Author|Consumption Ji Xiaoke
"Going to sea is the same as marrying far away, it is a big gamble." For brands, isn't it a big gamble to seek new opportunities in a foreign country where they don't know their lives?
Especially for micro, small and medium-sized enterprises, due to the lack of brand influence, low credit rating, lack of investigation and research of the local market, they will encounter problems such as fierce competition in international bidding projects, difficulties in financing services, insufficient overseas industrial support, and poor anti-risk ability when going overseas.
In addition, cultural and legal differences, high costs of international logistics, complexity of the supply chain, and high risks of international management are all practical factors that may affect the confidence of brands to go global.
Although under the wave of globalization, the world economic map is being reshaped. But such a beautiful structural opportunity does not belong to everyone.
In 2024, the phrase "if you don't go to sea, you're out" will simply sweep the business community across China.
It seems that voices from all sides are saying, "If you don't go to sea again, then you will miss the opportunity to fall from heaven." ”
At a time when domestic business is becoming more and more difficult to do, many entrepreneurs and entrepreneurs regard it as a lifesaver and want to rely on going overseas to seek a new way of life.
However, if you can't even do the land where you grow, you can't do it well when you go to sea! Going to sea is not a lifesaver for your failure, but a "dividend of the times" that you don't deserve! Starting from Zheng He, those who have successfully gone to sea and gone down in history are the kings of the mainland, the absolute best!
Just like the recent big A, this sky-high wealth. Not a gift from God, but a test given to you by the devil
According to customs statistics, in the first eight months of this year, there were 630,000 foreign trade operators on the mainland with import and export performance, an increase of 8.8 percent year-on-year. But in fact, going overseas rashly may not only not make the brand develop better, but even lead to the company's exit.
Nowadays, it is difficult to do business, mostly due to serious "involution". In fact, going to sea may not be able to escape the status quo of "involution", and will face a variety of problems such as geopolitics, legal differences, and regional and category imbalances after going to sea.
For example, in order to compete for overseas market share, wave after wave of "price wars" are constantly staged, and even the entire industry has to pay a heavy price.
The overseas of new energy vehicles is the best example. Although Musk said in the recent Tesla earnings call that Chinese car companies are the most competitive companies in the world. However, the sales of most car companies overseas are not optimistic, and even BYD, the best-selling auto market in China, is no exception.
Relevant data show that in 2022, BYD's total sales volume will be 1.86 million units, and overseas exports will only be more than 60,000 units; In 2023, BYD's total sales volume will be 3.02 million units, and overseas exports will be only 240,000 units.
In order to compete for market share, many Chinese car companies have launched a price offensive in the Southeast Asian market. According to Thailand media reports, after Chinese car companies arrived in Thailand, in order to compete for market share, a price war has begun, and there is a trend of intensification. Since the launch of a number of new Chinese cars last year, they have experienced several price cuts, and the price is simply broken.
The BYD ATTO 3 was initially priced at 1,099,900 baht in Thailand, or about 220,000 yuan, a premium of more than 60% compared to domestic pricing. However, since its launch, the price has been reduced four times, and in July, the ATTO 3 was priced at only 799,900 baht, which is more than 20% cheaper than the original price.
After that, BYD launched a preferential activity for cashback on summer limited-time car purchases. From July 18 to the end of August, Thailand consumers can get up to 50,000 baht in cash when they buy ATTO 3 or BYD Seal models.
As the discounts continue to increase, it has also caused a lot of controversy.
Some consumers who have already purchased a car have refused to repay their car loans because they believe that they have been "stabbed by the price", which has led to an increase in the overall loan interest rate of China's new energy vehicles.
A price war is only half of the battle, Chinese companies lose profits at the same time, not only have not succeeded in occupying the market, but also damage the image of the brand, affecting the overall development of Chinese car companies, is really "losing the wife and soldiers".
On the surface, a "price war" between companies can make consumers cheaper, but in reality, it may not really win the hearts of consumers, but it may greatly damage the image of Chinese brands overseas.
Even if more users and markets are harvested in the short term, in the long run, this kind of behavior of "cheap grain hurting farmers" will lose the trust of consumers.
There is no other country in the world that has seen as rapid development in major industries as China in the past few decades. However, it also means that Chinese business is entering the Red Sea market.
As a result, more and more Chinese companies are looking overseas for new blue ocean markets.
But in fact, in the current 2024, a Chinese can think of a track that can enter the game, in fact, many Chinese have already begun to do it.
For example, the new tea drink track, not only the domestic tea market is particularly volatile, but also overseas is also fiercely competitive. Brands such as Michelle Ice City, Luckin, Hey Tea, Bawang Chaji, and Tea Baidao, which can be seen everywhere in China, are also opening stores in Singapore, Indonesia and other places at a faster and faster speed!
However, the actual situation is not so rosy, there is already a batch of milk tea has gone out of business, and a large number of second-hand equipment is waiting to be recycled.
If the number of Chinese players in an industry is extremely small, it probably means that the industry has become so heavily monopolized by powerful players from other countries that it is difficult for new players, especially Chinese brands, to find a breakthrough, let alone make a splash in the local market.
What's more, Chinese brands will also face various challenges in policy, law, and supply chain on the way to the sea.
As we all know, in recent years, China's e-commerce market is rising rapidly, but the most critical point is that the logistics industry is becoming more and more perfect.
