Chinese firms increase market share

31 March 2009

BEIJING: Chinese companies have increased their overall market share from 3% to 23% in the last ten years, compared with an expansion from 25% to 31% among multinationals like Procter & Gamble, reports the country's National Bureau of Statistics.

While it has been suggested that Chinese firms may find it challenging to create international brands, many are seen as posing an increasing threat to multinational companies on the domestic level.

Coca-Cola also recently attempted to purchase the Huiyan Juice Group, a move which was rejected by the nation's government, which argued the takeover would restrict competition.

The NBS now reports that the annual growth rate of investment by Chinese firms in "fixed assets" has increased from 15% in 2001 to 36% in 2007, while multinationals saw a rise from 15% to 23% on this measure over the same period.

James Hexter, of McKinsey & Co. in Beijing, argues it "would be unwise to bet against the emergence of large Chinese companies with global brands."

He further suggests that the growing importance of the Chinese market on the international means that, increasingly, "companies have to win in the China market to succeed" overall.

One category where Chinese companies are expected to see particularly strong growth is the automotive sector, and a number of carmakers from the country are thought to be interested in buying Volvo, the Swedish marque, from Ford.

Zhong Shi, the associate editor of the China Automotive Review, says the Chinese auto market "might not be easy but foreign companies."

However, he predicted China will "be the leading market in the world over the next one or two years" while the American and European markets recover.

Data sourced from China Daily; additional content by WARC staff