On the afternoon of December 9th, at the 2021 T-EDGE Global Innovation Conference co-hosted by Titanium Media Group, Daxing Production promotion center and national new media industry base, Liu Xiangming, co-founder of Titanium Media Group and founding director of ITValue, and Wang Xiaosong, professor of the School of Economics of Chinese Min University, researcher of the National Development and Strategic Research Institute and main member of the China Macroeconomic Forum, Li Xiaochuan, deputy general manager of Lazada's cross-border business, and Hu Yi, chairman of Innocent, We held an in-depth dialogue on the topic of corporate globalization.
Under the impact of the epidemic, the trend of globalization has undergone new changes, and risks and opportunities coexist. Not only that, enterprises going to sea have extended from the past concepts of physical trade and commodities going to sea to a wider range of diversified forms, such as capital, technology, business models and so on. Under the new situation, this also poses new challenges to enterprises.
"Globalization itself is irreversible, and now globalization has begun to show a clear trend of fragmentation and regionalization." Wang Xiaosong believes that the Asia-Pacific region is the most active and important region today, and if China can grasp the position in this region, it can rebuild the industrial chain and value chain. China occupies an important position in globalization, so it shoulders the dual tasks of safeguarding globalization and reconstructing international economic and trade rules.
For enterprises, under the new situation, enterprise globalization has changed from a multiple choice question to a mandatory question, how to better go out? "Localization" is the answer.
Li Xiaochuan believes that there are two main difficulties in the globalization of enterprises: the first is the understanding of local culture, which will affect market understanding and employee management, and the second is to truly understand local laws and regulations in order to avoid making fatal mistakes. Do these two points well, the basic problems of globalization will be solved by half, while others such as technology, algorithms, product solutions, services, etc., Chinese enterprises themselves have great advantages.
In the exploration of taking LinkedIn Nuosen to lay out global business, Hu Yi has a deep feeling, he believes that especially for technology-based companies, globalization should be native to enterprises, and the globalization of the company itself is not to solve the supply problem but to solve the demand side management problem - how to adapt to different cultural backgrounds, under different market operating mechanisms and different access rules, how to reach users, how to deliver, how to interact with the local market... "Globalization is finally localization." Hu Yi said.
The new challenges of globalization
At the beginning of the dialogue, Liu Xiangming, co-founder of Titanium Media Group and founding director of ITValue, proposed that globalization has undergone new changes, and asked the three guests to interpret the new trend of globalization from a professional perspective.
"The previous globalization was characterized by the free flow of commodities and factors, and everyone was thinking about how to reduce the barriers to the flow of commodities and people, reduce the barriers, and achieve the optimal allocation of resources around the world, which is a mutually beneficial and win-win situation." This pattern developed for fifty or sixty years from the aftermath of World War II until around 2010, and indeed promoted the allocation of global resources. Wang Xiaosong, a professor at the School of Economics at Chinese University, a researcher at the National Academy of Development and Strategic Studies and a key member of the China Macroeconomic Forum, said that after 2016, the trend of "anti-globalization" has been spreading and developing. There are many factors here, the most important of which is that the developed countries perceive themselves as disadvantaged in the process of globalization, which has enabled the developing countries to reap greater benefits. In this context, some governments have been influenced by populist ideologies and adopted many "anti-globalization" policies, and the trend of "anti-globalization" has swept the world, the most typical examples such as Brexit, Trump's trade protection policy and so on.
In Wang Xiaosong's view, under such a background, China actually occupies an important position in globalization, and it can be said that it has shared dividends in the process of globalization, so it also shoulders the dual tasks of how to maintain globalization and reconstruct international economic and trade rules.
Wang Xiaosong said that globalization itself is irreversible, and now the new trend is that globalization as a whole has become fragmented. Super-large-scale emerging regional trade agreements have gradually flourished, such as the Regional Comprehensive Economic Partnership Agreement (RCEP), which was just concluded last year and will come into force next year, China's application to join the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CTPPP) in September this year, and the United States is also leading some trade in services agreements, etc., reflecting the direction of regional economic integration from past integration to regionalization, which is very obvious. The Asia-Pacific region is the most active and important region today, and if China can grasp its position in this region, it can reconstruct the industrial chain and value chain.
