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Cebit 2014: China's broken growth model will change Australian business: CMR

Allan Swann | May 7, 2014
Green-tech, targeting younger demographics and brand trust key to winning China

This has lead to a corresponding rise in the prominence of Chinese homegrown brands, such as Lenovo, Huawei and Xiaomi, products which are high quality by any markets standards.

"The west is no longer light years ahead," said Rein.

A 3M representative told Rein that 5 years ago, the company would've considered itself 10-20 years ahead. Nowadays Chinese firms have caught up, not just in terms of quality and price, but innovation. Its no longer a knock off game.

Lenovo is now the world's largest PC manufacturer, and continues producing high quality devices. Xiaomi mobiles, which are middle to high end smartphones, are set to be launched in North America, alongside ZTE and Huawei who have made market share in the low end.

Ericsson spends $5bn in R&D, Huawei is just behind on $4.9bn, and has picked up several key contracts in Ericsson's home turf, such as Deutsche Telekom. Rein said that Cisco executives have told him 'we're not that much better than Huawei anymore'.

"We are hearing the same thing in category after category," he said.

Part of the key to this innovative surge has been the 'bamboo ceiling'; the perception amongst China's youthful elite that they can't be senior executives in western corporations. This leads China's best and brightest back home to drive growth in their home corporations, and we're seeing the effects now.

One of the key advantages we still have left is that brand trust, which Australian tech businesses should take advantage of - and quickly, because its an advantage that's rapidly eroding.

Three Tips for Breaking the Chinese Market

1. Make sure you build brand trust in China - play on safety, quality

2. Make an authentic brand position build - don't knock off someone else

3. Be conservative - don't do anything to damage your brand's trust.


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