The China Opportunity

Here is the presentation I gave to the IPA's China Club event on 19th October in London.

I am sure that we are all familiar with the phrase “Made in China”. It is a part of our everyday life nowadays. But I wonder how many people know who or what is actually behind this global brand.
Our Government calls them the Chinese SMEs, I think of them as the ‘True Heroes,’ the reason I say that is that they have enabled millions of ordinary people to enjoy a good lifestyle without being rich. Unfortunately, at the same time, this brand, Made in China, is often associated with a perception of being cheap, representing poor quality and with little or no design.

Well, let’s leave the perception aside for a second. I wonder who can guess what the figures on the slide represent?
SMEs are now responsible for about 60% of China's industrial output, employ about 75% of the workforce in China's cities and towns and account up to 70% of the Chinese GDP.
Most of these SMEs are Private Enterprises which set up in the 1980s in response to the Chinese Economic Reform started in 1978.


It is estimated that there are 40 million Chinese SMEs , more than the combined total of SME’s in Europe and US.


It won’t take long for the Chinese entrepreneurs to work out the simple mathematics and realise how much they gain on the value chain here.



Are they happy to hold a piece of bone and sleep on it? The answer is NO!


It would be nice for a change …


After 30 years of accumulating skills and wealth, these Chinese Pioneers are ready to create their own brands. But most of them do not know how and where to start.

You might wonder if China has its own brands at all, the answer is YES. In fact, there are lots and they are all massive, household names in China. But I guess none of you have heard any of them.



This raises another question – Why these big Chinese brands do not want to expand into the overseas markets? Here, are a few of my thoughts about why they have not expanded into overseas markets. In summary, too much hard work for too little gain. It’s not worth it.



Some leaders who have the Global Vision, the returns are very rewarding – e.g Aigo, an electronic gadgets company from Beijing, started making an appearance with F1 and then became a sponsor and merchandise partner of Manchester United earlier this year.



Because these leaders know that an internationally recognised brand must be recognised in China but not the reverse.



These brands tried, but have not been so lucky. We can see here why they got it so wrong.




Hopefully I have answered the question – where are the business opportunities in China for the British creative companies ?



To finish my speech today, I quote from a Chinese economist that “China is a private- sector economy” The 40million Chinese SMEs are YOUR potential clients.



Thank you!