The following is an excerpt from an article written by the Ruder Finn Asia team that was originally published on WARC.

The overall number of Chinese brands going global is almost explosive. According to customs data, China’s total import and export of goods in 2022 reached 42.07tn yuan and the scale of cross-border e-commerce exports in 2025 is expected to be 2.66tn yuan. Nearly all sectors, from culture and entertainment to information technology, are set to experience a compound annual growth rate of over 20%. Leading industries spearheading globalisation efforts, such as smartphones (Huawei, Xiaomi, Oppo) and home appliances (Midea, Haier), are also seeing stable overseas revenues, with approximately 30–50% of their income coming from abroad each year.

Currently, a significant percentage of Chinese companies are in the initial stages of globalisation, and it takes three to five years to transition from product globalisation to brand globalisation. In other words, the next five years will see a significant increase in the demand for brand building and communication capabilities from Chinese companies and their agencies.

But at present, there are very few agencies capable of handling this type of work. In the past year, I have encountered two main types of competitors:

• Purely local (such as purely Singaporean talent) teams, where proposal-writing skills and understanding of client briefs deviate significantly.
• Teams based in mainland China, which have experience serving Chinese clients and language abilities to interface with overseas markets but have limited cultural and consumer insights into overseas markets beyond what can be found in reports and search engines.
  
  Therefore, having a team structure that combines “Chinese people + locals” and the flexibility to make real-time adjustments are crucial in any globalisation process.
  
  The second observation I had was around “cultural shock” that different China-outbound brands had when it comes to the execution of communication campaigns. Many Chinese brands in the process of going global tend to have a vague segmentation of overseas markets, thinking that regions such as Southeast Asia, South America, South Africa and the Middle East are a single entity (perhaps on a map, the land area of these markets does not look as large in China and the US). In reality, each of these regions is composed of a dozen or even dozens of countries, with their own races, cultures, lifestyles, topography and economic conditions.
  
  Recently, we received a brief that required our team to partner with fashion media publications in Southeast Asia. This is relatively easy to accomplish in China, where one will communicate with a single point of contact at Vogue or Elle to cover the entire mainland market for content collaborations. This POC can also help brand clients launch activities in different cities and engage with consumers on a nationwide basis. However, in Southeast Asia, it’s not as simple as making a single phone call or contacting one person. If a brand wants to collaborate with Vogue or Elle in countries like Thailand, Malaysia and the Philippines, it needs to reach out to the companies that distribute the magazines in these three countries. The human resources required for this are several times larger than those needed for media collaborations within China.
  
  So how can we create mutual cultural understanding for Chinese brands and their overseas partners in the process of going global? Clearly, copying the approach that international brands used to enter China is not suitable because China itself is an insular market and when Chinese brands enter another insular market.

Originally published on WARC.

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