Globalization is so tangible: 30 field observations in the United States, Africa, and Europe

Summary of Key Insights

This article presents the core findings from Black Ant Capital's in-depth research on three major consumer markets: the United States, Africa, and Europe, regarding brand globalization. The main takeaway is that there is no such thing as an abstract “global market”; instead, there are numerous localized markets. The essence of globalization lies not in replicating successful strategies but in becoming an integral part of each local market. Through extensive field observations, the article highlights the significant differences in these markets regarding distribution channels, consumer habits, and business logic, providing valuable insights for Chinese brands looking to expand internationally.

Detailed Analysis

1. The US Market: Not a Single Market, but Multiple Parallel Consumer Universes

The US may appear to be a unified market, but it is actually divided into separate segments based on factors such as demographics and income levels:

• Dramatic Price Differences within Short Distances: For example, the Erewhon supermarket in Los Angeles offers high-end healthy foods (e.g., water for $3 per bottle), while a Mexican-owned supermarket just 10 minutes away sells 35 bottles of water for $5 ($15 per bottle). The consumer base and pricing structures vary dramatically, creating two distinct worlds.
• Distribution Channels Define Brand Identity: Where you sell your products in the US significantly influences how consumers perceive your brand. Erewhon represents a “healthy and premium lifestyle,” Trader Joe’s builds loyalty through trusted recommendations, and Walmart is known for its affordable offerings. New brands entering Erewhon are immediately perceived as healthy and trustworthy, whereas those entering Mexican-owned supermarkets are seen as offering cost-effective options for families.
• Chinese-Owned Supermarkets Are Not the Mainstream: Although T&T’s Seattle store generates nearly $100 million in annual sales, it primarily serves the Chinese community. Many Chinese brands mistakenly assume that doing well in the Asian market equates to success in the US market, but there is a significant gap between the two.

2. The African Market: Traditional Channels Are Dominant; Infrastructure and Localization Are Crucial

Africa is not a homogeneous market, with significant differences between East Africa (Kenya) and West Africa (Nigeria). The key factors are:

• Traditional Channels Are Key: Consumer goods in Africa mainly circulate through large wholesale markets, then to smaller retailers, and finally to local shops. The penetration of modern supermarkets is low (less than 10% except in South Africa).
• Chinese Brands Bring New Approaches: While foreign companies traditionally relied on a wait-and-see approach, Chinese firms have introduced innovative incentives (monthly/recurring discounts, terminal rewards) that have motivated local distributors.
• Challenges in E-commerce: Mobile payments are widespread, but e-commerce faces issues with cash-on-delivery (high rejection rates) and unclear addresses, making logistics difficult.
• Building Factories Involves Investing in Infrastructure: Setting up factories in Africa means not only building facilities but also providing essential services such as roads, electricity, and water supply.

3. The European Market: Low Growth; Buyer-Powered, Internationalization Is Imperative

The European consumer market is mature but growing slowly. Brands must adopt different strategies:

• Buyers Determine Success: European brands do not rely on opening physical stores; instead, they first distribute products to wholesalers, who then sell them to department stores or retail outlets. Only if buyers recognize the value of a product will it gain more display space. In contrast, Chinese department stores rent out space for a fee, while European ones involve buyers in selecting and promoting products.
• Limited Domestic Market Potential: Emerging brands in Italy and France hit a ceiling at sales of 30–40 million euros and thus must expand internationally, often targeting the US (which has similar distribution channels) rather than China due to its fragmented online market and high costs for physical stores.
• Slow Growth and Acquisition as a Path to Exit: European brands aim for steady growth (20–30% annually) rather than rapid expansion. They prefer to be acquired by large groups like LVMH or Kering, which value unique brand identities and long-term assets over scale.

4. Lessons for Chinese Brands Looking to Go Global

The article offers practical advice based on comparisons of Korean, Japanese, and Chinese brands:

• Inauthenticity Can Be a Advantage: Panda Express’s “Orange Chicken” (a non-traditional dish) has become a popular item in US supermarkets because it meets American consumers’ preferences for sweetness and convenience. The founder believes that being “inauthentic” is sometimes the right approach.
• Cultural Influence Does Not Necessarily Lead to Commercial Success: Japanese cultural products (anime, games) are popular in the US, but Japanese food brands remain largely confined to Asian-owned supermarkets. Korean brands like CJ’s dumplings and Samyang’s chicken noodles have succeeded by adapting products to local tastes and using K-pop as a marketing tool.
• Localization Is Essential: Chinese brands must adapt their strategies for each market. For example, they need to develop different products for different consumer groups in the US, establish incentive systems in Africa, and build relationships with buyers in Europe.

5. A New Era of Globalization: China Moving From a Manufacturing Power to a Cultural Exporter

The article highlights that Chinese brands now have new advantages for globalization:

• Global consumers are increasingly interested in Chinese culture, as seen through platforms like TikTok and the rise of “China Travel” trends.
• However, localization is still crucial for success. Brands like BYD and Pop Mart have succeeded by adapting their products to local markets (e.g., BYD’s electric buses in Europe, Pop Mart’s pop-up stores in Southeast Asia).

In summary, globalization means becoming an integral part of each local market, not just selling Chinese products worldwide. This is the core conclusion drawn from Black Ant Capital’s research.