In 2024, “going global” has emerged as a critical focus for various industries across China. According to data from the General Administration of Customs, China’s cross-border e-commerce import and export value reached 12.2 trillion yuan in the first half of this year, marking a year-on-year growth of 10.5%.
This growth in cross-border trade is set against a backdrop of significant transformation over the past 75 years. Chinese enterprises and their industrial supply chains have evolved dramatically, shifting from a scarcity of basic goods and technology to a flourishing landscape of both traditional foreign trade and cross-border e-commerce.
“Many unexpected companies and sectors, including Chinese biopharmaceutical firms, are starting conversations about going global,” noted Wu Ying, CEO and General Manager of Yidian Tianxia, during our interview. He highlighted that well-established brands, such as bicycle manufacturers and domestic car producers, are also accelerating their efforts to tap into international markets by actively participating in cross-border e-commerce platforms.
As more Chinese companies embark on their global journeys, they are becoming increasingly aware of how global perceptions of “Made in China” products are evolving. They are navigating both the opportunities and challenges presented by this new era of maritime exploration.
**Domestic Automobile Brands In Cross-Border E-Commerce**
“Dongfeng Liuzhou Motor is anticipating over 50% growth in our export business for this year,” stated Lin Changbo, General Manager of Dongfeng Liuzhou Motor. Having started its export operations in 1990, the company has built an impressive marketing network that spans over 80 countries and includes 200 distribution channels, achieving notable success in regions like ASEAN and the European Union.
Lin’s insights reflect 70 years of evolution for Dongfeng. He shared that the company originated from the Liuzhou Agricultural Machinery Plant, founded in 1954. Until 1969, the plant faced skepticism about its manufacturing capabilities, with workers manually shaping hot steel plates to produce Guangxi’s first heavy-duty truck on April 2, 1969.
The company’s first car was exported to Nigeria in 1990, followed by 30 vehicles sent to Vietnam in 1994. It wasn’t until the 2000s that they established a dedicated import-export department, successfully exporting over 1,000 vehicles in 2007.
However, the journey of exporting Chinese cars has not been without its hurdles. Chen Baohua, Assistant General Manager for Imports and Exports at Dongfeng Liuzhou, recounted the challenges faced by domestic companies seeking international clients before 2010, often encountering significant rejections. His initial outreach to businesses in the UAE required extensive research and resulted in high rejection rates, with few successful meetings.
Over the past decade, advancements in technology and design have enabled Chinese cars to align more closely with international standards. The 2022 Beijing Auto Show was a pivotal moment for Chen, as foreign dealers praised the designs and capabilities of domestic vehicles, declaring that “Chinese cars are shedding the low-quality, low-cost tag.”
The pandemic further propelled the desire for Chinese automakers to “go out.” Lin revealed that since 2019, Dongfeng Liuzhou has concentrated on B2B vehicle exports through platforms like Alibaba International, alongside establishing a presence on social media platforms such as Facebook, TikTok, and Instagram. Over the three years of the pandemic, they successfully reached over 100 countries through cross-border e-commerce, resulting in direct sales in over 30 countries and stable repeat purchases in 12.
In recent years, improvements in product quality, along with the expansion of overseas factories and marketing channels, have facilitated stronger connections between Chinese manufacturers and international dealers. By 2023, Dongfeng Liuzhou experienced an influx of proactive outreach from overseas clients, leading to weekly visits from international customers.
Entering cross-border e-commerce platforms has not only streamlined direct transactions for Dongfeng Liuzhou but also opened up significant opportunities for product showcases, advertising, and promotions. With an average of over 2,000 inquiries per month from online platforms, Lin emphasized that “even in a post-pandemic world, these digital tools remain crucial for optimizing offline business efficiency.”
**New Challenges Amid a Growing Trend**
The rise of cross-border e-commerce has coincided with an increasing number of Chinese products entering global markets. Dongfeng Liuzhou is not alone in this trend; in September, four electric vehicles from BAIC Group were exported to Turkey, marking a significant milestone as the first batch of vehicles from Chongqing exported via cross-border e-commerce. Established brands like Bai Mao and Phoenix bicycles have also capitalized on live streaming sales through these platforms in recent years.
A McKinsey report categorizes the evolution of Chinese enterprises going global into five stages: from the entry into the WTO and the early globalization efforts of 2001 to 2010, the surge in acquisitions from 2011 to 2018, the boom in e-commerce and global distribution established between 2019 and 2021, and now, from 2022 to 2023, the emergence of small and medium-sized enterprises leveraging internet tools to access international markets.
Throughout this journey, the approach for Chinese companies has shifted from mere exportation to comprehensive strategic development. This transformation has led to many opportunities while enhancing their capabilities in global logistics, cross-border payments, brand cultivation, and talent development.
In the early days of cross-border trade, payment service providers primarily catered to foreign businesses, often lacking an understanding of China’s unique business landscape. Fees on cross-border transactions could consume a significant portion of profits. Lu Shuai, co-founder of Hangzhou-based cross-border payment company PingPong, discussed the challenges of creating a payment service network tailored for Chinese SMEs, emphasizing their use of digital technology to reduce transaction costs to around 1%.
“Even a small transaction of $10 requires compliance across multiple countries, involving various financial institutions,” Lu pointed out. As the number of Chinese companies seeking international markets grows, the capabilities of cross-border payment firms are being put to the test in terms of digitalization and global compliance.
The push to “go global” is not only expanding the capabilities of Chinese businesses but also fostering the development of global marketing and foreign trade talent. “Since we started using Alibaba International, we receive inquiries from around the world daily, giving new employees the chance to interact with international clients and enhance their business skills. Our fastest sale was closed just 41 days after hiring, a remarkable feat compared to traditional foreign trade,” shared a manager from Phoenix bicycles.
Despite the overarching excitement, Wu Ying stresses that succeeding in the global market comes with significant hurdles. He highlights the importance of competitiveness and acknowledges the challenges Chinese companies face. As the enthusiasm for “going global” grows, Wu anticipates that branding will become a central theme for Chinese enterprises.
“To retain customers and encourage repeat purchases, companies must focus on brand building. As we delve deeper into international markets, significant investment in branding is essential, requiring a nuanced operational approach that diverges from conventional strategies,” Wu explained. “In the wake of going global, Chinese firms must meticulously address overseas customer insights, product packaging, website design, customer service, after-sales support, and fostering user retention.”
