Summary of Key Points
This article corrects a common misconception about “internationalization”: it’s not solely about entering developed markets like Europe and the United States. Domestic regional markets (such as Chengdu) and emerging markets (like Africa and Laos) also fall under the category of internationalization, with no distinction in importance. It emphasizes that true internationalization involves a progressive process: from exporting goods to establishing brands to promoting global standards. This journey transforms from simply selling products to building a recognizable brand and ultimately gaining influence over industry norms.
Detailed Analysis
1. Correcting the Misconception of Internationalization
Many people think that internationalization means selling products in Europe and the U.S. or doing business with developed countries, which is a narrow definition. The article highlights that actions like selling goods in Chengdu, conducting business in Africa, or setting up factories in Laos are also forms of internationalization. Why? Although Chengdu is an domestic city, it serves as an international logistics hub with numerous foreign-funded companies and international visitors. Selling products to this market (e.g., for foreigners or through transit to other countries) essentially connects them with global demand. Regions like Africa and Laos may not have advanced economies, but they offer significant market potential. Doing business there means connecting our offerings with global needs, and the competition is often less intense, making it easier to establish a foothold.
In short, internationalization is about “connecting to global markets.” As long as we can sell our products or services and make a profit, regardless of the location, it’s considered effective internationalization.
2. The First Step: Exporting Goods
Exporting goods is the foundation of internationalization, which involves selling products overseas. Examples include small commodities from Yiwu, household appliances from Guangdong, and clothing from Zhejiang through cross-border e-commerce or foreign trade channels. The key to this step is cost-effectiveness—our manufacturing advantages (low costs, high production capacity) give our products competitive prices in international markets. This helps make Chinese brands known to consumers worldwide, creating a foundation for future growth.
3. The Second Step: Building Brands
Merely selling goods is not enough; people may recognize the quality but not the brand. Building brands means making Chinese brands synonymous with certain categories. Examples include:
- DJI: With over 70% of the global drone market share, people immediately think of DJI when they think of drones.
- Anta: After acquiring FILA, it became a recognized sports brand in Europe and the U.S.
- Huawei: Despite sanctions, it remains associated with advanced technology in the eyes of consumers in Europe and the Middle East.
Building brands allows us to charge higher prices and gain customer loyalty. For example, Apple’s phones are highly sought after despite their higher prices due to the brand’s reputation.
4. The Third Step: Promoting Global Standards
The highest level of internationalization is promoting our own standards. This means establishing industry norms and technical specifications that are recognized and followed by other countries. Examples include:
- High-Speed Rail: China not only sells high-speed trains but also shares its standards, which other countries use when building their own railways.
- 5G Technology: China’s 5G standards (e.g., Huawei’s patents) are widely adopted, with nearly 40% of the global 5G networks using them.
- New Energy Vehicles: China’s standards for batteries and charging interfaces are being adopted by many countries.
Promoting global standards transforms us from participants to rule-makers. Other companies must follow our guidelines, allowing us to earn revenue from technology patents and gain control over the global supply chain.
In Conclusion
Internationalization is not about being “high-end”; it’s about conducting business on a global scale. True leadership in internationalization involves moving from selling products to building brands and then setting industry standards. Only by completing these three steps can we truly have a say in the global economy.