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Chinese firms’ new challenge: Sell to Chinese

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“The larger challenge for China, and everyone says this, is shifting towards domestic consumption,” says Marshall Meyer, a management professor and China specialist at the Wharton School of the University of Pennsylvania in Philadelphia. “The big issue is the dependence on exports…. It’s a real vulnerability.”

Wrenching change

Transitioning to a domestic market sounds great to Hu Guohui, who manages the Guangzhou Shenglong Electronic Technology Company. But wrenching his firm away from the simple, foreign-driven ways of the past hasn’t been easy.

The sprawling factory produces digital cameras, mobile phones, GPS units, and dozens of other products for a range of international name brands – high-end products that fill store shelves abroad but pointedly omit the name Guangzhou Shenglong Electronic Technology Company.

“People are always joking with us: ‘Foreigners are always thinking about the Chinese market. Why aren’t we Chinese thinking about our own market?’ ” Mr. Hu says. But “Chinese spending habits and those of Americans are really different. America has a culture of spending.”

His factory has taken the ambitious step of launching its own brand – UAT – directed at the Chinese consumer. The company hopes that in a few years this just-created brand will make up 40 percent of company revenues. Already, the new brand has pulled in around $3 million in one year, up from zero before the financial crisis, he says.

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