From Emerging Players to Industry Leaders: The Chinese Roadmap

Since China opened its economy to global markets in 1978, experts cautioned about the rising competition from Chinese companies both domestically and internationally. Today, this forecast has materialized, with Chinese giants like BYD and China International Marine Containers (CIMC) capturing substantial shares in their global markets and challenging major Western competitors, thanks to their specialization in low-profitable segments for Western companies and economies of scale.

Ming Zeng and Peter J. Williamson, authors of the Harvard Business Review (HBR) Doing Business in China study “The Hidden Dragons”, noted short-sighted perspectives of Western companies regarding potential competition from Chinese companies, like Huawei, CIMC, and BYD, which at the time the book was released (2004) were growing steadily and penetrating global and Chinese markets strongly. CIMC, at the time, had captured over 40% of the global market of refrigerated containers. “If the speed with which these companies have penetrated foreign markets is any indication, Chinese brands could soon become a global force in many other industries,” reads the text. 

Chinese Companies’ Global Share 

Over 20 years ago, Chinese companies that successfully competed against global firms domestically launched a strategy targeting market segments that global players had vacated or neglected due to low margins. By leveraging their economies of scale and low-wage advantages, Chinese companies excelled in these areas.

According to HBR, by 2002, Huawei held over 2% of the global router market, while BYD Battery controlled 39% of the market for electric tool batteries, 72% for mobile phone batteries, and 38% for toy batteries. Meanwhile, CIMC dominated over 46% of the market for standard freight containers and 50% of the refrigerated container market.

By 2019, Huawei had expanded its presence in the global router market, becoming the leading provider in the carrier segment, according to a ranking by Omdia. “Ranked No. 1 in China and No. 2 globally, Huawei routers are the preferred choice for 70% of carriers and enterprise network Named Accounts (NAs),” reads the company website.  Additionally, Huawei held an 8.4% share of the global smartphone market in 4Q20, and in Mexico, the company captured an 8.6% market share during 3Q23. 

According to a China Knowledge 2022 report, CIMC accounted for over 44% market share in the manufacturing of containers globally in 2021, positioning itself as the world’s largest manufacturer of marine containers. However, the company also diversified its business to other segments like logistics services, land transport vehicles, energy, chemical, and food sectors, airport equipment, and offshore engineering. The company ranks among the global leaders in land transport and tank containerization for the chemicals segment, as well as being a top player in the energy storage and transportation industries. 

BYD, similarly, serves as a prominent case study of industry transformation, evolving from a leading battery manufacturer to one of the foremost electric vehicle (EV) producers, competing with prestigious brands such as US-based Tesla. In 2003, BYD held a significant market share in various products, serving as a primary Chinese supplier for major mobile companies like Motorola and Nokia, which were leaders in their respective segments at the time. That year, the company expanded into the automotive sector, aiming to integrate its battery technology with vehicles. By 2005, BYD launched its first electric vehicle.

By 2023, BYD became the world’s top-selling electric vehicle manufacturer, surpassing Tesla with over 3 million units sold. This achievement gave BYD a market share of approximately 22%, followed by Tesla and Volkswagen with 13.2% and 7.3%, respectively. In Mexico, the company announced its intention to open a manufacturing plant in Mexico, without disclosing the exact location at the time of writing. This plant is expected to initially produce 150,000 units annually, with capacity increasing to 400,000-500,000 units in later stages. The facility will primarily serve the Mexican market, as BYD currently has no plans to enter the US market, as reported by MBN.

Furthermore, BYD plans to expand its retail presence in Mexico, targeting 100,000 vehicle sales by 2025 and aiming to rank among the Top 10 automotive brands. Also, the company intends to increase its total points of sale to 50 by the end of 2024. 

China’s Leading Role in the Global Market

While the presented companies are only three examples, the influence of Chinese businesses extends far beyond these giants. Companies like Xiaomi are expanding from their dominance in smartphones and gadgets into the electric vehicle sector. Additionally, e-commerce powerhouses such as Shein, Alibaba, and Temu are reshaping online retail landscapes.

As nearshoring gains momentum in countries like Vietnam, Malaysia, Indonesia, and Mexico, Chinese and other international companies are increasingly positioning themselves closer to key markets. This trend underscores a broader strategy of global integration and market adaptation. Observing these developments will be crucial, as they highlight not only the evolving competitive landscape but also the strategic shifts that are defining the future of global trade and business dynamics.