In China, even in remote areas such as Xinjiang and Tibet, Taobao can basically receive anything you buy within three or four days. Pinduoduo has recently launched a free transfer, which has boosted online business.
But overseas, there is no logistics industry that is as convenient as China. For example, due to the influence of geographical environment factors, the development of logistics in Indonesia is very difficult.
Indonesia straddles Asia and Oceania, across the northern and southern hemispheres, and the main islands alone are New Guinea, Kalimantan, Sumatra, Sulawesi, and Java, and there are tens of thousands of large and small islands together.
The vast geographical environment, scattered population, and inadequate infrastructure make online shopping in Indonesia not only expensive for courier delivery, but also very inefficient.
Therefore, for Indonesians, even if e-commerce shopping is convenient, it is difficult to truly replace the position of offline.
In addition to the obstacles in hardware conditions, brands also have to overcome the difficulties of the soft environment when going overseas.
Many countries have their own culture and religious beliefs, and many companies will hire local employees in order to save costs. But we have to respect the beliefs and habits of local employees, otherwise we will only be full of contradictions.
And like Muslim countries, you must do halal certification, otherwise you will violate local laws and regulations, and you will not be able to get a basic admission ticket. Moreover, the halal certification is different in different countries, if you want to sell in multiple Muslim countries at the same time, you must apply for halal certification separately.
All in all, the road to the sea is definitely not as simple as selling in another region, if it is too easy to think about going to sea, the market will use reality to educate the brand to do things.
For many brands, there has always been a serious misunderstanding in the matter of going overseas, although they regard going overseas as an incremental market, they only care about cost performance, and even think of overseas as a pure low-price market.
In particular, countries that are not as developed as China mistakenly believe that they can easily gain a place in each other's markets by relying on low prices.
But in fact, this is an overly simplistic and crude stereotype.
But in fact, the high-end and quality route is the one that really has potential.
For example, the reason why Bubble Mart has become popular overseas is because of the high-end quality route.
Pop Mart's semi-annual performance report shows that in the first half of this year, Pop Mart's revenue increased by 61.98% year-on-year. The adjusted net profit was about 1.02 billion yuan, a year-on-year increase of 90.1%, and the overall performance achieved a "double growth" in revenue and net profit. Among them, the overseas market achieved revenue of 1.35 billion yuan, a year-on-year increase of 259.6%.
Among all overseas businesses, Southeast Asia is the largest market for Pop Mart. In the first half of this year, the revenue of the Southeast Asian market was 556 million yuan, a year-on-year increase of 478.3%.
The reason why Pop Mart is so popular in Southeast Asia is because it is good at building product IP and product localization.
In Indonesia, for example, the average person's monthly income is about 2,000 yuan. The price of a label of Bubble Mart is converted into nearly 100 yuan. Although the price of Pop Mart is not low, there are not many consumers in Indonesia, and even many stores often queue up.
In the final analysis, in order to cater to the overseas market, Pop Mart has vigorously discovered trendy artists and designers around the world, and has successfully incubated and developed well-known IPs such as MOLLY, SKULLPANDA, DIMOO, THEMONSTERS, Hirono, etc. These IPs are not only endowed with unique design elements and added value of products, but also meet consumers' pursuit of aesthetics.
In the process of overseas development, Pop Mart has not forgotten to build the products and brand characteristics of overseas enterprises, and through in-depth localization transformation and dissemination of cultural core, it has created a truly influential brand, won a group of consumer believers, and maximized commercial value.
But many brands don't have that kind of brand presence. And due to the lack of uniqueness, it is easy to be replaced by other brands.
Nowadays, combined with the environment at home and abroad, it is still a general trend for Chinese enterprises to "go overseas". After all, when faced with the dual challenges of insufficient domestic demand and overcapacity, enterprises can expand their markets, improve profits and competitiveness by going overseas.
Just like 30 years ago, when foreign capital entered China on a large scale, how they succeeded in China step by step.
Trying to play a Chinese company? Or trying to show localization?
On the contrary, when Disney first landed in Shanghai, its tagline was:
"Pure Disney, unique Chinese characteristics".
First, it emphasizes its own identity and self-confidence, and then it integrates with local Chinese culture.
The secret to Disney's successful entry into the Chinese market is not only the use of pandas, hot pot and Mulan.
Rather, it conveys universal family values and joy from an United States perspective, transforming stories into playful experiences that allow visitors to temporarily forget reality and immerse themselves in a fantasy world.
So, what is the key for Chinese companies and culture to go global?
It should not imitate the image of globalization or Westernization, but should discover China's core advantages in technology, industry, supply chain and digitalization, and deeply understand the connotation of Chinese culture, forming an inner force that is both gentle and powerful.
When Chinese enterprises enter the international market, if they are detached from a comprehensive summary of China's experience and an independent understanding of oriental wisdom, they will be like duckweed without roots, and it will be difficult to gain a foothold.
How can you know Indonesia better than an Indonesian company?
The real advantages of Chinese brands are:
You know more about things outside the local area than local companies, especially the complete experience from the Chinese supply chain, the unique way of thinking from the East, and the hard work of the Chinese, how these can be applied locally.
Chinese companies should understand that going overseas is not a panacea, and they should avoid rushing for quick success.
While pursuing overseas markets, we should pay more attention to long-term planning and risk management, and go to the world at a steady pace, so as to truly enhance the competitiveness and influence of enterprises.