During a meeting with the board of one of the largest FMCG companies, business analyst Shaun Rein pleaded for a ‘China-first’ strategy, as the country is key for the companies development. Some of his arguments he summarized in CNBC. Take Apple as an example.
Companies need to stop thinking of China as an afterthought and make it an integral part of their corporate planning and product development just as they do with America and Europe. If they don’t, they risk losing out to aggressive, well-capitalized and increasingly innovative Chinese brands.
Such a change in mindset can have a big impact on business. Case in point: Apple. The company turned around its operations in China this year after a lack luster launch of the iPhone two years ago. It introduced the iPhone 4 soon after its release in the U.S., rather than waiting for years as they did previously.
With several hundred million Smartphone users who change their phones on average every nine to twelve months, rather than every two to three years like in America, Apple has a big opportunity in China.
During my meeting with the FMCG company, I also suggested the board stop calling China an emerging market. I argued that it doesn’t make sense to call a country that drives growth and will soon equal America in terms of sales “emerging”. That moniker gives it second-class status when it comes to strategic planning. Companies need to evolve to handle a new business paradigm in which former emerging markets become aggressive growth markets that could soon match major western ones. All divisions need to understand the disruptive nature of this shift and prepare for it.
Shaun Rein spoke also today on China’s inflation and rising labor costs, the pitfalls and opportunities for companies
- Apple is lagging behind Google’s android – Shaun Rein (chinaherald.net)
- Wal-Mart cannot win on prices in China – Shaun Rein (chinaspeakersbureau.info)
- Why Nokia falls and Apple soars in China – Shaun Rein (chinaherald.net)
- The debate: The End of Cheap China – Shaun Rein (chinaherald.net)