In recent years, the strategy of "brand globalization" has gained traction among Chinese enterprises seeking high-quality development and new growth opportunities within the framework of a new development paradigm emphasized on domestic circulation complemented by international circulationThis approach has become a market consensus, streamlining the various avenues for expansion.

The most noteworthy sector among the myriad paths leading abroad is consumer goodsThis area stands at the heart of intertwining the upstream and downstream segments of related industrial chainsThe trend has evolved from mere manufacturing exports and individual vendors branching out, to a fuller-fledged mission of global brand establishmentConsequently, the categories within consumer brand exports have grown increasingly specialized, covering a broader range of products.

As the domestic market continues to evolve, saturation looms for several industries, resulting in intensified competition that imposes growth constraints and increasing pressure on domestic enterprises

Take the restaurant sector, for instance – since the beginning of 2023, price wars erupted across multiple segmentsBrands ranging from traditional dining establishments to innovative tea houses have been fiercely contending for a share of a fleeting market, deploying a variety of strategies encompassing price adjustments, marketing tactics, and even emotional brandingDespite these efforts, many have confronted a paradox: while revenues might rise, profits often fail to keep pace.

In such a landscape, many Chinese consumer companies have come to recognize that focusing solely on domestic venues restricts their growth potentialThus, they have expanded their horizons toward overseas markets in search of broader opportunities and healthier profit margins, transforming global expansion into a new normalSectors such as consumer electronics, particularly in peripherals like power banks and chargers, have taken the lead in this exodus

• AMD Patents Glass Substrates as Intel, Samsung Enter Race
• Faster Project Approvals to Boost Select A-Shares
• A-Shares Rush into Semiconductors
• Is Gold Still Worth Investing In After Price Plunge?
• AMD Embraces Multi-Chip Stacking

Companies like Anker began by catering to niche electronic products, successfully penetrating markets in North America, Europe, Japan, and other Asian nationsSimilarly, DJI's leading-edge drone technology has established a substantial user base internationally, leveraging social media for engagement.

According to Gu Zhenyu, founder of Vesta, many established brands are now venturing beyond the domestic confines, driven by fierce competition that compels them to adapt or perishThe maturation of the Chinese supply chain has created surplus capacity that necessitates exploring new demand avenues to buffer this excess supplyHe further elaborates that an emerging generation of managers, spanning the 70s, 80s, and even 90s, armed with international educational backgrounds, finds navigating global markets more intuitiveThe globalization of infrastructure within sectors such as e-commerce and logistics also significantly facilitates the overseas ambitions of Chinese brands.

Wan Xiao, a partner at Qicheng Capital, echoes this sentiment, pointing to the distinctive advantages of Chinese consumer enterprises in the supply chain realm, which enables them to market competitively priced products internationally

In recent years, while retail channels in the American market have remained relatively stable, prices have surged significantly—over 100% in some instancesThe stark price disparity between identical products in China and America presents substantial profit potential for companies grasping the existing supply chain advantages to enter overseas markets.

However, navigating the tides of global trade protectionism poses new challenges for these enterprisesNumerous countries are imposing tariffs and other trade restrictions that raise costs and risks associated with international expansionThe long-held view that seamless global trade serves as the most efficient mechanism for market entry is increasingly obsoleteZhou Ying, Vice President of Binfu Capital, warns that the traditional view of an open trade environment has vanished, and companies should shed any illusions that this comfort zone still exists.

High tariffs serve as primary forms of trade barriers that demand attention from exporters

Increased tariffs heighten costs for export-driven firms, which are ultimately passed onto consumers, adversely impacting the competitive pricing of products in foreign marketsFor instance, the U.Shas imposed significant tariffs on various Chinese consumer goods, diminishing the competitiveness of these products within the American landscape.

To navigate around the constraints posed by tariffs, some companies may opt to relocate manufacturing bases or segments of their supply chains to target markets or low-tariff regionsWhile this strategy may alleviate some tax burdens, it raises complexities surrounding investment and managementFor example, in response to U.Stariffs, several Chinese firms have migrated portions of their production facilities to Southeast Asia.

The food and beverage sector exemplifies logistical challenges when encountering overseas markets where sourcing ingredients is inherently restricted

Recent food safety incidents involving a prominent Chinese restaurant brand that led to severe food poisoning cases in Singapore highlighted the risksSingapore has strict regulations prohibiting meat imports from China, banning chicken, pork, beef, and lamb—prompting companies to explore local alternatives.

Du Xiao, who oversees sales and international expansion for the brand Ma Liu Ji, emphasizes that the regulations and standards surrounding food additives and testing vary greatly across nationsThis lack of uniformity presents significant challenges for food exportation endeavorsEach country—including the U.S., Japan, and Australia—employs differing food safety standards, further complicating the ability to comply.

In a cautionary note, Gao Yuan, a partner at KPMG China, warns that firms lacking robust overseas supply and industrial chains will face mounting pressures as they look to expand internationally

Choices regarding geographical and industry focuses must align closely with the enterprises' product offerings, market stature, and overall brand strategy to cultivate an integrated capability.

Breaking free from a "cheap and low-quality" stigma is essential for brands seeking appeal in international marketsCrafting a strong brand image helps establish credibility and trust among foreign consumersIn scenarios where price advantages become constrained, companies are increasingly channeling their efforts into brand development, striving to elevate brand awareness, reputation, and loyalty to enhance their market competitivenessThis shift facilitates a transition from mere product exportation to genuine brand globalization.

We are witnessing a surge in Chinese brands that prioritize establishing and promoting their presence abroad through diverse avenuesCompanies are now showcasing their brands in prominent urban centers, utilizing advertising to enhance visibility and courting engagement with international consumers via platforms like social media and influencer marketing

They are also keen on understanding overseas consumer behaviors and preferences, refining product designs and after-sales service to deliver a comprehensive premium experience.

Gu Zhenyu elaborates that establishing mid- to high-end brands in international markets requires robust support to sustain brand premiumnessIn China, achieving substantial scale is often achievable through efficient front-end marketing within a mature ecosystem of platforms and logisticsHowever, this landscape might not be as accommodating abroad—third-party infrastructures can pose challenges related to service efficiency, costs, and reliabilityDeveloping internal solutions and logistics systems abroad manifests as a significant hurdle for enterprises attempting to capture overseas opportunities.

Du Xiao stresses that as Chinese firms brace for competition against global players, relying merely on low pricing tactics could lead to dire consequences

Products susceptible to imitation are easily replicated, while technological innovation and brand identity remain unique and unassailable attributes that define competitive strongholds.

Years of development have seen China's manufacturing sector make reflective progress in technology, craftsmanship, and the maintenance of quality control—laying a solid foundation for consumer brands aspiring to upscaleMany enterprises now possess the capability to produce superior quality, better-performing, and more aesthetically appealing goods commensurate with the preferences of discerning foreign buyersAdditionally, confronted with tariff barriers, export-oriented companies exhibit increased motivation to bolster their R&D efforts, enhance product quality and value, and invest in technological innovations to address overseas demands for premium offerings, thereby driving industrial enhancement.