He admits that there are also practical dilemmas on the other side, such as rising labor costs and the beginning of thresholds for overseas investment. But he stressed that China has new dividends and new advantages, such as infrastructure and human capital. In the past period of time, many companies moved to Vietnam because of tariffs during the trade war, but they returned to China in less than half a year, precisely because they saw that in terms of infrastructure, human capital, and business environment, Vietnam was too far behind China. In the new globalization, China has many new advantages, and these advantages must continue to be consolidated, continue to grow and continue to develop.
Lazada is Alibaba's flagship e-commerce platform in Southeast Asia, And Li Xiaochuan, deputy general manager of Lazada's cross-border business, has been engaged in cross-border trade, and he said that Lazada has been an e-commerce company rooted in Southeast Asia since its establishment in Singapore in 2012. Over the years, Lazada's cross-border business team has also helped more and more Chinese merchants better understand local culture and customs, so as to better meet the needs of local consumers. He observed that in the past decade or so, enterprises have completed the process of moving from the import and export mode of trade or commodities to the integration of overseas countries or some regional multicultural integration in China.
Li Xiaochuan said that under the consideration of multiple factors such as exchange rate, information transparency, region and commodity demand, trade relations in the past were more dependent on the European and American markets. But in recent years, there have been different trends, like Xiaomi in Southeast Asia to achieve the first and second levels, many Chinese brands of overseas market share is also very leading, Ali Group has different departments and different sectors responsible for different areas of the world, such as AliExpress responsible for South America and Europe, Lazada is responsible for Southeast Asia, etc., globalization is not simply the interaction and contact between developed countries in Europe and the United States, is a comprehensive globalization of the industrial or virtual product landing process.
He believes that for enterprises today, no matter what kind of globalization path they look for, as long as they find the right field for globalization, they can start the process of globalization. Now for Chinese enterprises, going to sea is no longer a simple commodity to go to sea, but also includes technology to go to sea, services to go to sea, now there are many particularly famous brands in foreign markets occupy a dominant position, such as millet, OPPO, etc., so whether it is cross-border trade or rooted in local companies, we must achieve a part of localization.
Hu Yi, chairman of Innocent, said that Innocent is a global technology company starting from China, which mainly provides customers with comprehensive solutions for digital operation and management, including supply chain, business process automation, efficient provision of enterprise management and operational efficiency and a series of solutions.
"Innocent is a native global company, when the company was only a few dozen people, we began to register our first company in Canada, began to explore how technology solutions can provide services for more users, not only for Chinese users, but also for customers in North America, Africa, the Middle East, and later in more industries also began to do some exploration." Hu Yi said that Innocent's management team introduced advanced solutions and best business practices from Europe and the United States when working in multinational companies in the early days, served many large, medium and small companies in China, and with the enhancement of comprehensive national strength and economic development, it is more and more felt that the enterprise itself and customers are on the starting line with global advanced enterprises in many business operations, enterprise management, digital development level, so the idea of globalization has been born ——" Why can't the company position itself as a global company from the start? ”
According to Hu Yi's observation, more and more companies are emerging in China that have begun to lay out their business globalization very early. In his view, there are several advantages to this: first, the company's technology can play a greater value, expanding the scope of customers to the world; second, it takes advantage of China's various advantages, such as experience in handling complex business scenarios, as well as huge data resources, rich engineers and technical resources, and business development experience accumulated over the decades of reform and opening up.
"How to do globalization, we have summed it up in one sentence: 'Globalization is localization in the end'." Hu Yi stressed that for technology-based companies, globalization should be enterprise-native. He believes that for the company's global development, the supply of software and services is not a problem, the focus is to solve the demand side problems, such as how to reach users, how to deliver products in the case of different cultural backgrounds, different market operating mechanisms, different access rules, how to interact with the local market... This experience should have some inspiration and help for the exploration and experience of Chinese technology companies.
