Opinion | In China’s changing economy, MNCs must rethink the mantra of going big
- As the Chinese market matures, success will no longer hinge on thinking big and outpricing competitors
- Continuous innovation and the quality of business will be more important than having a brilliant founder or a top-selling product
Such growth has a peculiar ability to conceal challenges, mistakes and inefficiencies. For companies operating in China, the mantras during this period were “think big”, “copy and paste” and “winner takes all”. They were straightforward.
First, the sheer size of China’s market meant that businesses that set the biggest and boldest goals were often the ones that reaped the biggest rewards. The market, as well as investors, rewarded these trailblazers. There are many examples of companies who by the sheer might of capital and investment (and risk-taking) made it to the top of their industry.
Second, China’s ability to facilitate rapid scaling, owing to its vast number of cities and a relatively homogenous consumer base (with some regional differences, of course), encouraged businesses to replicate successful models across the nation. In fact, for some local companies, the ability to scale quickly across second- and third-tier cities was their most important weapon against more sophisticated foreign competition.
