can also reduce the cost of overseas storage. Taking Whale Warehouse Technology as an example, through ecological cooperation with logistics real estate companies, financial leasing companies and contract logistics companies, the initial investment of retailers in applying smart warehouse is reduced to zero, thus further lowering the threshold for retailers to enjoy smart warehouse services. The overseas cloud warehouse market has a vast space, which can be divided into two categories: pioneering in emerging markets and competition in mature markets. In emerging markets, such as the Middle East and Southeast Asia, it is even more necessary to go out to sea in groups to jointly build overseas infrastructure and carry out systematic and intelligent upgrades; In mature markets, such as European and American countries, the volume is large, and the core appeal is to reduce costs, which can be considered from three directions: saving people, land and worry. Developed countries have high labor costs, so logistics robots can be used instead to save people. Adopt intensive warehousing logistics to meet different needs and realize "land saving"; Through the AI ? ? warehouse brain, digitalization is realized, the smart warehouse is highly transparent, and the management level is improved to achieve "peace of mind".
(B) localized operation
When products go out to sea, we should choose the sales channels according to local conditions and fully consider the local market demand. In the process of going to sea, China brands should not only rely on traditional sales channels, but also choose according to the characteristics of different markets. On the one hand, it can enter Amazon, Wal-Mart and other e-commerce platforms. This kind of shelf-type e-commerce has a rapid growth in performance during the traffic dividend period, but it has limited help for brand building. On the other hand, social e-commerce has just started in overseas markets and still has a large market space, which is expected to accumulate the long-term value of the brand. Although domestic social e-commerce is already a red sea, overseas social e-commerce is driven by algorithms. For example, Tiktok has performed well in Southeast Asia this year and is in the dividend period.
China brand should think about how to make a good brand, and not just be satisfied with the manufacture of products. Relying on cross-border e-commerce, China brand overseas enterprises have the ability to directly reach the global end consumers and procurement needs. Xingyun Group provides digital supply chain services for online and offline small and medium-sized retailers, and its scale has ranked first in China, providing strong support for brands to go out to sea. For example, Lehang Technology settled in Amazon last year, and simultaneously opened European sites, intensified product development, and launched a cost-effective sweeper with long battery life and large suction according to the usage habits of European consumers. In 2020, the annual sales increased to more than five times, of which 80% came from newly expanded European sites. With Amazon’s value-added tax compliance solution, Ningbo Kangda achieved tax compliance in seven European countries. This year, affected by the epidemic, Europe’s "home economy" broke out, and enterprises achieved a contrarian increase in sales, with an annual sales increase of nearly three times.
(3) Global brand building
China enterprises need to go through four stages to become global brands. Firstly, it is the stage of international trade export based on OEM and relying on exporters as intermediaries; Secondly, enterprises began to establish direct customer channels, enter Amazon and e-commerce platforms, and directly supply the internationalization stage of distribution channels; Then, iterate and optimize exclusive products for local users and domestic customers, and establish the international localization operation stage of local after-sales service and R&D team; Finally, it is the global brand era of global chess and global integration.
In this process, China enterprises are faced with two puzzles: product selection and brand building. For product selection, enterprises need to establish market knowledge and customer knowledge about overseas target markets, and guide enterprises to effectively formulate product matching, value schemes and sales plans through online and offline, first-hand data and second-hand information. For brand building, enterprises should not only understand brands as foreign names and logo, but also start with brand visual effects, brand positioning, brand stories and other aspects to bring endless stories of emotion and trust to customers. For example, Anker Anke Innovation, Shein Xiyin, Zaful Safu, Zhiou Home and other brands in cross-border e-commerce field have rapidly grown into the top brands in various market segments by relying on third-party platforms or self-built independent station platforms. Statistics show that there are more than 5,000 China brands in cross-border e-commerce field. Yuanqi Forest, Perfect Diary, POP MART, etc. of the new national tide brands also pay great attention to online channels in the process of brand going out to sea, and quickly establish brand mind with the help of cross-border e-commerce. China enterprises should take root in China, make full use of talents, culture, manufacturing and engineering dividends, and achieve sustainable development.
Five, the future prospects can be expected.
1. The changing trend of brand performance continues to deepen.
The three trends of China brand going out to sea in 2024 are expected to continue to deepen in the future. The ups and downs of global communication ranking will promote the rise of more emerging brands, while old brands will continue to innovate to maintain their competitiveness. For example, in the field of new energy vehicles, with the continuous efforts of BYD and other enterprises, its global influence will be further expanded, attracting more consumers to pay attention to the China brand. And Xiaomi and other technology companies will continue to make breakthroughs in the global smart phone and smart hardware market, and promote the position of China brand in the global ranking of communication power to be more stable.
The trend of strengthening the frontier position of the industry at sea will prompt more China brands to move from product export to industrial chain export. Taking the automobile industry as an example, not only the whole vehicle is exported, but also the related parts and technical services will gradually enter the international market. In the field of intelligent hardware, Xiaomi will also drive upstream and downstream enterprises in the industrial chain to go to sea together to build a more complete global industrial chain ecology.
The importance of authoritative media reports will continue to be highlighted. More and more China brands will not only spread widely on social media, but also further enhance their brand awareness and reputation through mainstream media reports and the promotion of video opinion leaders. For example, the overseas development achievements of BYD and Xiaomi will attract the attention of more authoritative media and set an example for China brands to go abroad.
2. Multi-dimensional promotion of international competitiveness
China brand will continue to enhance its international competitiveness with the help of multi-dimensional strategies such as stable quality, innovative design and precise marketing. In terms of quality, BYD has won the trust of consumers all over the world with its reliable new energy vehicle technology and high-quality manufacturing technology. Xiaomi occupies a place in the global market with cost-effective intelligent hardware products and constantly improving quality.
Innovative design is also the key to enhance international competitiveness. China brand will pay more attention to product appearance design, functional innovation and user experience. For example, Xiaomi’s smart phone has made continuous breakthroughs in design, and at the same time introduced more innovative functions to meet the needs of different consumers. BYD’s new energy vehicles are designed with a sense of technology and environmental protection, leading the global automotive design trend.
In terms of precision marketing, China brand will make full use of big data and artificial intelligence technology, deeply understand the needs of consumers in different countries and regions, and formulate personalized marketing strategies. For example, through cooperation with local operators in the European market, Xiaomi has accurately positioned high-end user groups and enhanced its brand image. Through localized marketing activities in the Thai market, BYD deeply understands the preferences of local consumers and enhances brand awareness.
3. The future development trend is good.
Looking forward to the future, the prospect of China brand going out to sea is very broad. With the sustained development of China’s economy and the continuous improvement of its technological innovation ability, China brand will play a more important role in the global market. In the field of new energy vehicles, China brand is expected to continue to lead the global development trend and promote the continuous progress of new energy vehicle technology. In the field of science and technology, China brand will be driven by innovation, bringing more intelligent products and services to global consumers.
At the same time, China brand will pay more attention to sustainable development and social responsibility. On a global scale, sustainable development has become an important standard to measure corporate social responsibility. China brand will actively respond to this trend, show the role of China brand and win the respect and support of global consumers by implementing the use of environmental protection materials, energy-saving and emission-reduction production processes and social responsibility projects.
In a word, the future prospect of China brand going to sea can be expected, and it will shine more brightly in the global market.
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