Play a good "localization" combination punch
The guests repeatedly mentioned localization, which is also a new challenge for Chinese enterprises to go global today, Liu Xiangming believes that globalization and localization are two sides of the same coin, how to play a good "local operation" combination fist? He asked the guests to share their experiences.
Engaged in cross-border trade for a long time, Li Xiaochuan observed that there are two major difficulties in today's globalization: the first is culture, which not only affects the understanding of the market, but also involves employee management; the second is laws and regulations, if not truly understood, there may be fatal mistakes. In his view, these two aspects are the biggest obstacles to globalization, and if these problems are solved, the basic problems will already be half solved. Other technologies, algorithms and market solutions, and professionals, these China have advantages overseas and are easy to compensate for.
Innocent's development is also a localization process. Hu Yi shared that several regional markets have different characteristics, and in China, Innocent's main customers are oil and power energy giants, tailoring some digital solutions and specialized supply chain systems for them. When I arrived in Africa, I found that the industry here was similar to that of China, and slowly African oil companies and power companies became customers. But in North America, the operation began to encounter some problems, Innocent found that the large companies here, on the one hand, are not as energetic as the large Chinese companies, and the selection conditions are relatively strict, so it is more difficult for small companies to cooperate with them. Later, after a period of operation, through the development of the local team and the expansion of market influence, but also with many partners to discuss and research, and gradually found that in Europe and the United States small and medium-sized enterprises are more developed. During the epidemic period, Innocent adjusted its market strategy, also made investment and mergers and acquisitions, and gradually began to focus on the local small and medium-sized enterprise market in Canada and the United States, which suddenly opened up a big situation.
In these different regions, the need for digitalization also varies greatly.
Hu Yi said that China's digitalization is promoted as a national strategy, with a relatively clear top-level design, starting from large state-owned enterprises or industry leaders, and gradually spreading to enterprises of all sizes. This approach is also more in line with our national institutional mechanisms. In the European and American markets, digitalization is more of a corporate behavior, and it is essential for enterprises to develop to a certain extent. There is a strong need for companies in North America to improve efficiency, enhance competitiveness or expand their reach through digitalization. In particular, small and medium-sized enterprises, the demand is even stronger. Looking at less developed areas such as Africa and the Middle East, digitalization is more like a historical opportunity for them, and vigorously invests in construction to achieve leapfrog development as a starting point. In general, digital transformation, from the market side of the demand difference is relatively large, but from the supply side, its support technology is similar.
"Today's enterprise globalization has a lot of experience to learn from, in the specific practice of two points can be combined: first, with the help of the Global Chinese network, in unfamiliar regions and markets, there are acquaintances to lead the way, is a good start; second, make full use of China's technical resources, in the field of enterprise digital application software, we have a large number of excellent engineers, they have the Experience of digital technology research and development and application accumulated by the rapid development of China's economy and enterprises in the past few decades, as well as a strong spirit of innovation." Hu Yi concluded that combining the two has both a global vision and a wealth of technical resources, so that things can be done. When the market becomes bigger, there will be a further layout, such as Innocent in North America at the beginning of some product output, and then slowly invested in the construction of research and development teams, from one or two people to dozens of people now, the future may expand to hundreds of people, and China to form product complementarity, market demand has also been solved.
"Today, our globalization is standing on the shoulders of giants, thanks to China's vigorous development of various businesses, technologies and education over the years, we can only go out with so many resources." Hu Yi said.
Judging from the international situation, the current Sino-US relations have undoubtedly had a certain impact on the globalized business of Chinese enterprises. Wang Xiaosong believes that "if we see that unity is mutual benefit and fighting is common harm, the posture of the United States should change." In his view, many areas of the United States also rely on China's cooperation, and it is only a matter of time to solve the card neck technology, but if it loses its Chinese partner, it will be a great loss to the United States in any way.